U.S. vehicle sales tumble

Vehicle sales in the United States tumbled to multi-decade lows in October as tightened credit markets and an economic slowdown kept consumers away from dealerships.

The General Motors Corporation reported a 45 percent decline in sales on Monday, and the Ford Motor Company said it sold 30.2 percent fewer cars and trucks.

Toyota Motor said its sales were 25.9 percent lower, despite offering no-interest financing and large discounts on many models. Light truck sales fell 34 percent and autos fell 15 percent.

"If you adjust for population growth, this is probably the worst industry sales month in the post-World War II era," Mark LaNeve, GM's vice president for sales in North America, said in a statement. "We believe there is considerable pent-up demand from the last three years, but until the credit markets open up and consumer confidence improves, the entire U.S. economy, and any industry like autos that relies on financing, will suffer."

GM said it would begin its year-end "red tag" sale on Tuesday, a month sooner than usual, while Ford indicated that it planned to cut production of cars and crossover vehicles after its sales in those segments fell 27.1 percent and 37.1 percent.

Ford and other manufacturers rushed to increase car and crossover production earlier this year as truck sales plummeted but now find inventories of those vehicles growing as the entire market declines.

Sales were down 31 percent at Hyundai and 25 percent at Mercedes. Volkswagen, which introduced several new models in October, reported a 7.9 percent decline.

Other automakers are scheduled to release sales results later Monday. Analysts estimated that total industry sales fell more than 30 percent compared with October a year ago, to a seasonally adjusted annual rate of about 11 million vehicles.

"The all-time low level of consumer confidence in October was reflected in particularly poor showroom traffic," Brian Johnson, an analyst with Barclays Capital, wrote in a report to clients.

GM and Chrysler, which are involved in merger discussions as they rapidly deplete their cash reserves, were expected to fare the worst in October. New restrictions by the two company's respective lending arms, the General Motors Acceptance Corporation and Chrysler Financial, have significantly hindered sales. GMAC now offers financing only to consumers with credit scores of at least 700, which excludes 42 percent of Americans, and Chrysler Financial no longer offers leases.

Automakers have had difficulty attracting customers for much of the year, but September and October were particularly challenging given the chaos in the financial markets. Fewer than one million vehicles were sold in September, the first time that happened since February 1993.

Sales have continued to fall even as gasoline prices fall sharply, to less than $2 a gallon in some states. Sales of profitable trucks and SUV's have rebounded to become about 14 percent of the market in October, up from 8.6 percent in May when gasoline was selling for about $4 a gallon.

But small cars remain popular, as consumers look for vehicles that not only are more efficient but cost less up front.

"'Gas prices is not the be-all, end-all explanation that predicts what people are going to buy," Ford's chief sales analyst, George Pipas, said. "Some people who really need or really want a truck are back into the market now because they were just sitting on the sidelines."

Over all, Pipas described October as "similar to what we've seen after a natural disaster," with consumers putting off major purchases until the economy settles down.