Talks About Cars

After the December holiday rush, it’s expected that sales will decline. But January sales decline this year is quite notable. Analysts predict that American sales could drop by 3% or as many as 36,000 vehicles this month.

"Car sales were remarkably slow in January, probably in part because of dramatic stock market fluctuations that flustered consumers at a time when the housing market and other economic uncertainties were also making headlines," said Jesse Toprak, the executive director for industry analysis at Edmunds.com.

How grave is the expected decline? Analysts noted sales in the United States won’t improve until the second half of this year at the earliest. The controlling factors include the success of newly launched products and the national election.

At present, auto shoppers are getting playful. And some are getting pessimistic.

"Our sense is macroeconomic pressures, particularly deteriorating consumer confidence and gas 'permanently' above $3 a gallon, will increasingly catch up with consumers throughout 2008, weighing on demand for durable goods," Bear Stearns analyst Peter Nesvold said in a recent note to investors. "For many consumers, a new vehicle purchase has become largely a discretionary item."

Robert Barry, an analyst with Goldman Sachs, said in an interview with the Associated Press that while consumers can take comfort in the fact that gas prices seem to be stabilizing, they are still scared off by the weak labor market. He predicted annual sales of 15 million vehicles this year, which would be the lowest U.S. sales rate since 1993.

Other analysts, meanwhile, predict higher sales. But most of them said sales will likely fall below 16 million. Last year, there were 16.3 million vehicles sold. What’s more, Detroit’s Big 3 - GM, Ford, and Chrysler is likely to take the largest blows.