Industry analysts are predicting a lackluster end to an already dismal year for automakers in the US, likely the worst in nearly a decade.
Holiday discounts failed to bring consumers out of their funk, and this month's sales are expected to fall around 4 percent, which would bring the full-year total for US auto sales to 16.1 million vehicles, the lowest volume since 1998.
Sales have been hurt by consumer anxiety over gas prices, the housing crunch and the overall weakening economy.
Industry watchers warn that the auto sales performance could be even weaker next year.
"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 Edmunds.com. Toprak said there was little promise for a turnaround until 2009.
Japanese automakers also are expected to see lower sales this month, particularly as the housing crunch continues to dampen demand in California, their most important market.
Toprak predicts Toyota's sales will be down 3 percent compared with last December, while Honda Motor Co's will fall 1 percent. 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.
Bear Stearns analyst Peter Nesvold said in a recent note to investors that he is even more concerned about next year's auto sales than he was a year ago, since consumer sentiment and employment levels are continuing to deteriorate. Nesvold said the US has not seen a meaningful downturn in auto sales in 15 years and is long overdue for one.
"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 US sales. Toyota Motor Corp, which outsold Ford by 15,000 vehicles last month, is on track to overtake Ford this year.
Robert Barry, an auto analyst with Goldman Sachs, predicts Ford's sales will fall 3 percent this month compared with a relatively weak December last year. Barry said Ford is struggling because it is 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 is being hurt by aggressive incentive spending by Toyota and other rivals.
Nesvold predicts Ford's sales could fall as much as 12 percent this month, saying 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 percent 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 percent this month, the same amount the automaker cut fleet sales last month. 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 this month, particularly since the automaker's car sales shot up 48 percent last December thanks to brisk sales of the Chrysler Sebring and 300 sedans.
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