Ford Motor Co, the second-largest US automaker, may have to abandon its plan to forgo federal loans as the weakening economy threatens to drive domestic sales 10 per cent lower than the company’s forecast.
Ford expects US light-vehicle sales will reach 12.2 million units this year, almost 2 million more than the annualised sales rate over the last 3 months. Chrysler LLC predicts sales may reach 11 million, while General Motors Corp projected a range yesterday of 10 million to 11 million.
“The market will not reach 12.2 million units this year, no way, no how,” said John Wolkonowicz, an IHS Global Insight analyst. The Lexington, Massachusetts-based consulting firm trimmed its 2009 sales estimate last week to between 10 million and 10.5 million.
Sales at that level would trigger the need for as much as $13 billion in loans, Ford told Congress last month. That would undercut the company’s attempt to win customers by portraying itself as Detroit’s healthiest automaker, after GM and Chrysler both sought federal financial aid.
The US automakers and industry analysts agree that domestic sales will fall again this year after tumbling 18 per cent in 2008 to 13.2 million units, short of the annual average of about 16 million over the past decade. The size of the plunge is the only dispute.
Citigroup Global Markets Inc. predicts 2009 US sales will be 10.8 million, while Goldman, Sachs & Co projects an 11- million vehicle market.
Ford’s “game plan is to keep going on our own” and not seek federal loans unless “the world implodes as we know it,” Chairman William Clay Ford Jr told reporters on Sunday at the North American International Auto Show in Detroit.
