Auto sales are said to be the lowest now since the early 1980's. October will mark the 12th consecutive month of sales declining. Sales for October are expected to be down 30%, due to weak consumer confidence and tight credit. Sales had already been doing poor before the credit crunch because of high gas prices and deflated home values. Manufactures have been taking desperate measures to keep sales afloat. Toyota launched a zero percent financing on most all its models and Honda keep sales up with employee pricing. Even though gas prices have been falling rapidly, sales have not seem a significant increase. George Pipas, Ford's US sales analyst says that gas prices are no longer peoples main concern, "They're worried about jobs, their homes, and rising health care costs." Demand on small cars has stayed high despite low gas prices, but profits on these models is small.
The fact that people are not going out and suddenly buying new cars because of lowering gas prices does not surprise me. Most realize that oil prices are bound to increase again and will be back to $4.00 a gallon in no time. Also like Pipas stated, people have bigger concerns right now and cannot afford a new car right now.
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