Stop me if you think you’ve heard this one before.
GM’s auto sales last month were down 17% from the previous year, while Ford’s fell 19%. The latter was enough to move the used-to-be-number-two automaker into fourth place for the U.S. market in January. Toyota, on the other hand, was up 10% and Nissan up 9%.
Things are perhaps not quite as bleak as these year-over-year comparisons might lead one to believe, since last January the automakers were enjoying a temporary rebound from the fall 2005 debacle. January 2007 domestic car sales were down only modestly from January 2005 or January 2004 levels. Domestic light truck sales, which did not enjoy the January 2006 bump, show a more measured inexorable decline over the four consecutive Januarys:
Although the January data don’t represent the kind of precipitous cyclical decline that the initial sales figures might lead one to infer, they still could spell trouble for the economy over the next few quarters, not to mention the long-run implications of the unmistakable trend away from domestic manufacturers. Both GM and Chrysler are planning significant production cuts during the current quarter. That’s not exactly a welcome development in an economy already testing the theory that America is diverse enough to keep growing through a major downturn in housing, and raises the possibility of a regional recession in the Midwest. Yes, I know the fourth-quarter GDP growth looked strong. But I’m not convinced that the big boost that came from net exports in 2006:Q4 is going to be repeated, while I do expect the bad numbers for residential fixed investment to continue.
Maybe something’s wrong with me, when even 3.5% GDP growth is not enough to stop me from worrying.