GM Cuts 2009 Outlook

The automaker now says it assumes 2009 sales of 10.5 million vehicles and worldwide sales of 57.5 million vehicles.
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General Motors

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has cut its auto-sales outlook for 2009.

The automaker now says it expects 2009 sales of 10.5 million vehicles and worldwide sales of 57.5 million vehicles, which represents "more conservative industry volume assumptions that those presented to Congress" in December, GM said Thursday, in a prepared statement.

The company's report to Congress included a "downside scenario" of 10.5 million U.S. sales in 2009, with a "baseline scenario" of 12 million sales.

Lowering the assumptions "will drive tougher operational decisions that will result in a more robust viability plan, one that better positions the company for long-term growth as the auto market recovers," GM said Thursday.

The update was part of a review by GM executives at an auto analysts conference in Detroit. "We are on track to accomplish the requirements of the viability plan," CEO Rick Wagoner said. "We know we have a lot of work in front of us, but we are already working closely with many key stakeholders."

When Wagoner appeared before Congress in December, GM was seeking an $18 billion bailout. In the report it submitted at the time, GM said the portion of the money it would actually use would vary according to domestic sales. Under "the downside scenario," with sales at 10.5 million in 2009 and 11.5 million in 2010, GM said it "would make full use" of the money.

So far, Congress has approved a bailout of $13.4 billion for GM.

The last time domestic vehicle sales fell below 12 million was 1982, when the total was 10.4 million, according to J.D. Power and Associates. In 2008, domestic sales were 13.2 million, down 18% from 16.1 million in 2007.

At the moment,

Ford

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projects 2009 sales within a wide range, with the low in the 10 million range and the high at 12.2 million. Ford is expected to be more specific in its first-quarter earnings call, which has not yet been scheduled.