Detroit, Michigan -- JD Power and Associates today lowered its 2008 US sales forecast to 14.95 million vehicles--the lowest 2008 projection on record from a major industry observer.
Most watching the industry expect 15.5 million to 15.7 million US vehicle sales this year, down from the roughly 16.1 million vehicles sold in 2007.
The continued flow of bad economic news about tightening credit markets, the suffering housing market, declining consumer spending and record oil prices have contributed to what JD Power expects to be the lowest year for new car sales since 1994.
JD Power said it expects the annual adjusted sales rate to fall by 600,000 units during the second quarter before regaining some traction in the second half of the year, continuing into the start of 2009.
Both retail and fleet sales are expected to be lower than initially projected, according to the J.D. Power report. Retail sales were pegged at 12.3 million vehicles, pushed down from an initial 12.6 million by fewer incentives and a sagging overall economy. Retail sales totaled 12.8 million vehicles last year.
Fleet sales are expected to be down, too, after a slow start in 2008.
"Unfortunately, the current economic environment is fraught with uncertainty and risk, with the financial crisis, worsening oil prices and weak housing and stock markets steadily impacting other sectors of the economy," J.D. Power chief economist Bob Schnorbus said in the report. "As such, our revised forecast is better positioned to reflect the challenges automakers will face in the months ahead."
From Tire Business (A Crain publication)
Website of report