Video: Fueling GM's growth

updated 9/24/2009 5:45:37 PM ET 2009-09-24T21:45:37

U.S. auto sales should improve modestly next year as tight credit for auto financing eases and the economy works its way out of the recession, General Motors Co.’s top executive said Thursday.

CEO Fritz Henderson said he expects the auto industry to sell 11.5 million to 12 million cars and light trucks in the U.S. next year, compared with about 10 million to 10.5 million vehicles this year.

Henderson spoke to reporters in Orlando on the last stop of a nine-city tour.

“It won’t be a great year,” said Henderson, who became CEO last spring after his predecessor was ousted by the Obama administration as the company worked through a government-led reorganization. “By any historical measure, we’d say 11½ to 12 million is a terrible year but obviously coming out of 2009, it would be welcome to see an improving trajectory.”

Henderson said inventories were in good shape and GM’s market share stands now at 19.4 percent in the United States. Inventories stood at 870,000 units at the beginning of the year but had shrunk to 370,000 units at the end of August, he said.

While he hoped that sales would begin to improve in the fourth-quarter, Henderson warned that September would be a tough month. The company’s goal is to get in shape to go public next year, he said.

“We are in line with our expectations,” he said. “It’s a tough market but there’s nothing I’ve seen that shows we’re falling short of our goals.”

The company gave its predictions for this year and next on Sept. 1 when it announced sales figures for the month of August.

Mike DiGiovanni, GM’s executive director of global market and industry analysis, said the prediction of 11.5 to 12 million in industry sales next year is based on the economy and the auto industry showing signs of improvement.

Single-family housing starts have increased for five straight months, home prices rose 0.7 percent in June and durable goods orders rose almost 5 percent in July, DiGiovanni said, but employment and consumer confidence still are concerns.

He said there are mounting signs the economy is out of recession and recovering, as is the global economy. That’s the basis for GM’s outlook for the remainder of 2009 and for 2010.

“There’s still some caution out there, but clearly, the preponderance of evidence shows the leading economic indicators are improving,” DiGiovanni said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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