• We expect the annualized light vehicle selling rate (SAAR) to run in a range of 10.0 – 10.3 million units in January, the midpoint of which would be about 34% below the year-ago pace of 15.4 million, and a little softer than last month’s pace of 10.3 million.

• Unit volume (selling day adjusted) should be down in a range of 35% – 37% versus January 2008, compared to a decline of about 35% in 4Q08. The seasonal factors are favorable this month, which explains how unit volume could be down more than the annualized selling rate.

• The industry faces significant sequential and year-over-year sales headwinds from lower daily rental deliveries in January. Demand from rental car companies is weak; but the decline in deliveries will be exacerbated by severe production declines in January as daily rent vehicles typically turn quickly from production to delivery.

• By maker, we see GM sales down in a range of 40% – 42% year-to-year, with market share dipping to around 22% or less, compared to share of 24.4% in December, and versus 23.9% in the year-ago month. We see the sequential decline in share as partly driven by fewer daily rent deliveries.

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Chris Paukert got his start here at The Truth About Cars. He was, in fact, our first freelance contributor. Since then, it’s been a winding road for Chris. When I heard he was joining Autoblog, I didn’t know to be happy for Autoblog or sad for Chris. Since joining AB, Paukert’s posts have been press release compliant. But, while you can take the boy out of TTAC… Today, Paukert (or one of his eagle-eyed spies) spied the fact that Saturn pulled the “Build Your ’09 Astra” function from their website. Yup, one of GM’s endless stream of Hail Marys has shuffled off this mortal coil. Chris did the right thing and called Saturn for confirmation. “We spoke with Steve Janisse, group manager for Saturn communications, this morning, and he confirmed that while there will be no 2009 model, a 2010 is scheduled and on track for a spring roll-out. Given this unfortunate economic environment and GM’s rude health, of course, we’ll wait to ‘call the ball’ until 2010s are on dealer forecourts.” Aside from the fact that rude health means good health and the glaring lack of the word “bullshit,” it looks like AB might finally have a writer with a pair of stones. We look forward to the competition.

[Read Justin Berkowitz’ review of the Saturn Astra here] 

Leave it to a Texan to spin a subsidy of plug-in hybrids as a “damn the greenies and all things Washington, DC” move. Hard to believe, but that is what Gov. Rick Perry just did in his recent State of the State address. It’s an entertaining read for those who enjoy reading between the lines. Perry starts by decrying big spending interventionist government; then goes on to ask for more money for the state’s Emerging Technology Fund, Film Incentives,  Enterprise Fund, Skills Development Fund, the Texas Grant Program, the Workforce Commission’s Skills Development Fund …. well, you get the idea. But wait, this is The Truth About Cars, not The Truth About Government (someone start that site, ‘kay?).

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AutoNation’s Mike Jackson at World Congress

And yes, we’re talking about the CEO of Autonation, not the one-glove guy. Jackson’s keynote adress to “fellow survivers of 2008” at the Automotive News [sub] World Congress was TTAC-ish enough to be dubbed a “truth-serum” speech by AN’s David Sedgwick. Accompanied by the Laurel and Hardy influenced powerpoint presentation above, Jackson breaks down the great downturn of 2008 with wit and insight. He blames captive lenders like the “General Motors Rejection Corp,” and states that for 95 percent of the market, the price of gas determines the kind of vehicle they want. Check out the changes in captive lender approvals and the $10k swing in Prius residuals over the last year for some compelling evidence that he’s right. Listen to the whole speech below for a concise overview of the year that turned an industry on its head.

At the risk of slipping in a “I told you so,” TTAC flagged the current automotive meltdown back in summer ’06, when new housing starts cratered. A bit late, but there you go. At the time, TTAC pointed out that the housing slowdown would kill pickup truck sales– at the precise moment GM CEO Rick Wagoner and his media groupies were saying the then-new Silverado was GM’s salvation (Edmunds: “If these hit, GM might have a full turnaround on its hands.”) Obviously, we didn’t see the collapse of the entire housing market and then, by extension, the new car market. But we sure as Hell made the connection between too-easy credit (for both homes and cars) and an eventual, inescapable reckoning. I mention all this because it’s obvious enough that new car sales won’t recover until the U.S. housing market recovers. And not just to us. Speaking at the dealer wake in N’orlins, the National Automobile Dealers Association’s chief economist Paul Taylor preached econ 101 to the bruised and battered faithful. 

