California, the nation's No. 1 car market, is still compiling the final numbers on 2008 new-vehicle sales, but few in the state's auto industry are looking forward to seeing them.

No matter what the last three months bring, "it's not going to be a pretty quarter," said Peter Welch, president and chief executive of the Sacramento-based California New Car Dealers Association.

On Monday, domestic and foreign automakers announced terrible December sales figures, capping off double-digit yearlong declines compared with 2007.

California sales totals will not be known for at least a couple of weeks, but they are expected to reflect the dismal national numbers.

Projections done for the state dealers association forecast new-vehicle sales of 1,548,310 statewide in 2008, including fleet sales. That would be a 17.7 percent decline from 1,881,030 reported in 2007. In 2006, statewide new-car sales topped 2 million.

Welch sees the industry's rough road continuing through the first three quarters of 2009.

Credit for car buyers has shown signs of loosening – GMAC Financial Services, General Motors' financing arm, for instance, said last week that it will resume offering auto financing to customers with credit scores as low as 621.

But Welch said California dealers continue to struggle with their own credit problems, which make it hard for them to put new vehicles on the showroom floor.

"When dealers lose their credit, they're stuck with the products they have," he said.

Jesse Toprak, executive director of industry analysis for Edmunds.com, said that new-car sales in California last year were particularly affected by declining home values.

"If you get a map of housing values (in California), it's probably easy to look at housing declines (and car sales)," Toprak said Monday during a conference call. "It's almost a one-to-one (relationship)."

Toprak said Edmunds.com figures show that the San Francisco area and Orange County did comparatively well with car sales, while sales in the Inland Empire east of Los Angeles fell sharply as housing values plunged.

He said that pattern applied to the whole state: "It's worse as you go more inland."

Toprak said incentives offered by automakers nationwide in December indicated "desperation." Edmunds.com said the average auto manufacturer incentive in the United States was $2,902 per vehicle sold in December.

"Never before has the December average incentive been this high," Toprak said. "Automakers have been pulling out all the stops to keep motivating shoppers during these tough times."

In the meantime, consumers, the auto industry and state government officials can expect to feel the lingering effects of depressed 2008 car sales well into this year.

The state dealers association said about 125 dealerships in California closed their doors in 2008, with more than a dozen of those in the Sacramento region. More store closings are expected in the first half of 2009.

State officials said dealership closures and related auto industry woes accounted for 11 percent of the state's job losses in 2008.

The state Board of Equalization has a backlog of about one year in compiling taxable sales of new cars. But if you take BOE's taxable sales total of about $54 billion statewide in 2007 and apply the dealers association's projection of a 17.7 percent decline in new-car sales in 2008, the taxable sales figure for 2008 would come in close to $44.5 billion. The state taxes car sales at 7.5 percent, not including the 0.65 percent vehicle license fee.

Generally, new-car sales account for about 9 percent of the state's taxable transactions compiled by BOE.

Call The Bee's Mark Glover, (916) 321-1184.