It appears that the automakers in Detroit, along with cranking out automobiles they often can't sell, have developed a secondary line involving the manufacturing of silk purses from sows' ears. That's the impression you might get from the automakers' reaction to their ultrasoft August sales figures.
General Motors (NYSE: GM), still the bellwether car company, saw its sales for August tumble by 20.3% year over year. That decline prompted the company's vice president for North American sales to talk in terms of an imminent bottom for sales on this continent. Year to date, the company's sales are running at an 18.1% slower pace than during the same portion of 2007. And the slump is happening despite its "Employee Discount for Everyone" sale on remaining 2008 models.
But GM was hardly alone. Ford (NYSE: F) took a 26.5% hit in August, and Chrysler dropped by a whopping 34.5%. Even Toyota (NYSE: TM), which until recently has been almost lapping its competition, checked in with a 9.4% drop for the month. Its Japanese neighbor Honda (NYSE: HMC), which is in positive territory with a 1.7% gain year to date, suffered a 7.3% fall in August. U.S. sales of Daimler's (NYSE: DAI) Mercedes-Benz fell by 11.8%.
The companies are scrambling. Ford, for instance, is expanding its employee-buyout program in an effort to cut costs. And Toyota, which had lurched too far into the truck lane with its relatively thirsty Tundra, is now retooling North American plants to allow for the manufacture of its hybrid Prius here.
Beyond that, Honda has just unveiled a new pure-hybrid concept car of its own that it hopes will go hood-to-hood with the Prius in buyers' hearts and wallets. The company expects to have its Insight -- a five-passenger hatchback -- ready for sale in the U.S. in the spring. The company wouldn't discuss the model's specific fuel efficiency or price, but it did allow that the car will be priced "significantly below hybrids available today."
In the meantime, with the automakers clearly stuck in the August muck as the U.S. economy continues to soften, there clearly are better places for Foolish investment dollars to be parked.
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