• by Karl Greenberg , February 3, 2009

Tuesday's grim auto sales numbers for January were punctuated by Chrysler LLC's dour prediction that this year's auto sales could fall under 10 million units--something that has not happened since around 1983. Indeed, January was the probably the worst sales month in over two decades, with every automaker reporting massive sales losses.

General Motors has launched a "Special Attrition Program" to reduce its rolls of hourly employees. The effort, starting Feb. 6, aims to accelerate retirement for those 22,000 employees who are eligible by offering a vehicle voucher and a one-time cash payment.

Chrysler sold 62,157 new cars and trucks in January, a 55% decline versus the same month in 2008 when it sold 137,392 vehicles. January's sales also constitute a 31% drop from December. January numbers represent a huge 81% drop in sales to rental fleets. Dealer sales were off 35%, it said--adding that the issue is not demand, but credit opportunities for consumers.

Jim Press, president and vice chairman, said that some of the poor sales at retail reflected consumers' inability to secure credit and Chrysler's ability to offer its recently launched Zero Plus Plus incentive push.

He said that while Chrysler received $4 billion of the total $7 billion bridge loan from the U.S. Treasury last month, it wasn't until later in the month that Chrysler Financial received its $1.5 billion loan, "greatly enhancing its ability to support our dealers and provide credit to our customers. We were very encouraged, and working closely with Chrysler Financial, were immediately able to introduce our zero percent financing for customers," he said.

Press argued in a release that the government loans to Chrysler and GM must not be tethered to strict lending rules. "While the government has made funds available to stimulate the market, these funds carry limitations, including stringent lending guidelines and conduit restrictions," he said.

"At the same time, many financial lenders are also operating with tighter standards and significantly increased reserves to hold their credit rating. All these factors have limited the amount of funds that the financial institutions can make available to consumers for the purchase of Chrysler vehicles, making it more difficult for us to close sales," he said.

Ford, meanwhile, said it sold 90,596 new cars and trucks in January-- down 39% from the month last year. But Ford said January was also its fourth consecutive month of retail market-share gains driven by the 2009 F-150 pickup truck and the Fusion sedan. Ford says its January retail market was 12.7%, up 0.3 points versus a year ago. Ford said that, like Chrysler, the numbers partly reflect an 80% cut in fleet sales--and that retail sales were off 38%, about even with December.

General Motors reported sales down 49% to 129,227 new cars and trucks. Mark LaNeve, VP/GM North America vehicle sales, service and marketing, said the company's retail market share is something over 21% for the second month. He said GMAC will offer a Presidents Day Sale with reduced-rate APR financing and that GM is offering bonus cash on select models.

Edmunds.com estimated that Ford spent on average about $3,574 per vehicle last month on incentives. The firm says average automotive manufacturer incentive in the U.S. was $2,714 per vehicle sold last month--down 5.2% from astronomic levels in December, but up $301, or 12.5%, from January 2008.

Toyota reported January sales of 117,287 vehicles, a decrease of 34.4% from last January. Toyota division car and truck sales were down 34.9% from last January. The Lexus Division reported a 30.3% drop from the year-ago month. Honda Motor posted a 30.7% decline with Honda division down 30.5%, and Acura down 32.4%.

But even luxury brands saw sales declines greater than they have ever experienced. Mercedes-Benz reported sales of 10,433 vehicles--a 42.9% decrease compared to January 2008, excluding the Smart brand.

Porsche Cars North America, Inc. said its January sales in the U.S. of 1,658 units constituted a 36% decline versus January 2008.