Vehicle sales plunged close to recessionary levels in the U.S. market last month as waning consumer confidence, the housing slump and high gas prices put the brakes on deliveries.
"I would like to be able to tell you that the worst is behind us, but I really can't give you that assurance," said Jim Farley, Ford Motor Co.'s group vice-president of marketing and communications, as U.S. sales fell to a seasonally adjusted annual rate of about 15.5 million vehicles.
Canadians on the other hand, bought just a fraction fewer vehicles in March than they did a year earlier, marking the third straight month that sales diverged in the two countries.
In the U.S. market, sales fell by double digits for Chrysler LLC, Ford, General Motors Corp. and Toyota Motor Corp. Toyota has in past months been able to eke out small gains or slide by with minimal declines.
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Sales also fell for Honda Motor Co. Ltd., although by just 3 per cent.
One key trend was a jump in sales of small cars such as the Ford Focus, Honda Fit and Toyota Yaris, which posted its best sales month yet in the U.S. market.
Those increases, however, were not strong enough to offset declines in full-size pickup trucks and large sport utility vehicles - another example of how the housing crisis and gas prices are rippling through the auto sector.
U.S. sales are "pretty close to hitting the low end of a normal automotive cycle," said Bob Schnorbus, chief economist for consulting firm J.D. Power and Associates. "It's not pleasant, any way you look at it."
Despite the slide, GM stuck to its forecast that sales will improve in the second half of the year.
"There's no question that the industry and the economy is in a weakened state," said Mike DiGiovanni, GM's executive director of global markets and industry analysis. But GM forecast last November that first-quarter sales would slump to a seasonally adjusted annual rate of 15.3 million so the actual total of 15.5 million exceeds the auto maker's forecast, Mr. DiGiovanni told analysts and reporters on a conference call yesterday.
The U.S. slump is actually spilling over into Canada in a positive way by making more vehicles available for the Canadian units of the world's auto makers, noted industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ont.
"The Canadian guys are being hounded by their offices to take more product - given the past two months," Mr. DesRosiers said, referring to double-digit increases in Canadian sales in January and February.
General Motors of Canada Ltd. posted the biggest decline among the major companies in Canada. Sales slid 16 per cent.
Chrysler Canada Inc., No. 2 in the Canadian market, notched a 3-per-cent gain while sales dipped 1 per cent for Ford Motor Co. of Canada Ltd.
That combination pushed market share for the Detroit Three to just 47.7 per cent, believed to be their lowest share yet in any month in the Canadian market.
Mazda Canada Inc. and Toyota Canada Inc. racked up their best March sales on record.
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By the numbers
Big vehicles took it on the chin in March auto sales in the U.S., while small was beautiful
+29%
GM: Pontiac Vibe
+83%
Toyota: Yaris
+74%
Honda: Fit
-54%
GM: Chevrolet TrailBlazer
-42%
Toyota: FJ Cruiser
-38%
Chrysler: Durango
33