U.S. vehicles' sales drop may bring rebates

By Tom Krisher

Published: February 2, 2008

DETROIT — U.S. vehicle sales slipped again last month as all major automakers reported declines except for General Motors Corp.

Overall U.S. sales dropped 4.3 percent in January compared with the same period last year, during a month that generally is the low point for the year.

Despite optimism that interest rate cuts and a possible economic stimulus package could turn things around later this year, automakers and industry analysts weren't expecting any near-term comeback.

"All the signs tell me that this economy is going to slow down further before things start to improve,” said Erich Merkle, vice president of auto industry forecasting for the consulting firm IRN Inc. in Grand Rapids.

Despite the slowing economy, GM, led by strong crossover vehicle sales, reported a January increase of 2.6 percent.

But Toyota Motor Corp., Ford Motor Co., Chrysler LLC, Nissan Motor Co., and Honda Motor Co. all saw their sales drop.

The overall decline means automakers likely will raise rebates and zero percent financing soon to stimulate demand, said Jesse Toprak, executive director for industry analysis at the auto information site Edmunds.com.

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