Chrysler president delivers a gloomy auto sales forecast

— -- Chrysler President Jim Press says there will be no quick auto-sales rebound and that total U.S. sales will hold at about 10 million a year — a level that others in the industry say would quickly drive a number of car companies out of business.

"It implies that nothing works. That we're really in a depression, not a recession," says Rebecca Lindland, head forecaster at IHS Global Insight's auto unit. She predicts 10.3 million this year, but then five years of significant gains.

Press said in a Chicago speech last week: "It would be a mistake to assume that this 10 million market is an aberration. Instead, we need to accept it and come to grips with it.

If January's new vehicle sales pace held all year, the total would be a mere 9.6 million, according to sales tracker Autodata.

Press' forecast "is the lowest number I've heard out of the industry — from automaker or analyst," says Aaron Bragman, auto-market analyst at IHS.

Last year's new car and truck sales in the U.S. were 13.2 million, down 18% from 2007 and worst since 12.9 million in recessionary 1992. Chrysler's were about 1.5 million, down 30%.

Assuming the same market share, Chrysler would sell about 1.3 million in a 10 million market.

Press acknowledged that he erred badly two years ago when he was a Toyota executive and predicted, also in Chicago, that the auto industry was entering a "golden era."

Nevertheless, he said, Chrysler is planning for the "harsh new reality" assuming about 10 million annual sales by all automakers "for up to four years."

"You'd have to reduce the number of auto manufacturers" if that happens, says Stephanie Brinley at industry consultant AutoPacific. "It doesn't allow profits" sufficient to support the 20 automakers currently here, she says.

Largely due to last year's sales collapse, General Motors and Chrysler already are so broke they're living on money borrowed last quarter from the government. They are to provide progress reports Tuesday to show they deserve more loan money.

The U.S. has about 250 million cars and trucks on the road. Historically, 6% are scrapped yearly. Simply replacing those would generate 15 million sales. Scrappage recently has slipped to less than 5%, but that's still more than 12 million a year.

"Cars last longer than they used to, but we eventually need to replace vehicles," Brinley says.

Automakers must be careful not to cut so much production capacity that they "get caught flat-footed if there is a recovery," Lindland says.

George Pipas, sales analyst at Ford Motor, says 10 million, ongoing, "implies a lot of two-car families go to one car, and then what's a two-income family do to get to work?" U.S. rail and bus systems couldn't compensate, he says. "I don't want to imply it might not be that (10 million) this year, but if that's the 'new normal,' you're taking 2.5 million vehicles off the road a year — pretty draconian."