Nissan sees tough U.S. first-quarter

By David Bailey

DETROIT (Reuters) - The first quarter is likely to be the toughest of 2009 for automakers in the United States and Nissan Motor Co Ltd plans reasonable sales incentives, its top sales executive in North America said on Monday.

"We think the first quarter is going to be the most difficult of the year," Al Castignetti, vice president for Nissan sales in North America, told Reuters in an interview.

Nissan, which posted a 31 percent sales decline in December and a nearly 11 percent decline for 2008, did not fare too badly against competitors in December or the industry overall in 2008, he said.

Sales in the first half of 2008 saw only limited declines, but the bottom fell out as the year went on due to the sharp rise in gas prices and the recession, Castignetti said.

That means the months in the first half of 2009 will be compared to a more robust first-half of 2008, while comparisons become easier to meet in the second half.

He hoped consumer fears would settle and banks would ease their lending restrictions. He said there was better customer traffic levels in Nissan dealerships in December than in November.

"We think the first quarter is going to be a difficult one. The first quarter in the automotive industry generally, even during a robust year, is the most difficult," he said.

Automakers had added sales incentives such as cash back and favorable interest rates to move vehicles as the downturn picked up in the second half of 2008. Nissan also increased incentives, according to Edmunds.com and Autodata Corp, but theirs remain significantly lower than U.S.-based rivals.

"We have been fairly consistent with holding our incentives to a fairly reasonable level and we will continue to be able to do that as long as this thing doesn't get worse," he said.

"If the marketplace stays where it is at or gets better than we will be OK," he said.

Castignetti said interest in full-size trucks and SUVs increased which he said could be attributed to declines in gasoline prices.

"I'm not saying there was a great migration to that, I'm just saying that we started to see it move a little bit," he said of the interest in larger vehicles.

Castignetti also declined to forecast U.S. auto industry sales.

"We are not making any predictions. After going through what we just went through in '08, I'm not sure I believe any of them anyway," he said.

(Reporting by David Bailey, editing by Leslie Gevirtz)