Sunday, January 3, 2010

2009 Cannot End Soon Enough For Car Makers

By David Bailey

DETROIT (Reuters) - U.S. auto sales are expected to end 2009 on a slight upswing in December, capping a year that saw General Motors and Chrysler collapse into bankruptcy and China overtake the United States as the biggest car market.

The deepest U.S. economic downturn since the Great Depression hammered auto sales through most of 2009, but a poll suggests December will mark a third consecutive month of modest growth in the annualized basis favored by industry analysts.

The results would point toward a gradual recovery in U.S. auto sales in 2010, an outlook favored by most in the industry, but still leave sales rates well below figures not imagined by even the most pessimistic of analysts two years ago.

The main question: Will sales rally enough in December to make 2009 the worst year for U.S. light vehicle sales since 1982, or will they fall short, marking the worst year for U.S. auto sales since 1970?

TrueCar analyst Jesse Toprak expects 2009's U.S. auto sales to be the worst since 1970, or 1950 on a population-adjusted basis. Sales to corporate fleets or car rental companies remain a wild card and could push the total higher, he said.

"I think what we are going to see in 2010 in a nutshell is steady and slow recovery," Toprak said in an interview. "The fundamentals that fuel new car sales are improving, but there is still a lot of skepticism from consumers."

U.S. light vehicle sales are expected to be down nearly 40 percent in 2009 from the most recent peak of nearly 17 million in 2005 -- and only because U.S. government "cash for clunkers" incentives boosted sales sharply in July and August.

The collapse in U.S. auto sales in 2009 coupled with surging sales in China approaching 13 million units this year, including commercial vehicles, marked a stark shift in global vehicle volumes that was much quicker than many had expected.

U.S. auto sales on average are expected to come in at an 11 million unit adjusted annualized rate in December, according to a survey of 21 analysts compiled by Reuters. Their annualized outlooks ranged from 10.4 million to 11.4 million vehicles. - News - Asiaone Motoring  read more

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