September’s auto sales plunge; GM, Chrysler hit hard

Following a government-funded summer sales boom, the U.S. auto industry took a staggering hit in September with sales plummeting 20 percent from the previous month, according to sales figures released Thursday.

Hit especially hard were previously-bankrupt General Motors Co and Chrysler; both company’s sales tumbled to the deepest margin in September.

GM sales dropped 45 percent while sales at Chrysler were off 42 percent.

Ford managed to hold its sales decline to 5 percent despite low inventories and sharply reduced spending on incentives. The company estimated that it gained 3 percentage points of market share to 15 percent of the U.S. market in September.

On the other hand, Hyundai Motor Co, which has taken market share through the U.S. recession on a growing reputation for low-cost and high-quality vehicles, saw its sales jump 27 percent in September.

According to analysts, industry-wide U.S. auto sales dropped in September, near the weakest point of a four-year downturn in the market.

By contrast, August sales rates had been up, powered by the success of the U.S. government’s “cash for clunkers” program and taxpayer-funded credits of up to $4,500 for consumers who traded in old vehicles.

“We believe consumer traffic at dealerships evaporated in the absence of the incentive program, which ended in August,” Standard & Poor’s equity analyst Efraim Levy said in a note. “However, we expect the September lull to be temporary, as the comparisons get easier and we see the economy improving.”