UPDATE: Auto Executives See Help From Credit Mkts, Stimulus Plan

Sales managers from Ford Motor Co. (F) and Toyota Motor Corp. (TM) said the conditions in the auto sector should be brighter by the second half as improvements in the credit markets and a government stimulus package help boost consumer confidence.

In its monthly sales call Monday, Ford, the No. 3 U.S. auto maker by sales, said it is optimistic about the opportunity for growth in the "small car market" this year, though the company again warned the first quarter is going to be " bad, no matter how you look at it."

Earlier Monday, Ford reported its December U.S. light-vehicle sales fell 32% to 138,325 units, but noted its December market share rose to 14.6%, up 0.7 percentage point from a year ago - the first time since 1997 it had achieved a market share increase for three straight months.
General Motors Corp. (GM) reported a 31% drop in light-vehicle sales for the month, while Toyota Motor Corp. (TM) sales declined 37%.

In the short term, Jim Lentz, president of Toyota sales in the U.S., said he believes sales will be driven by the combined factors of low interest rates and improved consumer confidence.
Looking ahead, Lentz said there were some positive signs the economic climate could improve, including government talks about a consumer-stimulus plan, but said that this along with the steep drop in gas prices wouldn't be enough to push consumers back to SUVs and trucks.
Ford's senior economist, Emily Kolinski Morris, also said the existence of a stimulus package is a key factor to supporting the industry's second-half recovery.

GM and Chrysler LLC were granted $17.4 billion in low-interest loans from the government last month. Ford passed on accessing the loans but said it may come back at a later date if the economic situation turns worse.

Meanwhile, in GM's monthly sales call, executive director of global product planning, Michael DiGiovanni, said there was "no question the lower gas prices" were helping light truck sales. DiGiovanni said consumers of large and mid-sized SUVs were generally more resilient to having access to credit, but he said buyers of small compacts were being priced out.

Mark Laneve, GM's North America vice president of vehicle sales, service and marketing, said the company would unveil "very strong, competitive programs" in early 2009 with the focus on being competitive on a segment-to-segment basis, not using incentives to correct inventory problems.
"Hopefully 2009 will be a year that improves rather than deteriorates, even while starting at a relatively low level from the end of 2008," Laneve said.

GM received $4 billion of its total $13.4 billion payout on Dec. 31 and is scheduled to receive more money during the next two months. Its financial arm, GMAC LLC, also received $6 billion in federal aid. Chrysler received its $4 billion loan Friday.

Chrysler Chief Financial Officer Ron Kolka said the auto maker had enough money to make it through March, even when taking into consideration slowing sales.

The auto-industry loans were carved out of the government's $700 billion Troubled Asset Relief Program that originally was earmarked for ailing banks and other financial institutions.
Shares of Ford were up 1.6% to $2.62 in after-hours trading as GM's shares rose 1.1% to $3.75. Toyota's shares were down 13 cents after-hours.