DETROIT/LONDON (Reuters) - The auto industry was hammered again on Tuesday as U.S. monthly sales plunged nearly 37 percent to the lowest level since 1982 and the slump spread to Europe and Asia, forcing automakers to slash production.
U.S. auto sales fell for the 13th consecutive month in November, led by a 47 percent sales drop at Chrysler and a 41 percent decline at General Motors Corp, and major automakers said there was no sign that demand would rebound in the next six months in the world's largest vehicle market.
Industrywide auto sales in November were down nearly 37 percent to a seasonally adjusted annual sales rate of around 10.2 million, the lowest in 26 years, according to preliminary results released by the automakers on Tuesday.
Industry-wide U.S. sales of cars and light trucks dropped to 746,789 in November after falling below the 1 million threshold in September for the first time in 15 years. It marked the thirteenth consecutive monthly sales decline.
In annualized terms tracked by analysts, the auto industry recorded a U.S. sales rate of just under 10.2 million vehicles in November, down from 16.07 million a year earlier, according to Autodata Corp.
On a population-adjusted basis, though, the results were the worst in a half century for the U.S. auto industry.
Meanwhile, the three U.S.-based carmakers readied restructuring plans for the U.S. Congress, which is reviewing their request for emergency funding to survive the brutal downturn.
All major automakers reported double-digit declines for U.S. auto sales in November, hurt by a plunge in consumer confidence brought on by the turmoil in the financial markets and weakening U.S. economy.
Vehicle sales in November also tumbled in Europe, Asia and Africa, forcing production cuts across the globe.
New car registrations in Germany, Europe's largest car market, dropped 17.6 percent in November from a year ago, the VDIK association of foreign carmakers said on Tuesday, adding to a string of similar news across the continent on Monday.
As the global financial crisis makes consumers increasingly reluctant to part with cash and lenders unwilling to offer credit, carmakers across the world have struggled to find buyers to keep their production lines running.
U.S. sales for Toyota Motor Co dropped 34 percent, Honda Motor Co fell 32 percent, Ford Motor Co was off 31 percent, Nissan Motor Co tumbled 42.2 percent and Chrysler LLC sales fell 47 percent.
GM and Ford set first-quarter North American production targets lower by 32 percent and 38 percent, respectively.
"Consumers are under more and more pressure," said Jim Farley, Ford's marketing chief. "We could see some strength in the second half of next year or at least stabilization, albeit at a much lower level."
GM sales and marketing chief Mark LaNeve said the bad news surrounding the cash squeeze the company was facing was affecting sales of GM vehicles.
"Am I going to do an ad campaign that says we're not going to go bankrupt? No, I'm not going to do that ad campaign," LaNeve said. "I certainly don't want to use bankruptcy as a foundation for my marketing campaign."
Toyota also said earlier it is cutting production and slashing management bonuses by 10 percent in response to the slump in sales in the United States, Europe and even developing markets such as China. which carmakers had hoped would fuel near-term growth.
"Consumers were simply not shopping," said Bob Carter, Toyota division US general manager.
Toyota is halting production at assembly lines in two factories in Japan for two days later this month, cutting production primarily of its premium Lexus brand, which has seen a 24 percent drop in sales so far this year in Japan and sharp falls in the U.S., its main market.
Tata said it was suspending production at its commercial vehicle plant in Pune for three days from December 5, while local rival Mahindra & Mahindra , India's top maker of utility vehicles and tractors, said its November sales slumped 39 percent.
Sweden's Volvo, the world's number two truck maker, said its order intake had dropped substantially in several markets, and it would make cuts in production mostly in December to adapt to the fall.
EMERGENCY FUNDING KEY
The sharp drop in demand across the globe and especially in the United States reflected the grim state of U.S. automakers, who are seeking $25 billion in emergency U.S. funding.
Ford, considered to be in the strongest financial position of the three Detroit automakers, submitted a restructuring plan to Congress in support of its application for a government credit line of up to $9 billion.
GM requested $18 billion in loans and credit line from the U.S. government to save it from failure, and laid out a restructuring plan that includes consideration of dropping or selling off the Pontiac, Saab and Saturn brands. The company also plans to reopen talks with the United Auto Workers union.
Chrysler is requesting a $7 billion bridge loan by the end of 2008 and said a prepackaged bankruptcy would not be plausible for the automaker.
Chrysler President Jim Press said on Tuesday that the automaker's plan would include cost-cutting and givebacks from all stakeholders, including suppliers and labor. He declined to reveal details.
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