Economic uncertainties kept U.S. buyers away from car lots in the first quarter as U.S. sales last month plummeted 12 percent for both domestics and imports from a year ago, posting the worst Q1 sales in years.

“It was not an easy month,” Mark LaNeve, General Motors Corp.’s vice president of North American vehicle sales, service and marketing, said of March 2008′s auto sales. There were “lots of red numbers all over the place,” he told Mlive.com.

That’s understated.

U.S. sales for each of the four largest automakers in the United States fell last month: GM’s sales tumbled 19 percent, when analysts had only expected a 12 percent drop; Ford Motor Co.’s U.S. sales fell 14 percent; and Toyota Motor Corp and Honda Motor Co. saw their sales slip 10.3 percent and 3.2 percent, respectively.

In the end, Americans bought just 1.35 million new vehicles last month, a decline of 12 percent from a year ago. That translated into an annual selling rate of 15.1 million cars and trucks — an “extremely soft kickoff for the spring selling season” that has left some wondering whether the economy had yet to hit bottom or was still getting worse, according to the Detroit Free Press.

Sales by the three Detroit companies are down 10.4 percent so far this year. Their combined market share in March was 48.4 percent, nearly a record low. Ford’s sales were off 7.6 percent last month, and GM and Chrysler both reported declines of about 13 percent.

Yet even Japanese automakers — with smaller, fuel-efficient fleets — aren’t completely immune to the slide. Although Nissan sales rose 3.6 percent and Honda showed a 4.2 percent gain — the largest automakers to report increases — Toyota’s sales fell 3.4 percent from a year ago, though its market share rose slightly, to 16 percent.

All the automakers reporting their sales numbers said truck and sport utility vehicles (SUV) sales were off more than car sales. The obvious culprit: gas prices. As SUVs and pickups make up a bigger percentage of sales — and definitely of profits — for the Used-to-Be-Big Three than for Toyota or Honda, this news is indeed less than encouraging.

“The Detroit automakers will have even more difficulty keeping sales anywhere close to the numbers of last year because their lineups include more of the pickup trucks and sport utility vehicles that have experienced sizable drops in demand,” the International Herald Tribune notes.

Over all, passenger cars outsold light trucks in March for the first time since May 2002, according to Autodata.

Consumer confidence also took a heavy toll on the auto industry, and the latest reading from The Conference Board shows that U.S. consumer confidence slid to a five-year low in March while a measure of expectations for the future hit the weakest level in 35 years amid a horrific housing slump that has led to massive bank losses.

As disappointing as the first quarter’s figures were, there may be more pain in store for automakers as the economy and consumer sentiment continue to deteriorate. Research firm Global Insight Inc. projects U.S. sales will bottom out in the second quarter, at a seasonally adjusted annual rate of 14.8 million vehicles sold. The rate was 15.22 million in March, down from 16.29 million a year earlier.

“We definitely have the second quarter the worst,” Rebecca Lindland, an analyst at Global Insight, told the International Herald Tribune. “All of this year is going to be a challenge. Until the credit crunch eases and until consumers feel better about themselves, I just don’t see a recovery.”

“I’d like to be able to tell you that the worst is behind us, but I really can’t give you that assurance,” Jim Farley, Ford’s group vice president of marketing and communications, said in a conference call yesterday. “At this point, our sense is that the next quarter, the second quarter of the year, may be our most difficult of the year.”

GM and Toyota, however, have said they are optimistic about the benefits of declining interest rates and tax rebate checks that most Americans will get starting in May as part of the federal economic stimulus package.

References

March Tough on Auto Sales
by Rick Haglund
Mlive.com, April 2, 2008

Wary Shoppers’ Confidence, Car Sales Take Dive
by Sarah A. Webster
Detroit Free Press, April 2, 2008

U.S. Auto Sales Fall, But GM and Toyota Are Optimistic
by Nick Bunkley
International Herald Tribune, April 2, 2008

Consumer Confidence Index Declines Almost 12 Points
The Conference Board, March 25, 2008