Auto sales are down. This has been the month after month news item for most auto manufacturers. With the exception of a few bright spots, the entire auto industry is in a slump. With high gas prices, many companies are offering clearance price on what are now considered gas guzzling trucks and SUV's. Four cylinder cars are now the hot commodity, and even many of these simply are not selling at the needed pace.

For satellite radio sector watchers, the slumping sales in the OEM channel is an undertone that, coupled with the lack of a merger decision, makes many investors have pause in the sector. In an environment where good news seems to always be followed with a pause and then bad news, it is hard for the satellite radio equities to see any momentum.

The chart below outlines auto sales, SDARS partners and estimated installation rates. We caution readers that this is merely a guide, and not representative of actual installations. Readers who seek more detail can refer to previous months and/or years sales here at Sirius Buzz to draw better comparisons.

Many analysts started off 2008 seeing the OEM channel as a driver for satellite radio subscriptions. Most used some base assumptions projecting subscriber numbers based on a certain level of car sales happening combined with a bigger ramp-up in the rate at which SDARS receivers are installed. Now with half of 2008 gone, and car sales still slumping, there could well be some adjustments in the models that analysts use.

Historically, the take rate for SDARS on OEM installations has hovered in the 50% range. This metric has remained virtually unchanged during the sales slump of cars. For SDARS, that represents a small silver lining, but at the end of the day, installations need to happen, and cars need to sell.

I project that upon a merger decision, additional guidance will be given by Sirius and XM. Until that time, we need to rely on the assumptions of analysts, or our own research into the sector to determine what the subscriber picture will look like at the end of the year.

Position - Long Sirius, XM. No Position OEM's.