Analysts predict 48% plunge in Chrysler December sales

Industry analysts are again predicting Chrysler will be the big loser among the major automakers when December and 2008 calendar-year sales are reported on Monday. The average of predictions is a 48 percent dive with two analysts, Christopher Hopson of IHS Global Insight and John Sousanis of Ward’s Automotive forecasting sales dropping by half or more. Consumer concerns about Chrysler’s prospects added to the company’s truck-heavy lineup and negative perceptions about product quality and reliability to compound the difficulties being encountered by all automakers with tight credit and a deteriorating economy.

Similar problems are being faced by General Motors, which analysts say also will take a major hit. The consensus of the analysts polled is that GM sales will be down 41 percent. Ward’s Sousanis also also more pessimistic about GM, forecasting a 45 percent nosedive. GM’s heavily promoted incentives don’t seem to be having a significant effect on sales, according to Jesse Toprak of Edmunds.com who says industry-wide December sales will be the worst in more than ten years.

Ford is seen faring the best of the Detroit car companies, with sales down about a third. IHS’ Hopson is the most pessimistic on Ford, looking for a 37 percent shortfall.

One encouraging sign for the Detroit automakers is that falling gas prices are stirring consumer interest in light trucks, like SUVs, crossovers and pickups. Gas prices have fallen to the same level as those of 1970, when adjusted for inflation. GM’s Mark LaNeve, head of North American sales, said sales were up “considerably” from November.

Everyone is looking for December’s selling rate to be the worst since the early 1980s, with most forecasting a seasonally adjusted annual sales rate (SAAR) of less  than 10 million light vehicles, the lowest SAAR since 1982. Sales in the final month of 2008 will likely be down more than a third from December 2007 and would mark the third month in a row, U.S. monthly light vehicle sales failed to reach a million units. Sales have declined every month since November 2007.

Total 2008 sales of cars and light trucks will probably come in at around 13 million, about 3 million sales less than recorded in 2007 and the lowest total since 1992. Most analysts also think this will be the year when the import brands claim the majority of sales. Chrysler, Ford and GM are seen as controlling only about 48 percent of the market.

This isn’t to say the import brands won’t be feeling the pain of a market that has contracted about 25 percent since September. Toyota sales are forecast to be off 40 percent and Honda sales will fall about 36 percent. Edmunds’ Toprak sees Nissan taking the second-largest dive, reporting sales down more than 42 percent compared to December 2007.

No one is predicting a major recovery in 2009. The optimists are looking for perhaps 13 million sales, similar to 2008, while others see a further decline to a figure in the 12-12.5 million range. Ford is the most optimistic of the Detroit Three, forecasting 12.2 million sales, slightly more than GM’s predicted 12 million. Chrysler, as it was at the beginning of 2008, is the most pessimistic, saying sales will come in at about 11.1 million.