Industry analysts are predicting a lacklustre end to an
already dismal year for North American automakers, likely the worst
in nearly a decade.
Holiday discounts failed to bring U.S. consumers out of their
funk, and December sales are expected to fall around four per cent,
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 gasoline prices,
the U.S. housing crunch and the overall weakening economy.
Industry watchers warn that the 2008 auto sales performance could
be even weaker.
``Given the current economic challenges and the uncertainty
associated with the upcoming presidential election, we do not
anticipate that 2008 will be any more robust for the car business,''
said Jesse Toprak, chief economist for the auto information site
Toprak said there is little promise for a turnaround until 2009.
Bear Stearns analyst Peter Nesvold said in a recent 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
``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 three per cent in December, compared with a
relatively weak December 2006.
Barry said Ford is struggling because it's at a low point in its
product cycle, with a major redesign of the F-150 pickup and a new
crossover not due out until next year. In the meantime, it's being
hurt by aggressive incentive spending by Toyota and other rivals.
Nesvold predicts Ford's sales could fall as much as 12 per cent
in December, pointing out that the automaker's newly rebadged Ford
Taurus and Mercury Sable sedans and Taurus X crossover have seen
disappointing results all fall.
But Nesvold said the Ford Edge crossover and Ford's smaller sport
utility vehicles have held up well.
General Motors Corp. could see an even sharper decline of 14 per
cent due to a planned cutback in sales to rental fleets, Barry said.
In a note to investors, Barry said he expects GM to cut fleet sales
by 30 per cent in December, the same amount the automaker cut fleet
sales in November.
Ford also has been slashing sales to rental fleets all year in an
effort to shore up resale value and brand image.
Barry said Chrysler LLC will likely see double-digit drops in
December, particularly since the automaker's car sales shot up 48
per cent last December, thanks to brisk sales of the Chrysler
Sebring and 300 sedans.
Chrysler's newly redesigned minivans could significantly boost
December sales, Nesvold said. But if they don't, analysts may have
to lower their expectations for the vehicles.
Japanese automakers are also expected to see lower sales in
December, particularly as the housing crunch continues to dampen
demand in California, their most important market.
Toprak predicts Toyota's sales will be down three per cent,
compared with last December, while Honda Motor Co.'s will fall one
per cent. Nissan Motor Co. will likely be flat, he said. Nissan has
bucked the slow sales trend in recent months on the strength of its
new Rogue crossover and Versa subcompact.