U.S. Auto Sales Shape Up to Be a December to Forget

Consistent with the rest of the truly dreadful second half of 2008, U.S. auto sales in December are expected to fall about 38 percent from the year-ago month, despite "incredibly generous deals," according to Edmunds.com.

If there is a silver lining for Chrysler, Ford and GM in this very dark cloud, it's that truck sales are expected to outnumber cars for the first time since February, Edmunds.com said.

The month of December has a recent history of being a sales boomlet at the end of the calendar year, second only to the typical monthly sales peak at the end of the model year, in late summer or early fall. That's when there are clearance sales on expiring models, and traffic for new models.

Luxury brands are more likely to hit a monthly sales peak in December, thanks to a growing tradition of December discounts. That has started perpetuating itself, because so many luxury buyers lease their cars and trucks. That means their old leases usually expire in December, too.

But this year, December is looking like just another downer, according to shopping data from the edmunds.com web site. The firm's December forecast of about 852,000 cars and trucks is only about 15 percent higher than November sales. December is usually 18 percent higher than November, according to Edmunds.

U.S. auto sales in November were 36.7 percent below the year-ago month, according to AutoData Corp. After 11 months, 2008 U.S. auto sales were down 16.3 percent to about 12.3 million year to date. The Edmunds forecast would make the total for 2008 sales about 13.2 million, down about 18 percent from 2007. Most of that drop came in the second half.

"Despite the unit sales increase from November, December's expected 9.8 million SAAR will be the lowest of the year," stated Jesse Toprak, executive director of industry analysis for Edmunds.com. The SAAR is the seasonally adjusted annual sales rate.

"As questions about the economy remain unanswered, many consumers are reluctant to respond to the incredibly generous deals available on new cars," he said.

Automakers are expected to report U.S. auto sales for December and for the 2008 calendar year on Monday, Jan. 5.