US Passenger Car Sales fall 27% in September

The US auto industry has sustained considerable sales haemorrhaging in September, with figures plumbing 15-year depths, while US Department of Transportation year-on-year figures reveal that driving miles by Americans continued to fall in July 2008. In addition the harbingers of doom were prevalent among top car manufacturers: BMW, Ford and Renault all agree that the slump could be the beginning of a more sustained slump than previously predicted.

Financial news sources site comments from Norbert Reithofer, Alan Mulally and Carlos Ghosn – the CEOs of the three aforementioned giants – suggesting that predictions of a swift recovery may have to be put on hold. Ghosn told journalists at the Paris Auto Show, “We don’t know if we’re at the beginning of the end or the end of the beginning,” turning down requests to reiterate earnings targets.

The 27 per cent drop appears to be a result of the current crises in credit and raw materials costs, tied up as the industry is with economic development. As such, Ford’s Mulally is calling for the implementation of the fiscal rescue package and stabilisation of the US economy. With even the developing markets slackening in Russia, Eastern Europe and Brazil, it seems the immediate future looks bleak for car makers, regardless.

However, news reports are providing some cause for optimism: Fiat and Peugeot Citroen were able to reaffirm their targets up to 2010, the latter thanks to an 18-month series of cost-cutting measures, saving 2 billion euros. CEO Christian Streiff told sources that Peugeot was on its way to meeting its 5.5 per cent operating margin target, alongside a reduction of 30 per cent in overheads in 2010.

Driving miles in freefall

Meanwhile, figures released by the Department of Transportation revealed a further worrying statistic for car-makers: in July 2008, compared with the month in 2007, American road-users drove 3.6 per cent fewer miles (measuring 9.6 billion in total for July ‘08). This is a particularly pertinent fact, as the month contains the peak for the US vacation season.

Additionally, the DoT stated that between November 2007 and July 2008, driving miles have fallen by 62.6 billion miles in comparison with the same nine-month period in ’06-’07.