Feb. 29 (Bloomberg) -- General Motors Corp. and Ford Motor Co., the two largest U.S. automakers, probably will say sales fell again this month as consumers stung by slumping home values steered clear of showrooms.

Sales of GM, Ford and Chrysler LLC dropped by at least 14 percent from year-earlier levels, according to the average estimate of eight analysts in a Bloomberg survey. Automakers report their February results on March 3.

Declines at the three U.S. companies, which account for about half of all vehicles sold in the country, may have dragged industry sales lower for the seventh time in the last eight months. The deteriorating housing market and gasoline selling at a nine-month high helped drive the Reuters/University of Michigan consumer sentiment index to a 16-year low in February.

``The story in the month has been consumer confidence,'' said Jim Hossack, an industry analyst with AutoPacific Inc. in Tustin, California. ``When you're looking at your home value, your investments, the markets, it's easy to say, `I don't think I need a new car right now.'''

The average U.S. price of a gallon of gasoline rose 5.8 percent this month through Feb. 27 to $3.16, the highest since June 2, according to motorist group AAA. The median sales price of existing homes slid 4.6 percent from a year earlier in January, to $201,100.

The industry's annualized sales rate probably fell to 15.4 million cars and light trucks from 16.6 million a year earlier, based on a survey of 18 analysts and economists. Automakers have sold an average of 16.8 million light vehicles in the U.S. each year this decade.

Toyota's Edge

Toyota Motor Corp. and Honda Motor Co., the two biggest Japanese automakers, may have boosted sales because they rely on more fuel-efficient vehicles than the light trucks that dominate the offerings of U.S. producers.

Honda, for example, gets about 44 percent of its sales from vans, pickups and sport-utility vehicles. At Chrysler, the figure is 75 percent.

Toyota's February sales probably rose 3.5 percent from a year earlier, while Honda's increased 3.1 percent and Nissan Motor Co.'s gained 1 percent, Jesse Toprak, an Edmunds.com analyst in Santa Monica, California, said in a Feb. 26 note.

Ford's Fade

Ford may post a 12 percent decline even after it stepped up discount deals in the second half of the month, Rod Lache, a New York-based analyst with Deutsche Bank AG, said in a Feb. 26 research note.

``The economy is going to be the driver of auto sales and consumer spending,'' said George Pipas, chief sales analyst for Ford, in Dearborn, Michigan. He said demand is at the ``low end'' of the range Ford had expected, without elaborating. He and spokesmen for GM and Chrysler declined to comment on February's results.

Small and midsized cars and so-called crossover vehicles that combine traits of sedans and SUVs performed better than other models for Ford, Pipas said. Big pickups, such as the F- Series, and midsized and large SUVs had the biggest falloffs, he said. The F-Series is the nation's top-selling vehicle.

Detroit-based GM's U.S. sales also probably dropped 12 percent in February, including a 14 percent slide in light truck sales, Chris Ceraso, a Credit Suisse analyst in New York, said in a Feb. 26 note.

GM's Sweetener

GM, the biggest U.S. automaker, offered $1,000 cash bonuses on top of existing incentives for many models this month. The sweetened deals may have tempered GM's drop, Ceraso said.

GM last month bucked an industrywide sales decline with a 2.6 percent increase. Ford, Chrysler and the biggest Asian automakers all reported drops.

More-stringent lending practices after the collapse in the subprime mortgage market, along with prospects that home values will keep falling, are weighing on consumers, economists said. The Reuters/University of Michigan index of consumer sentiment for February decreased to 70.8, the lowest monthly final reading since 1992.

``We are starting to see the impact of the tightening credit situation affecting our customers,'' said James Press, president of Chrysler, in an interview today. February sales are ``below trend,'' Press said, without elaborating.

Improved sales for small crossovers at Chrysler may have failed to offset declines in large SUVs such as the Dodge Durango and Jeep Grand Cherokee, Peter Nesvold, a New York-based Bear Stearns & Co. analyst, said in a Feb. 27 note.

Chrysler may record a 12 percent sales decline this month, he said. The Auburn Hills, Michigan-based automaker has posted one monthly sales increase since being bought by Cerberus Capital Management LP in August.

Forecasts

Press said he thinks there is a chance that U.S. sales for 2008 will be lower than 15.5 million cars and light trucks. That compares with 16.1 million vehicles last year, the lowest total in almost a decade.

The average forecast among the eight analysts in the Bloomberg survey is for a 16 percent plunge at Chrysler and 14 percent drops at GM and Ford. The estimates are adjusted for one additional selling day this month than in February 2007; the figures are about 4 percentage points lower than unadjusted ones would be.

Ford fell 9 cents to $6.53 at 4 p.m. in New York Stock Exchange composite trading and has slipped 17 percent in the past 12 months. GM dropped $1.22 to $23.28 and has declined 27 percent in the past year. Toyota's American depositary receipts lost $2.02 to $108.55. They are down 19 percent since Feb. 28, 2007.

Bonds

GM's 8.375 percent note due July 2033 fell 2.5 cents to 76.5 cents on the dollar today, yielding 11.18 percent, according to Trace, the NASD's bond-price reporting service. Ford's 7.45 percent note due July 2031 rose 0.44 cent to 68.44 cents on the dollar, yielding 11.31 percent.

Credit-default swaps on GM debt rose 45 basis points today to 968 basis points, according to CMA Datavision in New York. Ford's gained 9 basis points to 1012 basis points.

The contracts are designed to protect bondholders against default. A rise in the price indicates a decline in the perception of a company's credit quality.

The following table provides estimates for car and light- truck sales in the U.S. Estimates for companies are percentage changes from February 2007. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of vehicles.

The SAAR average is based on forecasts from seven analysts and a survey of 11 economists. The analysts' estimates are based on daily selling rates. February had 25 selling days, one more than February 2007.

Analyst                   GM     Ford     Chrysler    SAAR

Robert Barry            -14%     -16%      -19%       15.5
 (Goldman Sachs)
Jesse Toprak          -13.1%   -10.4%    -10.4%       N/A
 (Edmunds.com)
Rod Lache               -22%     -12%      -20%       14.8
 (Deutsche Bank)
Jonathan Steinmetz      -14%*    -15%*     -16%*      15.0
 (Morgan Stanley)
Brian Johnson           -12%     -15%      -20%       15.4
 (Lehman Brothers)
Chris Ceraso            -12%*    -15%*     -17%*      15.6*
 (Credit Suisse)
Itay Michaeli           -12%     -10%      -15%       15.7
 (Citigroup)
Peter Nesvold           -13%     -19%      -12%       15.5
 (Bear Stearns)

Bloomberg Economists     N/A      N/A       N/A       15.6
(average estimate)

AVERAGE:                -14%   -14.1%    -16.2%       15.4

*Estimate presented as a range. Figure shown here is an average
of the range, rounded to the nearest tenth where appropriate.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: February 29, 2008 17:14 EST