GM Downgrades 2008 Industry Vehicle Sales Forecast
April 30, 2008

Previously more optimistic than other automakers, General Motors Wednesday announced it had downgraded its U.S. vehicle sales forecast for 2008. GM now expects industry sales to come at in the mid to high 15 million units range, instead of the low 16 million. GM had predicted some upturn in the second half.

GM President Fritz Henderson, in a conference call with analysts and media on first-quarter earnings Wednesday, said April sales, which will be reported Thursday, look like the weak sales throughout the first quarter.

Managing that business, Henderson expanded, includes maintaining discipline GM has shown in the recent past of keeping supply in line with demand by cutting production as it did this week with large pickup trucks and SUVs and restraining incentives.

It also means getting back to normal business with a hoped-for settlement to the strike against supplier American Axle and Manufacturing Holdings Inc. The strike has forced the closure or cutback in production at about 30 GM plants

"We see no slackening in regard sales in emerging markets," he said. "But we do believe we'll have to manage the business in America in a more challenging environment."

Henderson said GM sees some positive signs including the automaker seeing the financial impact of employee buyouts being enjoyed in the second half and the impact of the federal government's economic stimulus package.

GM-specific positives Henderson see is the launch of the Chevrolet Traverse in the U.S. this summer, the Opel Insignia in Europe later this year and additional production capacity coming on line in Mexico, Russia and India this year.

Edmunds.com forecasts 2008 industry sales in the U.S. at 15.5 million units, down from its previous prediction of 15.9 million.

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