Plunging auto sales could hit low point in February or March

— -- Auto sales continue to collapse this month, but less sharply than forecasters said only a week ago, suggesting to some that the end of the market decline is in sight.

"We believe we are nearing the bottom," says Jeff Schuster, chief of global forecasting at J.D. Power and Associates. "Our expectation is for February or March to be the low point."

Nevertheless, Power cut its forecast for the full year's sales to 10.4 million from 11.4 million and pointed out that it previously thought December had been the market's bottom.

"We are very close, dancing around" the nadir of auto sales, says Jesse Toprak, chief of industry analysis at auto-shopping site Edmunds.com, which tracks the industry closely. But it'll take two or three months of stable sales before anybody pronounces the sales slump dead, he says.

Automakers report February sales Tuesday. Whether the analysts and forecasters are optimists or pessimists, they expect February's sales pace to equate to an annual rate of 9.1 million to 9.3 million. That's up from Power's sub-9 million February forecast a week ago, but less than January's actual pace of 9.6 million, as reported by sales tracker Autodata.

"I'd have to look back at 20-plus years of data to find a rate that low," says Toprak of his 9.3 million February forecast.

Autodata says the last time consecutive months were lower than a 10 million annual rate was summer 1982.

Last year, automakers sold 13.2 million new cars and trucks in the U.S. — considered disastrously low. Most forecasts now are for about 10.5 million sales for 2009. But every month that the annual pace is lower than that "digs a deeper hole at the beginning of the year that's harder to climb out of" in later months, Schuster notes.

The numbers are more than an academic exercise. Most big car companies are losing money and trying to slash production and costs fast enough to match the drop in revenue. So far, the sales collapse has outpaced the automakers' abilities to cut back their operations.