Ford Executive Sees 2008 Industry Sales at 13.5 Million

Ford Motor Co. (F) forecast Friday a 2008 industry wide U.S. sales drop of 19% in light vehicle sales and warned the buying slowdown won't change much in the first quarter as the weak economy and the inability to access credit keep consumers away from showrooms.

Full-year sales of light vehicles will drop to 13.2 million compared with 16.2 million in 2007, Ford's chief sales analyst, George Pipas, said Friday. Sales, including heavy and medium trucks, are expected to drop to 13.5 million from 16.5 million in 2007. Auto makers will release their December numbers on Monday.

"The sales rate declined like a lead balloon throughout the year," said Pipas, adding that the annual sales rate fell to 10.6 million in the fourth quarter from 15.6 million units in the first quarter of 2008. "We are not looking for sales in the first quarter to be much different than the fourth quarter."

Pipas didn't disclose Ford's sales results, although he said the auto maker's U.S. market share will also slip closer to 14% for 2008, down from 14.7% in 2007, Pipas said.

Analysts said the drawn-out efforts to secure federal aid for the industry also deterred prospective buyers of U.S. vehicles.

The surge in fuel prices during the first half of 2008 caught some U.S. auto makers flat-footed as buyers migrated from their most profitable truck and sport-utility vehicles toward more efficient passenger cars. In fact, passenger car sales outsold pickup trucks for the first time in the U.S. since 2000.

A bright spot may come in the second half of 2009 as efforts to stimulate the economy finally take hold, Pipas said. Sales are expected to modestly recover in the second half of the year. Ford has said it expects overall sales to come in at 12.5 million units while light-vehicles may hit 12.2 million.

Some industry experts expect sales in 2009 could slide further. Auto parts maker Johnson Controls Inc. (JCI), based in Milwaukee, recently forecasted overall U.S. auto production would fall to as low as 9.3 million in 2009.General Motors Corp. (GM) and Chrysler LLC both won access to $17.4 billion in low-interest loans from the government last month. GM received $4 billion of its total $13.4 billion payout on Dec. 31. Chrysler is still waiting for its $4 billion because of undisclosed application problems.

GM's financial arm, GMAC LLC, also received $6 billion in federal aid earlier this week. The auto maker plans to use the money to offer loans to a wider customer base.

Ford passed on accessing the loans but said it may come back at a later date if the economic situation turns worse.

Ford shares rose 7.4% to $2.46 Friday while GM shares jumped 14.1% to $3.65. Chrysler is privately held

 

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