DETROIT — Ford’s U.S. sales fell 48% in February, a sign the new car market could hit the lowest point in more than 27 years as huge rebates and low-interest financing fail to spur fearful consumers to make a major purchase.

Ford (F), the first automaker to report sales Tuesday, said it sold 99,060 vehicles last month, vs. 192,248 in February 2008.

The drop is another indication that economy-wide layoffs, the stock market decline and sliding home values are prompting people to hold on to their cars longer. Those who are buying are more often opting for a used car or truck.

It also casts further doubt on the financial viability of General Motors (GM) and Chrysler, making it difficult for them to sell cars and generate cash to supplement the $17.4 billion in government loans that are keeping them in business.

Industry analysts say when all the numbers are tallied, February sales could be worse than January’s total of 656,976 light vehicles. That was the lowest monthly total since the industry sold 656,310 in December 1981, according to Autodata and Ward’s AutoInfoBank.

The trough is likely even though automakers spent more on rebates, low-interest financing and other incentives to try to bring out buyers. But despite the deals, sales continued to slump.

“If it wasn’t for the generous level of incentives now, we probably would be seeing even lower sales, if you can believe it,” said Jesse Toprak, executive director of industry analysis for the auto website Edmunds.com. “It seems it can’t get lower, but it could.”

Toprak says there is little automakers can do to spur sales, which are likely to drop for every major automaker.

“You can spend money on marketing or incentives. That’s all you can do,” he said. “Neither is having a big impact on sales. That tells us it’s really consumer confidence and the general negative state of the economy overall causing consumers to postpone making purchase decisions.”

SOURCE: USATODAY

As President Barack Obama rides about Washington in his new custom-made Cadillac, he should remember that the men and women who furnished his stylish ride need to hear from him, and soon.

The domestic auto industry’s outlook is brightened only modestly by Chrysler’s announced partnering with Italian automaker Fiat. It’s a reasonable move for Chrysler, offering an opportunity to diminish the company’s historical reliance on minivans and Jeeps. Fiat’s strength in small cars and high-end nameplates will bring balance in exchange for a 35% stake in Chrysler.

But Fiat’s reluctance to invest the first euro of its own money in Chrysler is telling. So is the unhappy history of Fiat’s short-lived partnership with GM, which began with a similar vision of geographic and segment synergy.

Chrysler’s desperate need for cash persists, and some doomsayers suggest its alliance with Fiat could even exacerbate that predicament by triggering a repayment provision in the terms of its emergency loan from Uncle Sam. In any event, the Fiat partnership does nothing to address Chrysler’s immediate problems.

Equally ominous is UAW President Ron Gettelfinger’s warning that it will be “almost impossible” for the Big Three to meet the Feb. 17 deadline the Bush administration ordained for the delivery of detailed restructuring plans. The new administration shouldn’t wait three weeks to find out if this is more than hyperbole.

Appointing a car czar with broad, proactive authority should be a priority on par with tackling the foreclosure crisis. It’s also consistent with the new president’s commitment to fiscal transparency and more energy-efficient automobiles.

In his inaugural address, Obama warned that “our time of putting off unpleasant decisions … has surely passed.” That is doubly true in the auto industry, and the new administration should seize the initiative now.

SOURCE: Freep.com

Nissan Motor Co., paring production as sales slump, will keep its U.S. auto-assembly plants on a four-day workweek for the foreseeable future in a step that means less pay for factory employees.

A reduced schedule that began in late 2008 will continue “indefinitely,” spokesman Steve Parrett said today. Hourly workers in Smyrna, Tennessee, and Canton, Mississippi, are being paid only when on duty, not their usual five-day week, he said.

The lack of a timetable to resume normal production shows the strain on Tokyo-based Nissan after posting an 11 percent drop in U.S. sales last year. Japan’s third-largest automaker joined Toyota Motor Corp. and Honda Motor Co., the two biggest, in trimming 2008 North American production.

“This is the kind of business scenario companies need to operate under,” said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. “Sales stink, and all manufacturers are being impacted.”

While Japan’s biggest automakers haven’t followed U.S.- based competitors in shutting factories or cutting jobs, they’re under pressure to adjust to the prospect that deliveries in the world’s biggest auto market will fall again in 2009.

Japan’s Yomiuri newspaper, citing unidentified sources, reported in its Jan. 15 edition that Nissan expects an operating loss for the fiscal year that ends in March. Toyota also is forecasting an operating loss, its first in 71 years.

Altima, Titan

Nissan builds models including the Altima sedan in Smyrna and the Titan pickup in Canton. Parrett didn’t give specifics on how U.S. production volumes would be affected by the shortened workweek.

“We don’t know when it might change or if it might change,” Parrett said.

The Smyrna plant has more than 5,000 assembly workers, and Canton has more than 3,700, according to Nissan’s Web site. They aren’t represented by the United Auto Workers.

Nissan offered early-retirement incentives last year to employees in Tennessee to shrink the workforce and pare output, the company’s second such program in as many years. Virag said Toyota and Honda may have to follow Nissan in further slowing North American production.

Honda has no plans at present to go to a four-day workweek, spokesman Ron Lietzke said today.

“We’ve announced a reduced production schedule through the first quarter,” said Lietzke, who is based in Marysville, Ohio. “We’ll continue to make adjustments based on what’s going on in the marketplace.”

‘Long Way to Go’

Toyota “is doing all it can to reduce costs,” and has “a long way to go” before a move such as laying off workers would be considered, Jim Wiseman, vice president of external affairs for the automaker’s North American production unit, said in a Jan. 12 interview at the Detroit auto show.

Wiseman declined to say whether Toyota was considering an early-retirement program similar to Nissan’s. Toyota suspended production at its San Antonio truck plant and a line in Indiana for three months last year. Employees continued to receive full pay during that time.

Nissan’s U.S. operations are based in Franklin, Tennessee. The company’s American depositary receipts fell 7 cents, or 1 percent, to $6.90 at 5:20 p.m. New York time in Nasdaq Stock Market composite trading.

An engine plant in Decherd, Tennessee, also will reduce production, using a different approach, Parrett said. He was checking on whether Nissan’s two Mexico auto factories would be affected.

SOURCE: BLOOMBERG.COM