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At the moment, Chrysler reimburses a dealer for the cost of topping-up the gas tank on a car the dealer sells to a customer. No mas. That little tidbit was buried deep in the Detroit News story about Chrysler’s incipient “traveling roadshow”– a corporate effort to “convince” dealers to order more cars despite the fact that no one’s buying them and it costs money for the dealers to have vehicles sitting on their lots. We also learn that Chrysler has frozen the labor rate for warranty work, scheduled to rise in ’09. “‘I think they understand the place we are in and understand the need for all parties to put some skin in the game,’ said [former Toyota Prez and current Chrysler Co-Prez Jim] Press, who received a standing ovation during the meeting with about 400 dealers.” Somehow I don’t think it was that particular statement that earned Mr. Press the standing O. Perhaps it was his pledge to work for $1 until Chrysler paid back its four soon-to-be seven billion dollar loan. Just kidding. Unfortunately. Anyway, Chrysler’s set a target for channel stuffing– I mean, dealer orders…

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Chrysler is hoping against hope that it can move the moribund metal with an employee pricing incentive interest free what about leasing financing sale. Yes, it’s the kitchen sink of car deals, with every gimmick the freshly capitalized (thank you America) Chrysler can muster. More specifically, Auburn Hills is offering buyers employee pricing– whatever that is– plus $6k off ’08’s, or zero percent financing or low-cost leasing for up to 48 months (for somewhat qualified buyers). Customers who fancy an ’09 Chrysler, Dodge or Jeep product “only” get $3500 off the employee price. No matter what you call it, the reality is that Chrysler continues to drop its prices in the hopes that someone will buy its products. Residuals be damned.

I had to check it myself. Yup. On January 15, General Motors lowered their sales forecast for 2009 from 12m units per year to 10.5. Today, seven days later, Bloomberg reports that The General reckons sales will fall below 10m. “There are a whole bunch of different forces at work,” GM sales analyst Michael DiGiovanni said in a conference call. For that he gets paid? Bloomies tries to fill in the blanks– and falls back on data. “Dwindling consumer demand will further reduce revenue for automakers in the U.S. already reeling from an 18 percent drop in sales last year to 13.2 million cars and light trucks, the fewest since 1992. Monthly annual selling rates have exceeded 10 million units since a 9.8 million pace in August 1982, according to Autodata Corp. of Woodcliff Lake, New Jersey.” And then they give up on GM, preferring to quote the eminently, endlessly loquacious AutoNation jeffe Mike Jackson. “Industry sales are at depression levels of 10 million” Jackson told Bloomberg TV. “The industry is going to need further bridge loans to get through this turmoil.” Hmmm. Did GM lower its forecast to pump-up the volume on the “too big too fail” (a.k.a. it wazzunt me) rhetoric?

Last year, Toyota finished the year with an unsatisfying quasi-tie for the title “world’s largest automaker.” The NY Times reports that ToMoCo has won 2008’s volume battle by a 620k unit margin. According to US News and World Report’s Flow Chart Blog, this is no bad thing. Blogger RIck Newman argues that even the most well-insulated GM executive can no longer deny that things have been going horribly, terribly wrong. The company can move on dot org. It can accept the fact that it’s an underdog that must fight for consumer consideration. It can lose the size queen sheen, and operate as if profits are the real measure of success. (A point GM CEO Rick Wagoner made last year when his minions cooked the books to retain the world’s largest automaker title, before the company ran out of cash.) Most importantly of all, Newman argues, Rick Wagoner can finally tell the truth about cars.

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Have you ever opened a real estate magazine and read “House prices suck. They’re going to get worse. Stay away from real estate”? Obviously not. It’s a perspective problem shared by the American automotive press, whose Panglossian reviews rankle anyone who wants the truth about cars. Yada, yada, yada. Advertising. Unfortunately, the non-critical kudzu is starting to spread. We’ve already blogged the Motown-friendly press’ straw-grasping predictions for a sales recovery. I’d kinda assumed they’d pipe down after December’s debacle. Sigh. “Despite doomsday auto sales forecasts for 2009, promising signs continue to emerge about early January sales in the United States and their potential for growth.” The Detroit Free Press isn’t free, and this is not what I call the press. “Pent-up demand for new vehicles grew to 820,000 new cars and trucks last year, as consumers continued to wait out the dismal economic environment before making a new purchase, according to a report released Monday by CNW Marketing Research. That’s nearly four times as high as pent-up demand was in 2007, CNW said, and the research firm predicted that ‘the bulk of those postponements are slated to return to market in 2009.'” And now, a reality check…

