August 29, 2007 (LPAC) -- While Edmunds.com is reporting today that the U.S. auto sales decline has gotten deeper in August, with sales down about 10% from one year ago, a big auto dealer group is making a dire forecast about total car sales in America for the year.

AutoNation, the biggest U.S. auto dealer group, forecast that total car and light truck sales in 2007 would not exceed 16 million--the level of 1995-96 when the country had 30 million fewer people. AutoNation is, as a result, cutting back on its purchases from all automakers, to try to keep its inventory down. Below 16 million sales, some auto analysts estimate, one of the Big Three automakers would have to go into formal bankruptcy.

AutoNation issued, with its forecast, a call for the Federal Reserve to lower interest rates drastically and immediately, believing this would keep sales from plunging further. Chief Executive Mike Jackson said Aug. 28 the U.S. economy will go into "recession" unless Fed cuts rates "aggressively." Jackson told Reuters, "They have to recognize that they are bringing into play a recession for this economy. They need to begin to cut rates, not just once but several times."

But Edmunds.com says that Americans are, in fact, turning back to used cars, as in the Depression and the post-WWII years. Interest in buying the clunkers is up 24%, while demand for all but subcompact new cars is falling. Other auto analysts, CNW Financial Corp., published a survey finding that 18% of Americans who want to buy a new car, have put off or cancelled the purchase due to economic conditions.

U.S. sales were down about 3% from 2006 up through June, but fell 9% year-to-year in July, and perhaps 10% in August as the mortgage meltdown and financial crisis hit hard.