In addition to maintaining key customer,supplier and government contacts in their respective markets, our regionalmanagement teams centrally manage key aspects of our operations whilepermitting our divisions enough flexibility through our decentralizedstructure to foster an entrepreneurial environment.HIGHLIGHTS-------------------------------------------------------------------------The first quarter of 2009 was among the most difficult periods in the historyof Magna due to exceptionally low production volumes at our customers. Vehicleproduction in North America and Europe declined 50% and 40%, respectively,both compared to the first quarter of 2008. Sequentially, first quarter 2009vehicle production in North America and Europe declined 37% and 13%,respectively, from the fourth quarter of 2008.The low North American production volumes are substantially attributable toweak sales and high dealer inventory levels, particularly in the U.S In thefourth quarter of 2008, U.S. vehicle sales dropped to annualized rates notseen in more than 25 years, and there has been no recovery in these salesrates to date in 2009. European vehicle production declined at a slower pace,due in part to "scrappage" programs announced by certain European governments,including Germany, France, Italy and the United Kingdom.
These programsgenerally provide financial incentives for consumers to replace older, lessfuel-efficient and typically higher polluting vehicles, with new vehicles,thereby stimulating vehicle sales. As a result, annualized European vehiclesales recovered somewhat in February and March from the low point in January2009. Nevertheless, while Western European monthly vehicle sales rates havesequentially improved, they remain well below 2008 levels.Our first quarter 2009 financial results reflect the challenging environmentwe are facing. Our total sales declined 46% in the first quarter of 2009, ascompared to the first quarter of 2008, as a result of the significant declinesin vehicle production in our two principal markets, along with a 63% declinein complete vehicle assembly sales, and declines in Rest of World sales andtooling and other sales.
Operating income for the first quarter of 2009decreased $516 million, to a loss of $230 million, from income of $286 millionin the first quarter of 2008.Last week, Chrysler, our fourth largest customer based on 2008 consolidatedsales, filed for bankruptcy protection in the United States. In the firstquarter of 2009, consolidated sales to Chrysler represented approximately 11%of our consolidated total sales. While we have taken a number of protectivesteps in anticipation of Chrysler's filing, including participation inCanadian and U.S. supplier receivables protection programs, we are currentlyunable to fully assess the extent to which the Chrysler filing will impact ourfinancial position and our operations.In addition, General Motors, our largest customer, representing approximately19% of our global sales in the first quarter of 2009, has received billions ofdollars in government loans and is in need of further loans, has been given amandate by the U.S. Government to restructure and present an acceptable planfor future viability by the end of this month. Depending on the U.S.Government's assessment of this plan, and other factors, General Motors mayseek bankruptcy protection. We are unable to assess the extent to whichGeneral Motors' restructuring actions, including potentially filing forbankruptcy protection, would impact our financial position or our operations.However, since both Chrysler and General Motors are significant customers,their respective restructurings could have a material negative impact on ourfinancial position and operations.We have taken a number of actions to offset the vehicle production declines,and have initiated further cost-saving measures that we expect will benefitour financial results for the remainder of this year and continue into nextyear.
However, General Motors and Chrysler have both recently announcedextended shutdowns of certain of their assembly plants and significantproduction cuts at other plants over the coming months. As a result, our salesand earnings will continue to be negatively impacted in the short term.This ongoing period of extremely low auto production in North America isexpected to further reduce our cash resources. However, it will likely have amore severe impact on other suppliers whose financial condition issubstantially worse than ours. This should provide us with furtheropportunities to gain additional business, either through acquisitions ortakeover business, and position us for recovery when North American autoproduction returns to more sustainable levels.INDUSTRY TRENDS AND RISKS-------------------------------------------------------------------------Our success is primarily dependent upon the levels of North American andEuropean car and light truck production by our customers and the relativeamount of content we have on their various vehicle programs.