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2009 New Vehicle Sales: The Detroit 3 Expect a Deep Freeze in the U.S. Market

Will 2009 offer any relief from this most dreary of car-selling seasons? The Detroit 3 aren't optimistic. Ford Motor, the most bullish of the three, predicts U.S. light-vehicle sales of 12.2 million units in 2009. That would be 900,000 fewer than the 13.1 million expected in 2008 by auto analyst Erich Merkle.

But Merkle holds out hope for a recovery in the second half of 2009. He predicts U.S. sales of 12.8 million for the year, despite forecasting an awful first quarter.

For January through March, Merkle expects that the industry's seasonally adjusted annual rate will be 10.5 million units, an abysmal rate that would match that of the fourth quarter of 2008.

"A 10.5 million (annual sales rate) is no more sustainable than the 21 million we had in July 2005 when General Motors had its employee pricing for all," said Merkle, who is with the accounting and consulting firm Crowe Horwath LLP.

Sales predictions
Here are U.S. light-vehicle sales estimates for 2009, in millions of units:
--- Chrysler: 11.1
--- Ford: 12.2
--- GM: 12.0
--- Crowe Horwath: 12.8

"You get in the middle of this kind of thing, and people think the world is coming to an end. We're going to come out of this."

With inflation in check, the Federal Reserve can keep interest rates at historic lows, Merkle said. When that money eventually becomes available to consumers, there will be pent-up demand for vehicles by people currently shut out of the market or awaiting better economic signals, he said.

By summer, the automotive recession will be nearly 18 months old and probably near its end, Merkle said. His forecast: an annual sales rate of 11 million units in the first half, and 13.5 million to 14 million units in the second.

Chrysler LLC is adopting much more conservative sales projections for 2009 so that it can align its work force and production for lower volumes, said spokesman Stuart Schorr. The company forecasts 2009 U.S. light-vehicle sales of 11.1 million vehicles.

The wide range of forecasts reflects many factors, such as credit availability, that are outside the control of the carmakers, said Toyota spokesman Irv Miller. Toyota hasn't released a 2009 sales forecast. Nor has Honda.

Said Miller: "We'll just have to see what signals consumers pick up and whether they're willing to spend."

By David Barkholz
Automotive News | December 29, 2008
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Tags: 2009 New Vehicle Sales, Detroit 3, U.S. Auto Market, car dealers, car sales, new car sales, sales projections

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