Forecast: Don't expect auto rebound
J.D. Power suggests sales will remain sluggish through the first quarter of '09, which could worsen the cash squeeze for GM even with government aid.
NEW YORK (CNNMoney.com) -- Weak auto sales are likely to continue through the first quarter of 2009, according to a new forecast from respected industry consultant J.D. Power and Associates.
That could create further problems for the struggling U.S. automakers, even if they get the federal loans now being considered by Congress.
Tom Libby, senior director of industry analysis for J.D. Power & Associates, said his firm is now forecasting a seasonally adjusted annual sales rate of about 10.5 million vehicles for December and between 10.9 million and 11 million in the first quarter of next year.
"Our position is there is no reason to believe that the first quarter of 2009 will be any better than the fourth quarter of 2008," said Libby.
The plan submitted to Congress last week by General Motors (GM, Fortune 500) forecasts significantly stronger sales in December and somewhat stronger first quarter sales than in Power's new estimates.
GM's forecast calls for a seasonally adjusted annual sales rate of about 12.2 million in December for the industry and the company is predicting a little more than an 11 million sales rate for cars and light trucks in the first quarter of 2009.
The world's largest automaker suggested in its plan to Congress that it could need more money, and quickly, if sales are weaker than its forecasts. Its needs could rise to $15 billion by the end of March if its worst case scenario proves true, rather than the $10 billion that Congress is now considering loaning it over the next four months.
GM CEO Rick Wagoner testified to Congress last week he believes his firm's forecast is sufficiently conservative to be realistic but that GM will still need $4 billion just this month.
GM's full-year forecast for 2009 is roughly in line with rival Ford Motor (F, Fortune 500). It is calling for sales of just under 12 million vehicles in 2009 while Ford is expecting just over 12 million sales in the period. Chrysler has the most conservative forecast. It is predicting car and light truck sales of 11.1 million for all of 2009. 
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