Dreadful as 2008 was for the U.S. automakers, 2009 is starting out even worse.

I was greatly concerned when it was reported that Americans bought only 236,000 domestically manufactured cars in November. But January’s figure of 202,000 was 14% below even the November number, and down 42% from January 2008.

Data source: Wardsauto.com

Same story with domestic light trucks– down 15% from November and 40% from January 08.

Data source: Wardsauto.com

Calculated Risk estimates that January’s sales of all light vehicles (domestics and imports) will be reported as 9.2 million units at a seasonally adjusted annual rate, the lowest level in a generation.

Source: Calculated Risk

But CR does another calculation that gives him some hope, which I’ve tried to reproduce (perhaps imperfectly) as follows. There were 247.3 million motor vehicles registered in the United States in 2007. That number seems to include vehicles such as tractors and heavy trucks, but light vehicles are by far the most important component. If we take the ratio of that total to the annual sales rate, we get

Such a ratio can’t possibly be sustained– a typical car can hardly last 27 years, and the current value is way out of line with what the number is calculated to be at other available dates. That– plus the fact that just a few years ago, Detroit was selling twice as many light vehicles as it is today– should give us reason to see the potential for a huge rebound in vehicle sales.

Source: Calculated Risk

But the question is, will GM and Ford still be around to produce them and sell them?

Technorati Tags: macroeconomics,
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