Auto sales for '08 may have plunged 3M vehicles

DEARBORN, Mich. -- Auto industry sales likely hit 13.5 million for all of 2008, Ford's head of sales analysis said Friday, dropping a breathtaking 3 million vehicles compared with 2007.

That's the largest year-over-year decline in sales since the change between 1973 and 1974, when the oil embargo crisis had drivers lining up outside gas stations waiting for fuel.

Instead, sales in the first half of the year now look positively rosy. Although gas prices constrained SUV and pickup sales, it wasn't until the banking crisis hit this fall when auto sales really fell off. Monthly sales in the fall didn't even hit 1 million, which hadn't happened since 1992.

December sales could be equally disappointing. Pipas says he's expecting sales to come in at 10.6 million on an annualized rate, which would be a 35% to 40% drop from December 2007. And sales in the first few months of 2009 could be just as dismal.

"We are not looking for first-quarter overall U.S. sales to be much different than the fourth quarter," said Pipas, speaking to reporters over coffee at a Border's book store near Ford's headquarters. Ford was closed for two weeks over the holidays.

The automaker has been attempting to match its production levels with actual demand — a strategy that sounds simple but is tough to put into action. Earlier in the year, when truck sales fell off, Ford reacted by slashing production of the F-150 and postponing the release of the newest version of the truck. But Pipas says the company overcorrected and is planning to increase F-150 production in the first quarter, even though demand isn't expected to pick up significantly.