business

DETROIT - A lackluster November is only a hint of the challenges facing the U.S. auto industry in 2008, when many automakers and analysts predict sales could drop to their lowest level in a decade.

Automakers said Monday that November sales were down 2 percent industrywide as consumer confidence was rattled by high fuel prices and trouble in the housing market. General Motors Corp. and Ford Motor Co. cut scheduled production in the first quarter and Chrysler said 2008 looks tough and it will review its production plans on a weekly basis.

"We are feeling it in our automotive business," Chrysler's vice president of sales, Darryl Jackson, said in a teleconference with media and analysts.

The November sales rate -- which shows what sales would be if they remained at the same pace for a year -- was 16.2 million vehicles, still relatively healthy compared with what automakers are forecasting for 2008. Ford's top sales analyst, George Pipas, said the company is forecasting that the rate could fall to as low as 15.5 million vehicles in the first six months of 2008. Global Insight analyst Aaron Bragman said Ford's predictions may even be too rosy.

"We'll see what happens, but thus far it's not looking like a very positive sales year next year," Bragman said.

November had its bright spots. Subcompacts like the Honda Fit, Nissan Versa and Chevrolet Aveo saw big increases, as did some crossovers. Honda Motor Co. and Nissan Motor Co. posted increases thanks to strong-selling small cars as well as redesigned sedans.

"Rising fuel prices and sliding home values delivered a one-two punch this month," Jim Lentz, president of Toyota's U.S. sales arm, said in a statement. "But the industry's not down for the count. Demand for fresh, more fuel-efficient products continues to show strength."

Overall, the industry was hurt by falling demand for trucks, which has been exacerbated by a sharp downturn in home construction. Truck and sport utility vehicle sales were down 7 percent in November, according to Autodata Corp. Sales of the Ford Ranger pickup, which is assembled in St. Paul, were down 8.9 percent to 4,938 in November and down 20.1 percent year-to-date.

GM, the biggest automaker by U.S. sales, said its November sales dropped 11 percent while Chrysler said sales fell 2 percent. Ford and Toyota Motor Corp. both reported flat sales for the month. Honda Motor Co.'s sales were up 5 percent while Nissan Motor Co.'s sales rose 6 percent.

GM said it will cut scheduled first-quarter production by 11 percent, while Ford said it would cut scheduled production by 7 percent.