Group 1 sees no rebound in consumer demand

DETROIT (Reuters) - Group 1 Automotive (GPI.N) sees no signs of a rebound in consumer confidence and has "no significant optimism" for U.S. vehicle sales through the end of 2009, its chief executive said on Monday.

The No. 4 U.S. auto dealership chain expects U.S. industry auto sales to rise in October from the previous month due to a higher inventory of cars and trucks but said it has no reason to believe underlying consumer demand has improved.

"I haven't seen anything that makes me optimistic if there is any rebound in consumer spending," Group 1 Chief Executive Earl Hesterberg said at the Reuters Autos Summit.

U.S. auto sales fell to 9.2 million units on an annualized basis in September from the 14.1 million unit rate in August, when car sales received a short-lived boost from the U.S. government's "cash for clunkers" trade-in incentives.

"Market reverted back to demand levels to levels we saw before cash for clunkers. The experience is pretty consistent and traffic is not much better in October than September," Hesterberg said.

U.S. light vehicle sales have dropped severely in the last two years and are expected to total just above 10 million vehicles in 2009, compared with 16.1 million in 2007.

The consensus view among automakers and leading forecasting firms such as J.D.Power and CSM Worldwide is that sales will rise about 15 percent to more than 11.5 million units in 2010.

But still-weak consumer confidence and high unemployment have raised concerns among some dealership groups and industry executives that any recovery for the battered sector is likely to be slow and uneven.

Hesterberg said U.S. auto industry sales of 11 million units for next year would be a "reasonable" forecast and added that the market could climb back to 15 million units in the next few years.

"There surely is pent-up demand the longer this depressed selling rate goes on," he said. "I honestly believe 15 million over the next three years is doable again."

The Houston-based auto retailer operates 96 dealerships. It draws most of its sales from Texas, Massachusetts and California, with the largest share of its new car sales coming from Japanese automakers Toyota Motor Corp (7203.T), Honda Motor Co (7267.T) and Nissan Motor Co (7201.T).

(For summit blog: blogs.reuters.com/summits/)

(Reporting by Soyoung Kim, editing by Matthew Lewis)