Canada's automakers will post huge losses for the third year in a row in 2008, according to a new report released Tuesday by the Conference Board of Canada.

The Ottawa-based business think-tank said Canadian car manufacturers will lose $1.7 billion this year, narrowing to $1.4 billion next year, as a result of crashing consumer confidence and plummeting auto sales.

"Canadian auto manufacturers remain caught in a maelstrom of cyclical and structural industry changes, a trend that is unlikely to improve until at least 2010," said Sabrina Browarski, an economist with the conference board.

Job losses

That economic storm could translate into another 15,000 job cuts in the assembly sector in 2009, Browarski said. And other spinoffs industries will chop their workforces as less manufacturing translates into lower demand for parts and car services.

In addition, the country's auto producers have been slashing prices and offering potential buyers a blizzard of incentives, all of which largely failed to get consumers into the showrooms. Thus, revenue per-vehicle has fallen without a compensating rise in the total number of sales, the board noted.

This year, the organization expects that new vehicle sales will drop by more than 15 per cent. Next year will see the Canadian sector endure another billion dollars of red ink, a 16-year low in new vehicle sales and, after an expected 3.5 per cent cut in 2009, an eight-year bottom in auto production.

The conference board said Canada's car industry has been crippled by a dollar that is highly priced in historical terms, dropping consumer sentiment and financing difficulties in the wake of the ongoing global economic crisis.

The board's index of consumer confidence fell in November to levels consistent with buyer sentiment during the recessions of 1982.

As a sign of how quickly the fortunes of North America's automakers have fallen, back in the spring the conference board projected a small profit of $155 million in 2008 for the sector.

with files from Canadian Press