US car sales plunge

March 4th, 2009 - 4:29 am ICT by IANS  

Washington, March 4 (DPA) The ailing US car industry, some of which has been propped up by emergency government loans, Tuesday reported steep declines in sales for February compared to the year-earlier period.
General Motors Corp, the largest US carmaker, said its February sales dropped 53 percent amid the widening recession, to the lowest level in more than three decades.

Ford Motor Co, which unlike GM and Chrysler LLC has not sought federal aid, reported a 48-percent decline in February sales, compared to a year ago.

Both GM and Ford announced they would be cutting production in North America. While GM’s production will be down 34 percent from a year earlier, Ford is to slash second-quarter production by 38 per cent.

Sales reports from Chrysler, which rounds out the Detroit “Big Three,” were expected later Tuesday.

US sales also tumbled 40 percent for Toyota Motor Corp, which overtook GM last year as the world’s largest carmaker. The news was equally dismal for Honda Motor Co, down 38 percent, and Nissan Motor Co, which reported a 37-percent February sales slump.

GM tried to remain positive even as consumer confidence has fallen. “It remains a tough and challenging market, but seeing some upticks in volume and showroom traffic compared with last month is encouraging,” said Mark LaNeve, vice president of GM North America vehicle sales, service and marketing.

The reports weren’t unexpected and come after GM Thursday said it suffered a $30.9-billion loss in 2008, the second-biggest in its 100-year history.

The final year tally came after fourth-quarter losses of $9.6 billion, a figure that underscores the dire situation the company finds itself in as it battles for survival.

GM and Chrysler have already received $17.4 billion in emergency government loans. The two US industrial icons have said they would need nearly $10 billion in additional federal aid over the coming months to weather the ongoing recession and the worst industrywide downturn in a quarter century.

GM said it could need as much as $16.6 billion by 2011 if the economy continues deteriorating.

GM and Chrysler face a government deadline of March 31 to submit proof that they can survive the economic crisis. If not, they will have to pay back the borrowed money to the government and will get no more federal loans.

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