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Auto execs see return of stability

February 12, 2009|Associated Press

CHICAGO — Auto industry executives are seeing signs that the nation's automobile industry is beginning to stabilize after months of free-falling sales that have threatened the viability of some of the biggest players.

Jim Farley, Ford Motor Co.'s global marketing chief, said Wednesday that seasonally adjusted retail sales demand had held steady for four months. Meanwhile, the country's used-car market has come "roaring back" since January, he said.

"That shows me that credit is available," Farley said after a Ford presentation at the Chicago Auto Show. "When we're seeing the kind of growth in the used-car market that we've seen in the last six weeks, that is a really important milestone for the bottoming out of the industry."

General Motors Corp.'s Ed Peper was even more upbeat.

"I would say we're at the bottom and stabilizing," the North American vice president for Chevrolet said. "I think it gets a little bit better each month for the rest of the year."

But on the heels of another calamitous month for the sector -- U.S. new car and truck sales fell 37% in January -- the industry's fortunes are tenuous at best. James O'Sullivan, chief executive of Mazda North America, said many people think the industry has hit bottom, but he's not so sure.

Mazda is still predicting U.S. vehicle sales in 2009 will be slightly above 11 million, with much of that coming in the second half of the year. Other automakers and analysts have been predicting industrywide sales will drop as low as 10.5 million after falling to 13.2 million last year from 16.1 million in 2007.

Analyst Erich Merkle said the industry may have finally reached a tentative plateau. "We're really at that crucial inflection point right now," he said. "And with all the money right now that's being pumped into the system . . . I think that we'll start to see some revival in our economy and we'll start to see sales on a sequential basis exceed that of the first quarter."

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