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I realize it goes without saying, but times are tough for American auto makers, really tough in fact, and for Ford (NYSE: F), the company does not see things changing any time soon, and is predicting another disastrous month for December sales for the ailing auto industry.The company announced today that it believes when final December sales figures are released, we are going to see a horrible month, with Ford estimating that industry-wide, December sales will probably be around 35% lower than the same period last year.
When you consider the estimated December numbers you can start to get a feel for just how bad 2008 has been. Consider this: in 2007, industry-wide sales of light vehicles in America totaled 16.2 million. In 2008, that number is expected to drop dramatically down to around 13.2 million light vehicles in reaction to lower consumer spending and tightened credit lending.
The last time that the industry has seen a 3 million drop in auto sales was all the back in 1974, the year after the 1973 oil embargo in which Arab countries in OPEC, in addition to Egypt and Syria, declared they would no longer ship oil to America for its role in helping supply Israel during the Yom Kippur War.
Perhaps you are hoping that industry insiders are at least a little bit optimistic about the fate of the auto industry as we embark on 2009? Well, don't get too far ahead of yourself. According to Ford, the hard times are not ready to come to an end just yet. Ford believes that at least through the first quarter of 2009 things are going to continue to remain as they are now... in other words... not good.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
1-03-2009 @ 4:26PM
JAY BREWER said...
I AM NOT SURE WHO HAS THE WORST SALESMEN, FORD OR DODGE.
YOU WOULD THINK IT WAS A SELLERS MARKET, BUT I GUESS IF THE DON'T MAKE A KILLING WHY BOTHER.
IN VEGAS, ONLY (2) DEALERS REALLY, FORD AND THEY ARE JUST PLAIN RUDE.
DODGE, THEY ARE WORSE SO I SAY LET THEM GO DOWN. IF WE CAN MAKE ANY MONEY NO ONE SAVE US. WHERE IS THE MONEY FOR THE WORKER'S?
1-03-2009 @ 4:50PM
car lady said...
I agree. We won't see anyone rushing to buy cars for quite awhile. Many have to see at least a 20% repair of their stock market portfolio before they even consider a new car. For more on the car credit crisis and what's hot in car stuff visit: www.everythingcars.wordpress.com
1-03-2009 @ 4:44PM
ted said...
given the bad numbers i think we will be in a mess that will be very hard to fathom how to get out of.
accountablity and transparency should be in the forefront of this administration otherwise the markets will suffer!!
1-04-2009 @ 1:06AM
C said...
Be nice to have some actual quotes versus your commentary. I don't care how long you've worked as analyst - I'd say your bashing Ford, even after all else has been priced in.
1-04-2009 @ 8:55PM
Scott Monty said...
If Wall Street could focus on more than one quarter at a time, it would be clear that Ford is expecting 2009 to end much better, with lots of great activity going into 2010. This is based on a number of things, including product lineup, the arrival of European-platform cars in the U.S., the wide distribution across the fleet of fuel-saving technology (like the EcoBoost engine and 6-speed transmissions), and a more balanced product portfolio (60% cars/crossovers vs. 70% trucks/SUVs as in 2006).
I'd respectfully suggest a little broader view of the industry in general and Ford specifically before selling the company down the river.
Scott Monty
Global Digital Communications
Ford Motor Company