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Auto sales in the United States expected to fall in September

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September auto sales in the United States are expected to be weak due to a credit crunch, high gas prices and the troubled housing market, reflecting an overall slowdown for the year but little effect from the brief strike against General Motors, industry analysts say.

Indeed, the impact of the two-day strike could be small in what could become the most sluggish year for sales since 1998, according to industry experts.

Jesse Toprak, chief economist for the auto information site Edmunds.com, predicts Honda Motor Co. will be the only automaker to report an increase in sales, helped by the arrival of the new 2008 Honda Accord. Automakers are scheduled to report September sales Tuesday.

``No one is immune to this general weakness we have in the marketplace,'' Toprak said.

Auto sales will probably be down four per cent compared to last September, JPMorgan auto analyst Himanshu Patel said.

Patel predicts Ford Motor Co. will be among the weakest performers, with double-digit declines from last September, as the automaker cut back on incentives as well as sales to rental car companies. Patel said GM should be flat while Chrysler LLC will also see some declines.

Ford's continuing slide in U.S. market share should be a source of concern for investors, Lehman Brothers analyst Brian Johnson said.

Johnson said Ford's retail sales _ which don't include sales to rental, government or corporate fleets _ are down about 10 per cent for the year, as Ford's aging F-150 faced increasing competition from newly redesigned GM pickups, the new Toyota Tundra and high incentive spending on the Dodge Ram. The success of Ford's crossovers are also eating into sales of its mid-size sport utility vehicles, Johnson said.

``We believe that Ford will continue to suffer severe market share loss next year, as a result of sharply increased competition for some of Ford's key large trucks and the company pulling away from models oriented towards fleet,'' Johnson said in a recent note to investors.

After a slight uptick in August sales, September will fall back into the sluggish pace the industry saw in June and July. Patel forecast an annualized selling rate of 15.9 million vehicles in September. The rate shows what sales would be if they continued at the same pace for the full year. The rate was 16.6 million in 2006.

Johnson anticipates the weakness will continue and the industry will end 2007 with full-year sales of 16 million vehicles. If so, that would be the slowest year since 1998, when a 54-day strike crippled GM's production, and would be one million vehicles lower than the peak of 17.3 million in 2000, according to Ward's AutoInfoBank. Johnson said the Federal Reserve's recent rate cut could help things rebound next year.

The United Auto Workers' two-day strike against GM in September may have had a minor impact on consumers who were deciding whether to buy or not, Toprak said. But he said a strike that short couldn't have made a measurable difference. Toprak said GM had about two months' worth of vehicles in its inventory at the time of the strike.

``If anything, it may have helped them in terms of giving them a couple days' break to adjust production in terms of demand,'' he said.

GM lost production of about 25,000 vehicles due to the strike, according to the automotive forecasting firm CSM Worldwide Inc.

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Auto sales in the United States expected to fall in September
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