Car, truck sales worst ‘in our lifetime’

The number of new cars and trucks sold in Southern Nevada nose-dived 54 percent in December from the same month a year ago as dealers struggled to stay in business, a local dealer said Monday.

"We've never seen it this way in our lifetime," said Jim Marsh, owner of the similarly named Chrysler Jeep dealership. "Even the used car market has gone soft."

Marsh, who has been selling cars in Las Vegas since 1971, said Clark County dealers are "one of the hardest hit" in the country in terms of car sales and the economy generally.

"Fortunately, I'm still marginally profitable," Marsh said. "A lot of them are not."

Bill Heard's two dealerships in the valley and others around the country filed for bankruptcy court protection and ceased operations late last year.

Huge rebates and zero-percent loans couldn't overcome economic uncertainty as U.S. auto sales plunged 36 percent in December, capping a dismal year that saw sales free-fall by 2.9 million vehicles from 2007.

Hyundai Motor America is trying to woo skittish buyers by promising to let them return cars for up to a year if they lose their income.

Similar bold moves might be necessary this year.

The bleak numbers, according to both industry officials and analysts, mean that record high rebates and low-interest financing will stick around until at least February. Those deals probably will disappear as the remaining 2008 models are sold and inventories are lowered to match demand.

Marsh said he is curtailing car sales promotions except for contacting former customers and some direct mail advertising.

"It seems like the market is down so far it's kind of like trying to prime a dry (well)," Marsh said. "We're kind of keeping our powder dry."

His competitors appear to be doing the same, he said, noting declines of 50 percent to possibly 70 percent in print and broadcast advertising for cars.

Rather than advertise new car sales, Marsh's dealership emphasizes parts, service and body repair.

"They tend to be holding up pretty well," he said.

Justin Findlay of Findlay Chevrolet said "sales definitely were down in December" but said he couldn't speak for every dealer.

The General Motors dealer was pleased not only that the automaker got federal money in December, but that GMAC became a bank and resumed making new car loans.

Findlay is offering zero-percent interest financing for five years on new 2008 TrailBlazer sports utility vehicles with other 2008 new cars being offered with 1.9 percent to 3.9 percent financing. The lowest financing available for 2009 products is 2.9 percent for five years for a Chevy Cobalt.

GMAC also relaxed credit standards for those loans to 620 from a minimum of 700 FICO score.

Marsh, however, said he has a tough time helping buyers get used car financing. A customer who bought a used Jeep Wrangler would have qualified for an 8 percent loan six months ago but recently needed to pay about twice as much interest to finance a purchase.

Even with the incentives, consumers are reluctant to buy cars, Findlay said. Some are worry about their job, making payments on home mortgage loans or high credit card debt, he said.

"Some people are just taking a wait-and-see attitude," Findlay said.

In Clark County, taxable sales for motor vehicle and parts dealers dropped 33.5 percent in October from a year ago, the last month for which figures are available from the Nevada Department of Taxation.

Nationally, every major manufacturer reported drops of more than 30 percent in December. Leading the largest year-over-year drop since the Arab oil embargo days of 1973-74 was struggling Chrysler LLC, which sold 53 percent fewer vehicles.

General Motors Corp. sold 2.9 million vehicles last year, the lowest number in 49 years.

U.S. auto sales tumbled to 13.2 million in 2008, down 18 percent from 16.1 million in 2007. Consulting firm IHS Global Insight predicts that U.S. sales will drop to 10.3 million this year as the economy continues to sputter.

Automakers were reluctant to predict when a recovery might occur. Most were pessimistic about the first quarter. After that, some hoped President-elect Barack Obama's stimulus package would kick in, coupled with a loosening of credit that could bring people back to the showrooms.

"I do think January is going to be a little bit better than December, and I do expect spring to be even better," Findlay said.

Marsh said he will get more optimistic when consumers get more optimistic. He pointed to the Conference Board's Consumer Confidence Index, which hit an all time low of 38 in December compared to 100 in 1985.

The Associated Press contributed to this report.