New light-vehicle sales in 2008 – originally forecast to?total 15.7 million cars and light trucks – are now expected to reach their lowest levels since 1994, dropping to 14.95 million units, according to JD Power and Associates.?
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, JD Power said.
“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 JD Power and Associates.
In addition, a weaker retail and fleet market contributed to the overall reassessment of total new-vehicle sales for 2008, according to JD Power:
- 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 – due both to general economic conditions and less-widespread incentives.
- Fleet sales have already undergone 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 contribute to the overall reassessment of new-vehicle sales for 2008,” said Bob Schnorbus, chief economist at JD 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.”
