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NEW YORK (AP) – The good news for the U.S. auto industry in December came when General Motors and Chrysler got their federal bailout.
The bad news is coming Monday, when automakers are expected to report another month of staggering sales declines.
Many analysts are predicting the industry to report that U.S. sales in December dropped about 40 percent, bringing an official close to what has been one of the industry’s most trying years and providing little hope for much improvement in 2009.
“I’m off the same 40 percent that everyone else is,” said David Kelleher, owner of two Chrysler dealerships in the Philadelphia area.
“I’ve had to downsize quickly to get in front of this. We’re hanging in there.” The auto Web site Edmunds.com is predicting December sales of 852,000 light vehicles in the U.S., down 38 percent.
Deutsche Bank auto analyst Rod Lache predicted a sales drop of 41 percent to a seasonally adjusted annual rate of 9.5 million.
That figure reflects what sales would be if they remained at that month’s pace all year, with adjustments for seasonal fluctuations.
“All the negative factors that were with us the last three months will still have an impact on sales in December as well,” said Jesse Toprak, executive director of industry analysis for Edmunds.
U.S. auto sales fell 37 percent to 746,789 in November, their lowest level in more than 26 years, as skittish consumers avoided big purchases, unemployment and home foreclosures rose, and tight credit markets made it difficult for some willing buyers to obtain loans.
Edmunds expects sales for the full year will total just over 13 million, down 18 percent from 2007 and the lowest level since 1992, according to Ward’s AutoInfoBank.
Sales peaked at 17.4 million in 2000. As the battered industry staggers into 2009, analysts caution that the sales slump is likely to persist.
“Perhaps by the second half of (2009) there can be a case for an improved economy, or at least an economy that’s getting back on its feet,” said George Pipas, Ford Motor Co.’s top sales analyst.
J.D. Power & Associates is forecasting sales this year of 11.4 million units. Chrysler in its presentation to Congress last month said it expects industrywide sales of 11.1 million in 2009, while GM said it will become profitable again once annual sales return to between 12.5 million and 13 million.
A major source of trouble in 2008, particularly for the Detroit Three, was consumers’ newfound aversion toward pickups and sport utility vehicles.
These high profit-margin vehicles have been the bread and butter for GM, Ford and Chrysler, and Asian automakers like Toyota Motor Corp. and Nissan Motor Co. boosted their own truck and SUV production in recent years.
But if December is anything like the rest of the year, 2008 will be the first year that passenger cars outsold trucks and SUV since 2000
Source:Thestar
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