U.S. light vehicle sales industrywide were likely to slip below 16 million vehicles next year as the housing market continues to slow through 2008, billionaire investor Wilbur Ross said on Sunday.

This would mark the second consecutive annual decline in U.S. auto sales and the lowest tally since 1998.

Domestic automotive sales for '08 are likely to be a few hundred thousand cars lower than '07, largely because we think the consumer is pretty well tapped out based in part on the deterioration of the housing market, Ross told the Reuters Autos Summit in Detroit. A sort of poverty effect from house prices going down.

On an industry-wide basis, the U.S. market appears to be headed for a 2007 sales tally of about 16 million vehicles, marking a roughly 3 percent decline from 16.5 million in 2006.

Ross specializes in restructuring troubled businesses and has assembled an auto parts empire in recent years through acquisitions. The Ross-led International Automotive Components Group has recently acquired various units of liquidated bankrupt auto parts maker Collins & Aikman.

As for declining auto sales, the Detroit-based carmakers are widely seen as having the most at stake because of the pressure they face to reverse compounding losses.

But despite the shrinking market, Ross does not see any increase in discounting of cars by the manufacturers, especially because of the capacity reduction steps taken by Detroit's three major automakers.

I think you're going to see less discounting in general, Ross said. Now that they have a little better control of the factories and now that the factories are a little more right sized, I would think you're going to see a somewhat less pressure to do these super discounts.

(Reporting by Poornima Gupta; Editing by Braden Reddall)