Auto Industry Braces For Weak Sales Report

The auto industry is preparing to report another month of rapidly slowing sales - possibly the worst in decades - as the same toxic combination of the credit crunch and the careening economy continue to keep consumers away from dealerships.

"When your home prices are going down and your retirement savings are going down and the outlook for jobs ... is becoming more problematic, you're probably not in the mood to pull the trigger on a big-ticket purchase, even if you can get credit," said George Pipas, the top sales analyst at Ford Motor Co.

Auto makers are set to report October U.S. sales on Monday. The automotive Web site Edmunds.com is projecting new vehicle sales plunged 29 percent from a year ago, to 872,000. That's the lowest figure since January 1992, Edmunds auto analyst Jessica Caldwell said.

Some analysts say it is possible Japan's Toyota Motor Corp. will pass General Motors Corp. as U.S. sales leader for the first time in history.

After reeling from a 32 percent drop in September sales, Toyota launched zero-percent financing on almost all models, and it could post decent sales as a result. Meanwhile, General Motors Corp.'s financing arm, GMAC, said it was tightening its lending standards to require a credit score of at least 700, potentially shutting out some buyers.

Furthermore, many people took advantage of GM's employee pricing offer that recently ended. The deal was credited with buoying August and September's results but likely stole sales from October, said Tom Libby, senior director for industry analysis at J.D. Power and Associates' Power Information Network.

"For GM this is going to be a difficult month," Libby said.

J.D. Power is predicting a seasonally adjusted annual sales rate in October of between 11 million and 11.5 million, down from 16.1 million a year ago. The figure indicates what sales would be if they remained at their current rate all year, with adjustments for seasonal fluctuations.

Globally, Toyota and GM have been running neck and neck to be top vehicle seller, but the closest Toyota came to beating GM in the United States was in May, when Toyota sold 257,404 vehicles to GM's 268,990, according to Ward's AutoInfoBank.

In another sign that Asian auto makers have not been immune to the slowdown, Nissan Motor Co. said Friday it will offer zero-percent financing on five of its top-selling vehicles through January. Nissan and other Asian auto makers have fared better than their U.S. counterparts, but Nissan's sales still fell 37 percent in September.

The recent relief from this summer's record-high gasoline prices is unlikely to prove much of a salve for auto makers. The national average price for regular unleaded was $2.50 per gallon Friday, according to the auto club AAA, the Oil Price Information Service and Wright Express. That's down 39 percent from the all-time high of $4.11 in July.