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As US sales continue to tumble of a giant cliff, it becomes tempting to spin a short-term trend into a long-term projection. Just as peak oil theorists were everywhere last summer, warning that gas would never again cost less than $4 per gallon, many analysts now think that the US car market will never again reach 17m per year. Automotive News [sub] takes on the debate, fielding arguments from both sides. On the pessemistic front, players like Pricewaterhouse Cooper see the 17 million years as “an aberration,” artificially pumped up by a false sense of personal wealth, lax lending standards and irresponsible automaker incentives. Daimler’s Dieter Zetsche, Mazda’s Jim O’Sullivan, and private equity baron Wilbur Ross fall in the sub-17m camp as well. They collectively estimate an eventual recovery of 15-16m units by around 2012-2014. The other side of the argument is concisely summarized by Robert Schnorbus of JD Power: “Of course we will return to 16 or 17 million. Every recession we hear this argument that Americans have fundamentally changed, but Americans love their features and comfortable cars.”

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Ex-Toyota and current Ford marketing maven Jim Farley tells Automotive News [AN, sub] that The Blue Oval Boyz “expect” to stabilize their U.S. market share– after a 13-year decline. And if that’s not stretching the boundaries of credibility (your call), Jimbo reckons the new Lincoln MKT and, what was it again? MKS “could” increase the luxury brand’s slice of the American pie. “We think we have a really good chance this year. We don’t know what the luxury market is going to look like, but the one thing we’re really focused on is making sure that people see our products as aspirational and they pay the price.” Although Farley fails to provide a plan to achieve this goal, AN reckons it could may maybe perhaps happen. “Lincoln could gain share even as the brand’s total sales fall below 100,000 for the first time since 1982. Lincoln finished 2008 with sales of 107,295, its lowest total since 1983. With forecasts for lower industry sales in 2009, executives acknowledged that new-vehicle entries may not be enough to keep Lincoln sales in six figures.”

Automotive News [sub] reports that GM’s Zen Master/Product Guru Mark LaNeve is turning his back on ye olde (2006) “market pricing.” You know, where the sticker price reflects the actual selling price. Or thereabouts. “In terms of a pure strategy where we price right to market and have no incentive spending — we have very few vehicles where we’d do that. We’ll have some level of incentive spending almost across the board.” After that… I’m confused. Why has GM increased ’09 product prices by 2.7 percent (roughly $790)? And what’s this mean? “LaNeve said GM prefers to spend incentive money for competitive reasons — not to reduce inventory, as it has been doing, because the latter is ‘wasted money.’ “We continue to want to price our vehicles to the market. We’d like to see incentive spending wane once we get our inventories adjusted. I think it smoothes out after the first quarter. We’re hardly building anything in the first quarter.” So, Uncle Sugar’s paying GM not to build cars, so they can eventually offer incentives to steal market share from carmakers who aren’t being paid not to build cars? Sweet.

Automotive News [sub] reports that VW is bringing the Polo econobox stateside. “Oil prices will rise again,” VW development chief Ulrich Hackenberg said, unaware of the expression’s meaning to Lynyrd Skinner fans. “and that will drive small car sales up further.” Further than…? Hackenberg said VW’s assembly plant in Puebla, Mexico could spit out the Polo for U.S. consumers. He did not say why this hadn’t been done before, when it might start now, whether or not it would be the next gen Polo or what color we should paint his trial balloon. I know! Green!

Toyota is declining to provide details on its next round of U.S. production cuts. Automotive News [sub] illustrates the automaker’s newfound inscrutability. “This is a tough environment, and it may continue for a while,” said Jim Wiseman, Toyota’s vice president of English understatement. Just kidding: Jim’s ToMoCo’s Veep of external affairs. “In addition to slowing production, we are redoubling efforts to cut costs at each of our facilities,” Wiseman added, ominously. Although we don’t know the who, what and when of the cutbacks, Toyota’s why is quickly becoming an industry rallying cry; call it the ET or “even Toyota” defense. “The industry downturn has caused inventories to build up even for Toyota, which is known for running lean and cost-efficient production where parts are delivered in a ‘just in time’ system to be installed in vehicles on the assembly line. It had already reduced North American production of its best-selling cars, including the Camry and Corolla sedans, and suspended work on a new plant in Mississippi that was due to start producing the popular Prius gasoline-electric hybrid car from 2010.” Not so popular now, eh Mr. Bond-san?