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.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Chris Isidore, CNNMoney.com senior writer

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. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.