U.S. sales probable sank again in Jan., dragged down by fleets

U.S. auto sales in January probable stayed at quarter-century lows for the fourth straight month, as stable demand at dealerships couldn't make up for falling deliveries to fleets.

Few surveys projected that January seasonally adjusted yearly sales rate of 10 million to 10.6 million cars and light trucks. General Motors forecasts a figure below 10 million, which would be the lowest as August 1982.

Analysts expect the largest Japanese automakers to charge better than the Detroit 3 when firms release sales totals tomorrow.

North American production levels that were two-thirds lower than last year's might trigger a 60% decline in fleet sales contrasted with a year earlier, said George Pipas, Ford Motor Co.'s sales analyst.

At best, the sales rate will be around 10.3 million, Pipas said. The vend rate will be in line with current months -- about 8.3 million units. Descending fleet sales "most likely" will drag demand below a 10 million annual rate, he said.

Pain spread around

GM's projection of a January sales rate below 10 million stems completely from decreases in fleet sales, Mike DiGiovanni, GM's executive director of global market analysis, said in a January conference call.

Analysts forecast Chrysler will replicate its 50% December turn down from year-earlier levels, and GM will drop about 40 percent after a 31.2 percent decline in December. Both automakers are making feasibility plans for the U.S. Treasury Department to protect the $13.4 billion in federal loans they've previously received.

Ford sales for January will go down by about a third, analysts say.

The auto information site Edmunds.com forecasts a 26 percent decline for Honda, a 27 % tumble at Toyota and a 31 percent decline at Nissan, for on the whole industry fall of at least 30 percent.

A rate below 10 million would crush any hope that demand hit bottom in November, when seasonally attuned sales fell to a 26-year low of 10.3 million units. The figure increased to 10.4 million in December.

The auto industry is looking to ricochet from its poor sales year since 1992 as the recession extends.

Previous year's U.S. light vehicle sales dropped to 13.2 million, dragged down by soaring fuel prices in the initial part of the year and a global credit chomp later. In 2007, 16.1 million light vehicles were sold in the United States.

January fleet sales went down partially as of U.S. automakers' extended plant shutdowns after the year-end holidays, analysts say. Additionally, some corporations took benefit of GM's December fleet inducements. December fleet deals helped GM unpack about 300,000 more vehicles than Deutsche Bank's Rod Lache expected, the analyst said in a note to investors.

January's North American production declined 64 percent from year-earlier levels, and cuts are continuing. Last week, Honda Motor Co. reduced this quarter's manufacture by about 14 percent. GM eradicated 2,000 production jobs and instituted more impermanent plant closings, and Mitsubishi Motors Corp. extended a shutdown of its U.S. plant to 12 weeks from seven.

The industry commenced 2009 with a 94-day supply of vehicles, more than 50 percent above the level suggested by analysts.

The sustained troubles of fleet customers also might keep sales down. A bill to reform the Troubled Asset Relief Program, sent to the U.S. Senate last month by the House of Representatives, would permit the federal government to expand loans to automakers' fleet customers, comprising car rental firms. Last month, the Hertz car rental firm cut 4,000 jobs, and Avis Budget Group Inc. cut 2,200 jobs in December.

Ford's Pipas told that he wouldn’t expect to see the fleet business come back necessarily in February and March.