US new car sales results for January, due to start trickling out from local automakers and importers later today, are expected to drop to a 27-year low. according to industry analysts there.

Auto executives and major dealers already have warned that sales for January showed no sign of improvement from the bleak trend that took hold in the fourth quarter of 2008, Reuters reported on Tuesday.

US auto sales, which typically account for about 20% of all retail sales, dropped by 18% in 2008 to a 16-year low of 13.2m units while the median forecast of 36 economists surveyed for Reuters was for an annualised sales rate of 10.2m cars and light trucks for January 2009, worse than the 10.3m unit sales rate hit in December despite large discounts by automakers and government moves intended to ease credit.

Analysts and auto executives told the news agency that sales of new vehicle to US car rental agencies took a major hit in January, reflecting the growing pressure on those companies to cut costs by keeping vehicles in their fleets longer.

"Retail (showroom) sales appear to be marginally improving, or at least stabilising," Barclay's Capital analyst Brian Johnson was quoted as saying in a note for clients last Friday. "But fleet sales are showing some very sharp declines, both due to the fragile financial state that rental companies are in, and the fact that assembly plants have been idled during much of the past five to six weeks."

Johnson has forecast January US auto sales close to 10.2m units, Reuters reported, saying that expected declines at Toyota and Honda of between 25% and 32% year on year showed the pressure on the market.

Unlike GM and Chrysler, Toyota and Honda have not been dogged by consumer concern about their survival, Johnson said in his noted.

The weak performance by the industry's stronger players points to the pressure on consumer confidence, he said, adding: "The story of the industry continues to be a widespread reluctance to purchase durable goods at this point," Johnson said.

This month's new vehicle sales (including fleet) in the United States were expected to be down 30.1% year on year to 730,000 units, analysts at Edmunds.com forecast last week.

Adjusted for selling days, Edmunds forecast sales down 32.8% year on year or 18.1% down on December's count.

"Our research indicates that retail sales are pretty much flat compared with December," said Edmunds' industry analysis head Jesse Toprak.

"However, automakers' decision to cut fleet sales and make other production cuts will cause a large sales decline to be recorded on the books."

Edmunds.com forecast Chrysler's January sales would drop 48% from a year earlier and predicted a 38% drop for GM and 30% fall for Ford.

Edmunds analyst David Thompkins told Reuters that, although there was growing demand to replace older vehicles, many Americans would turn to cheaper used vehicles when they begin shopping again.

IHS Global Insight has forecast that overall sales would drop to 9.7m units on an annualised basis in January - which would be the lowest monthly sales tally since 1982.

"There will be no 'Obama effect' [a reference to the new president's efforts to stimulate the US economy] on light vehicle sales just yet," the industry tracking service was quoted as saying in a note issued on Friday.

"The winter freeze will continue in the light vehicle sales market in January."