Morning Macro: More Bad News for Auto Makers

Auto makers continue to be the most visible victims of the economic downturn, as they get hit with the one-two punch of slowing consumer spending and higher energy prices. Edmunds.com, the online resource for automotive consumer information projects, became the latest to cut its 2008 U.S. auto-sales forecast as it also projected another weak month for June, which besides the weak sales environment will be impacted by three fewer selling days.

Edmunds.com now sees sales for the year coming in around 14.9 million, down from its prior view of 15.5 million. “There is still uncertainty in the marketplace, and we have no reason to believe gas prices will decrease in the short term,” observed Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com.

Edmunds.com sees just one auto maker – Honda Motor Co. — reporting higher sales. It is projected to post a 4% increase. Conversely, Chrysler LLC is seen being the weakest performer with a 31% drop. Those figures are expected to put Honda’s sales above Chrysler’s for the second-straight month. –Shirleen Dorman