Reuters Summit - U.S. faces flat auto sales in 2010 - York

By Scott Malone

DETROIT (Reuters) - U.S. auto sales are likely to remain flat in 2010, former General Motors Co director Jerry York said on Monday.

While many analysts and industry observers are expecting a modest rebound from this year's forecast 10 million to 10.5 million sales of cars and light trucks, York said that view underestimates the severity of the economic downturn.

"It's a whole new ballgame, and I just can't fathom anything that's going to cause a material increase in auto sales in this country in 2010 compared to 2009," York told the Reuters Autos Summit in Detroit.

That forecast was considerably grimmer than those of executives from companies including Toyota Motor Corp, BMW and Group 1 Automotive, all of whom forecast growth in 2010 auto sales.

York said his forecast was rooted in economic reality. Initial gross domestic product figures suggest that the United States may have emerged in the third quarter from a recession that began in December 2007 and has gone down as the worst downturn the nation has endured since the Great Depression. Many economists and corporate executives have warned they expect a slow recovery.

"The economy ... quite frankly, I think it's frightening," York said. "You have a situation in which 10 percent of the people are unemployed ... The 90 percent that are employed, many of them are scared to death that they aren't going to be employed by next week or next month or something and so the consumers are basically hunkering down. And it is frankly difficult to look around the landscape of the different sectors of the economy and say which one of these is going to bring us out of the recession."

Saying that the slump in the auto industry was the worst he has seen in his lifetime, the 71-year-old executive said using the model of recent recoveries to predict where the economy is now headed is overly optimistic.

"People are thinking ... we can rely a lot on what has happened historically," said York, who two years ago correctly predicted the present slump in auto sales. "I don't believe that. I think it's a whole new ballgame."