consumers to return new cars if they lose their jobs

"We see little to indicate a near-termimprovement in either financial market conditions or economicactivity." nN05383052 On a full-year basis, U.S. auto sales were on track to end2008 at their lowest level since 1992 at about 13.5 millionvehicles, based on preliminary sales figures That was downfrom 16.2 million in 2007. That 3 million-unit plunge in sales was the steepest for theindustry since 1974, when the U.S. economy was still reelingfrom the impact of the first oil shock U.S.

automakers expect a continued decline in 2009 but heldout hope that the pace of the losses would ease. GM said it expected to keep its 2009 sales forecastunchanged at between 10.5 million and 12 million vehicles, thecontinued slump it had forecast last month in seeking a bailoutfrom Congress. "We're optimistic that it's a year that will at least gradually improve and not see the massive deterioration that wesaw in the third and fourth quarter of 2008," GM sales chiefMark LaNeve said in a conference call with reporters andanalysts. nN05407066 Shares of Ford rose almost 5 percent while GM gained 1.6percent on Monday. Shares of both automakers have gained sincelate December on signs that the U.S. government was pushingahead with a broad rescue for the industry.

DISCOUNTS CLIMB WITH INVENTORIES As sales-adjusted inventory levels climbed in the fourthquarter, major automakers have been forced to discount moreheavily in a bid to stock from dealer lots. Auto-tracking Web site Edmunds said December auto incentivelevels were the highest ever for the month. Ford cited industrydata showing that the average discount on a new vehicle hadrisen from about $3,000 in October to about $3,600 last month Hyundai Motor Co (005380.KS), which made its mark in theU.S. market as a lower-cost alternative to Japanese brands,rolled out an unusual marketing campaign that would allow U.S.consumers to return new cars if they lose their jobs. "In this uncertain economy, we are looking for ways toreassure shoppers that Hyundai still represents the best valuein the auto industry," said John Krafcik, Hyundai MotorAmerica's acting chief executive. nN05382780Toyota, which has forecast its first-ever annual operatingloss, said it would offer new cash-back discounts to U.S.