Double-digit car sale falls herald bleak 2009

By Helen Massy-Beresford

PARIS (Reuters) - France and Japan posted steep falls in December car sales on Monday, adding to a swathe of depressing data from an industry bearing the brunt of wrecked consumer confidence, as analysts and a trade body forecast further pain in 2009.

A 15.8 percent decline in France and a record 22 percent drop in Japan chimed in with December falls announced last week in Italy, Spain and Belgium, extending the downturn of recent months as the fragile economic environment continued to impact both lenders offering credit for new vehicles and would-be buyers.

"I expect we'll continue to see double-digit declines (in sales) across Europe for the first part of 2009," said Credit Suisse analyst Stuart Pearson. "But that won't really surprise people."

Automakers across the globe are struggling to reduce stocks of unsold vehicles, and many have resorted to temporary site closures, job cuts and extended holidays for workers.

Citigroup analysts said that, in Europe, they were basing 2009 forecasts on a further 15 percent decline in sales. "No earnings/no dividend is likely to be a common autos tune in 2009," they said in a research note.

In Japan, industry association JADA said the country's worst-ever December for auto sales excluding 660cc minivehicles, which left 2009 unit sales at 5.08 million, suggested already grim predictions for 2009 would have to be revised.

Last month, JAMA had projected a fall in demand for new automobiles to 4.86 million vehicles this year -- the first drop below 5 million in 31 years - but even that projection had not taken into account the extent of the slide in December, association Director Takeshi Fushimi said.

"We never expected sales would fall this badly," he told reporters.