New-vehicle sales in 2008 are expected to reach their lowest levels since 1994, dropping to 14.95 million cars and light trucks, according to J.D. Power and Associates. New-vehicle sales for 2008 were originally forecast at 15.7 million units.
"While the automotive industry's slow performance in January and February certainly contributes to the anticipated drop in new-vehicle sales, declining consumer confidence and spending, as well as turbulent financial and economic market conditions, are primarily driving the decline," said Jeff Schuster, executive director of automotive forecasting for J.D. Power and Associates.
Additionally, weaker retail and fleet markets contributed to the overall reassessment of total new-vehicle sales for 2008. Retail sales were initially forecast at 12.6 million units, but are now expected to decline to 12.3 million, down from 12.8 million in 2007. General economic conditions, coupled with less widespread incentives, are driving the retail decline. Fleet sales have already experienced a weaker-than-expected start in 2008, but a further decline is anticipated as daily rental sales are not projected to return to pre-2007 levels.
"The downturn in retail sales, coupled with declines across the fleet market, also contributes to the overall reassessment of new-vehicle sales for 2008," said Bob Schnorbus, chief economist at J.D. Power and Associates. "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. As such, our revised forecast is better positioned to reflect the challenges automakers will face in the months ahead."
In the first quarter of 2008, sales are expected to average 15.2 million units, with sales in the second quarter falling to approximately 14.8 million units before beginning a slow rebound during the second half of the year and into 2009.
Source: J.D. Power and Associates March 18 /PRNewswire