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For Carmakers, Just How Bad Can It Get?

John Wolkonowicz, senior market analyst at Global Insight, projects 2009 sales of around 10 million, a number he calls "horrendous." He says, "The fourth quarter is going to be awful. We are continually lowering our forecasts as we get more information. We have lost consumer confidence, and credit is hard to get."

Announcing a four-week Christmas shutdown, Chrysler said its dealers have lost an estimated 20% to 25% of their volume because "willing buyers for Chrysler, Jeep and Dodge vehicles are unable to close the deals due to lack of financing."

Ford analyst George Pippas says the annualized sales rate declined sequentially through the year, from the low-15 millions in the first quarter to the low-14 millions in the second quarter, to the high-12 millions in the third quarter to the mid- to low-10 millions in the fourth quarter.

"We believe these numbers are going to persist well into 2009," Pippas says. "But there is so much uncertainty about the state of the economy that putting a specific number out there is a pie-crust forecast. It is easily made and easily broken."

One immediate result of a sales volume around 10.5 million would be that Ford may need a higher line of credit than the $9 billion it sought from Congress earlier this month. Ford said that request was based on a forecast of auto sales at the then-current rates, equal to 11 million in 2009 and 12.5 million in 2010.

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