Automakers See Sales Drop

The end of the federal government’s Cash for Clunkers program marked the end of the temporary good times for automakers.

Sales in September plunged 23 percent, with General Motors and Chrysler hit the hardest and Ford doing a little better than expected, but still selling fewer cars than it did last September.

Automakers sold 745,997 vehicles in September, compared with 964,783 in 2008.

GM sales fell 45 percent to 155,679 cars and light trucks, while Chrysler sales slumped 42 percent to 62,197.

The Wall Street Journal reports both automakers were hurt by lack of inventory, thanks to their bankruptcy proceedings and temporary factory shutdowns earlier in the year.

"I don't think customers, when they drive by a dealership and see there's nothing there, feel very motivated to come in," said Steve Cook, a GM dealer in Vassar, Michigan.

Ford, though its sales fell in September as well, gained more than 2 points of market share, the 11th time in 12 quarters the only U.S. automaker not to take bailout money has gained market share. Still, Ford, Lincoln, and Mercury sales dropped 5.8 percent to 109,939 units. Volvo saw an unexpected gain of 16 percent to 4,716. For the entire third quarter, Ford sales actually rose 5 percent, the first quarterly increase in four years.

Big foreign automakers also fared poorly in September, with Honda sales dropping 20 percent to 77,229 vehicles, and Toyota falling 13 percent to 126,015 vehicles.

The sales drops were expected. The Cash for Clunkers program had in July and August driven buyers to the lots to trade in old gas-guzzlers on new cars for cash rebates up to $4,500. The program drove sales of nearly 700,000 cars in July and August.

What this month shows is a truer picture of the auto market than during the clunker mania of the previous two months. And while it’s not a pretty picture, it at least shows the market stabilizing.

“Where we are at now is pretty much where we were before Clunkers,” Jesse Toprak, the vice president of industry trends and insights at True Car.com, a website that tracks automotive sales and pricing, told the New York Times. “We hit the bottom—now we can safely say because it’s been a while—back in February. But now we’re struggling to jump-start the industry.”