Jan. 6 (Bloomberg) -- U.S. auto sales plunged 36 percent in December, dragging the industry’s volume in 2008 to a 16-year low as the recession ravaged demand. General Motors Corp.’s annual total was the smallest in its home market since 1959.

Toyota Motor Corp. and Honda Motor Co. reported their first drop in full-year U.S. sales since the mid-1990s after December declines of at least 35 percent. Chrysler LLC’s 53 percent dive last month led major automakers, while Ford Motor Co. slumped 32 percent and GM and Nissan Motor Co. fell 31 percent.

The federal rescue of GM and Chrysler on Dec. 19 couldn’t overcome buyer pessimism and tight credit in the world’s biggest auto market. GM’s 2008 U.S. sales of 2.95 million light vehicles were its fewest in 49 years, and Ford’s tally sagged to a 47- year low, according to trade publication Automotive News.

“It’s one of the worst years ever, and this year will be worse,” said Stephanie Brinley, an analyst at consulting firm AutoPacific Inc. in Southfield, Michigan. “It’s not a gas problem. It’s not a credit problem. It’s a consumer confidence problem, and it’s worldwide.”

Vehicle sales for the year totaled 13.2 million, the fewest since 1992, according to industry-analysis firm Autodata Corp. in Woodcliff Lake, New Jersey. Annual sales for 2007 were 16.1 million.

GM, which probably lost its global sales crown in 2008 to Toyota, retained the top spot among automakers in the U.S., followed by Toyota, Ford, Chrysler, Honda and Nissan.

The December results for GM beat the average estimate of a 41 percent drop among six analysts surveyed by Bloomberg News. Tempering the decline was a 43 percent surge in deliveries of the Chevrolet Malibu sedan. Sales of GM’s Saab brand, which the Detroit-based automaker says it may sell, fell 57 percent.

Toyota, Honda

Toyota’s U.S. deliveries plummeted 37 percent, as it failed to get a boost from no-interest loans offered on most models since Oct. 2. Sales of its Prius hybrid, the best-selling gasoline-electric car in the U.S., fell 45 percent. The Tundra full-size pickup dropped 52 percent, while Toyota’s Lexus luxury brand finished the month down 32 percent.

Honda, No. 2 in Japan behind Toyota, said U.S. sales slid 35 percent. Toyota hadn’t posted an annual U.S. sales decline since 1995, while Honda’s last full-year drop came in 1993.

U.S. automakers accounted for 47.5 percent of domestic sales in 2008, the first year in which their combined market share was less than 50 percent, Autodata estimated. Last year’s figure was 51 percent. Asian automakers had 44.6 percent of the market, while European brands had 7.8 percent, Autodata said.

Last month’s seasonally adjusted annual sales rate was 10.3 million, Autodata said. The November rate was 10.2 million. The December results extended a streak of monthly declines of at least 25 percent dating to September.

‘At the Bottom’

“We are at the bottom now,” said Tom Libby, an automotive analyst at consumer-research firm J.D. Power & Associates in Troy, Michigan. “People have just stopped buying and I don’t blame them. When you have such a decline in savings and net worth, it just doesn’t surprise me sales have fallen so much.”

U.S. jobless rolls reached a 26-year high in the week ended Dec. 20, signaling a worsening labor market as the economy heads into the second year of a recession. That weakness adds to the strain on automakers after record fuel prices in 2008’s first half damped demand for full-size pickups and sport-utility vehicles.

Yesterday’s results also showed the industry’s performance for the month in which GM and Chrysler received commitments for as much as $17.4 billion in U.S. loans, averting what they said would have been a collapse by this month without federal aid.

European Brands

European brands joined the decline among U.S. and Asian automakers. Sales of Daimler AG’s Mercedes-Benz and Smart minicar fell 24 percent last month. Volkswagen AG was down 14 percent, while its Audi unit was off 9.3 percent. Bayerische Motoren Werke AG’s BMW- and Mini-brand autos dropped 36 percent.

December’s industry plunge may have been eased by the resumption of low-cost financing from GM last week, auto- research firm Edmunds.com said, citing a surge in vehicle inquiries on its site and dealer surveys.

Ford’s U.S. sales were “strong” in the last two weeks of the month, Executive Vice President Mark Fields told reporters yesterday in Dearborn, Michigan, where the automaker is based. Ford discounted its remaining F-150 pickups from the 2008 model year after a redesigned version debuted in October.

The F-series kept its title as the top-selling U.S. truck for a 32nd consecutive year, with 515,513 deliveries, Ford said. GM said its Silverado sold 465,065 units. Sales of both models fell 25 percent.

Lack of Credit

At Chrysler, a lack of capital at lender Chrysler Financial may be accounting for a sales decline as much as 25 percent, Steve Landry, vice president of sales for North America, said in a call with reporters. Chrysler intentionally pared sales of unprofitable fleet vehicles by 63 percent last month, he said.

Consumer concern that GM and Auburn Hills, Michigan-based Chrysler would fail to get government aid and be forced into bankruptcy may have contributed to December’s slump, Patrick Archambault, a Goldman, Sachs & Co. analyst based in New York, said in a Dec. 28 research note.

President George W. Bush announced Dec. 19 that GM and Chrysler would get the emergency loans in exchange for restructuring their businesses. GM had said it might run out of operating funds by the end of 2008, while Chrysler had said it might fall short by the middle of this month.

To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

Last Updated: January 6, 2009 00:01 EST