Ford sees February U.S. auto sales near 9 million annual rate

DEARBORN, Michigan Fri Feb 27, 2009 2:59pm EST

Trucks displaying American flags are lined-up for sale at a local Ford auto dealership in Encinitas, California February 3, 2009. REUTERS/Mike Blake

Trucks displaying American flags are lined-up for sale at a local Ford auto dealership in Encinitas, California February 3, 2009.

Credit: Reuters/Mike Blake

DEARBORN, Michigan (Reuters) - Ford Motor Co (F.N) expects U.S. auto industry sales to drop to about a 9 million unit range on an annualized basis in February as retail demand slipped, the automaker's chief sales analyst said on Friday.

U.S. retail sales for the industry likely fell about 40 percent in February from a year earlier under a decline in U.S. consumer confidence, Ford's George Pipas told reporters, adding that Ford's retail results could be slightly worse than that.

"The environment continues to be very challenging," he said.

Overall, the annualized rate of retail sales, which had remained relatively stable from October through January, appears to have taken "a step down in February," Pipas said, adding that sales to fleets remain difficult to predict.

In January, U.S. auto sales fell 37 percent overall from a year earlier. The annualized rate, a key measure for economists, fell to about 9.57 million vehicles, the lowest monthly rate since 1982.

Automakers will also face tough year-over-year comparisons in February. The U.S. annualized rate of sales was about 15.4 million units in February 2008, roughly the peak for the year.

Pipas said the U.S. annualized rate of retail sales was in the mid 8 million unit range in January for the industry and will likely be below 8 million in February.

Pipas said that while Ford still expects U.S. auto industry sales to begin to recover in the second half of the year, it is not building that assumption into its production plans.

Ford expects to build more vehicles in the second quarter in North America than the 375,000 vehicles it plans to assemble in the first quarter of this year, but that will be down overall from its second-quarter production in 2008, he said.

The automaker does not plan to increase production appreciably until it sees a rebound in sales, he said.

U.S. government stimulus programs should benefit auto industry sales, but more in the latter half of the year than in the near term, Pipas said.

On Thursday, Ford cut the lower end of its 2009 U.S. auto industry sales forecast to 10.5 million vehicles, but affirmed that it had sufficient liquidity to complete its turnaround plan without seeking government emergency support even if sales fell much steeper than that.

Ford expects the U.S. auto industry sales rate to be closer to the roughly 10.3 million annualized rate from the fourth quarter of last year than to the levels seen in January and expected in February, he said.

(Editing by Matthew Lewis)