Weak December likely for auto sales

Auto sales aren’t expected to pick up until at least 2009.

DETROIT (AP) — Industry analysts are predicting a lackluster end to an already dismal year for automakers, likely the worst in nearly a decade.

Holiday discounts failed to bring consumers out of their funk, and December sales are expected to fall around 4 percent, which would bring the full-year total for U.S. auto sales to 16.1 million vehicles, the lowest volume since 1998.

Sales have been hurt by consumer anxiety over gas prices, the housing crunch and the overall weakening economy.

Industry watchers warn that the 2008 auto sales performance could be even weaker.

Jesse Toprak, chief economist for the auto information site Edmunds.com said there is little promise for a turnaround until 2009.

Bear Stearns analyst Peter Nesvold said in a note to investors that he’s even more concerned about 2008 sales than he was a year ago, since consumer sentiment and employment levels are continuing to deteriorate. Nesvold said the country hasn’t seen a meaningful downturn in auto sales in 15 years and is long overdue for one.

“In a nutshell, if consumers don’t feel good about the world or employment is slipping, they tend to delay major expenditures such as a new house or car, if possible,” he said.

December is Ford Motor Co.’s last chance to hold on to its longtime position as the No. 2 automaker by U.S. sales. Toyota Motor Corp., which outsold Ford by 15,000 vehicles in November, is on track to overtake Ford this year.

Robert Barry, an auto analyst with Goldman Sachs, predicts Ford’s sales will fall 3 percent in December compared with a relatively weak December 2006.

General Motors Corp. could see an even sharper decline of 14 percent because of a planned cutback in sales to rental fleets,he said, and Chrysler LLC will likely see double-digit drops, particularly since the automaker’s car sales shot up 48 percent last December thanks to brisk sales of the Chrysler Sebring and 300 sedans.

Japanese automakers also are expected to see lower sales in December, particularly as the housing crunch continues to dampen demand in California, their most important market.