Detroit rebound stuck in low gear?

DETROIT (Reuters) –
Automakers received more bad news at the world's largest auto show on Tuesday as forecasts for a 27-year low in sales this year and auto bailout politics threw cold water on hopes for a speedy industry recovery.

Top analyst J.D. Power forecast U.S. auto sales in 2009 to fall 13 percent to about 11.4 million vehicles, a fourth straight year of declines that will further pressure the U.S. economy and could push some automakers closer to collapse.

U.S. sales in 2008 sank to 13.2 million vehicles, down from 16.2 million in 2007 and the worst result in 16 years.

"Let's maintain our sense of humor, folks," J.D. Power president Finbarr O'Neill told an industry seminar on the sidelines of the Detroit Auto Show. "We're going to need it."

The credit crunch, recession and weak consumer confidence continue to batter car buyers. Auto sales generally account for more than 10 percent of U.S. retail sales, a prime driver of economic growth. But there are hopes the Obama administration's economic stimulus package will boost consumer confidence.

O'Neill said the pace of U.S. auto sales could edge up to 10.9 million units in the first quarter of this year, compared with 10.2 million in the last quarter on 2008.

"We believe we're near the bottom, or at the bottom," he said. "The market will come back, but it won't come back to where it was before."

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