Volkswagen’s American chief thinks US auto sales this year could come in under 10m units if consumer demand does not recover. His comments came as analysts at CSM Worldwide forecast sales of 9.7m units for 2009.

Volkswagen Group of America president and CEO Stefan Jacoby told Reuters that March sales and dealership traffic so far had been similar to those in January and February, and predicted overall 2009 unit volumes off 25% year on year to around 10m vehicles.

“There is no sign of recovery so far,” Jacoby said in Los Angeles. “If this trend continues it could even be under 10m.”

The news agency noted that the VW forecast was one of the most cautious yet for the world’s largest vehicle market at a time when credit remained tight, consumer confidence was weak and unemployment was rising.

US media reported this week on the rising number of homeless people living in a tent city in the California state capital, Sacramento, while NBC’s national evening news bulletin showed middle class, foreclosed former home owners, previously employed in occupations such as car sales and new home construction, now forced to live in recreational vehicles on the streets of Venice, a pricey oceanside city a short freeway ride from downtown LA. Media suggested such scenes on national television were hardly likely to inspire consumer confidence despite president Obama’s recent moves to stimulate the economy.

US auto sales in January and February averaged 9.3m units on the annualised basis tracked by analysts which, Reuters noted, represented the weakest market since 1982.

Industry-wide sales were 13.2m units in 2008 and an average of over 16m units from 1999 to 2007, the report said, noting that most analysts nonetheless still expect a second half recovery to push US sales above 10m units.

But Jacoby said the timing of such a recovery was up in the air and might not happen until the end of 2009 or in 2010.

The Volkswagen brand should be able to sustain its current 2% US market share this year, up from 1.7% in 2008, while the luxury Audi brand, which has a 0.7% share in the US, “also has opportunity to grow,” he told Reuters.

He also said the new VW manufacturing plant in Chattanooga, Tennessee, due to build a mid-size car from 2011, planned to get 80% of its supply chain from North America. If the US parts industry was disrupted, Volkswagen would buy from suppliers in Mexico.