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DETROIT (Reuters) -- The global auto market may experience an "outright collapse" in 2009 amid growing concerns around availability of credit and general economic stress, an influential industry tracking firm said today.

J.D. Power and Associates said in a closely-watched report that credit market restructuring, fewer leasing options and declining vehicle equity are all putting added pressure on the U.S. auto market in 2009.

The agency also said auto sales in Europe, China and India are expected to slow "dramatically" next year.

The outlook -- which first began leaking out yesterday -- represents the most dire warning yet on the auto industry in the wake of the financial turmoil that has rocked consumer confidence and virtually shut the door for many consumers to finance vehicle purchases.

"While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse," said Jeff Schuster, executive director of automotive forecasting for J.D. Power.

"While mature markets are being impacted more severely than emerging markets, no country or region is completely immune to the turmoil," Schuster said.

It forecast U.S. light vehicle sales would fall to 13.2 million units in 2009 after likely settling at 13.6 million units this year, adding that a pronounced recovery is more than 18 months away. U.S. auto sales totaled 16.15 million units last year.

"Buyers are both voluntarily and involuntarily exiting the U.S. new-vehicle market," Schuster said.

The financial turmoil has dealt an additional blow to the U.S. market, which has already been bumping along at a 15-year low amid high gas prices and a housing slump.

Slowing within China's automotive market is also projected to intensify in the fourth quarter, and will likely lead to a downward revision for 2009, J.D. Power said.

It forecast auto sales in China would grow 9.7 percent this year, less than one-half of the 24.1 percent growth achieved in 2007.

Sales in Europe are expected to fall 3.1 percent in 2008, led by a 7.5 percent decline in Western Europe, it said.

PRESS RELEASE: U.S. New-Vehicle Retail Sales in 2008 Forecasted to Decrease by 2 Million Units Below 2007 Levels;

Total Light Vehicle Forecast Revised Down to 13.6 Million Units for 2008, 13.2 Million Units for 2009

New Light-Vehicle Sales in Chinese, Indian and European Markets Also Anticipated to Slow Dramatically

WESTLAKE VILLAGE, Calif.: 9 October 2008 -- As the U.S. new-vehicle retail market continues to deteriorate, new-vehicle retail sales are projected to end 2008 at 10.8 million units, which is 2 million units below 2007 sales, according to J.D. Power and Associates.

Approximately two-thirds of the decline in retail sales--which are reflective of actual consumer behavior in the new-vehicle marketplace--can be attributed to consumers delaying vehicle purchases. On average, consumers are keeping their vehicles 4 months longer in 2008 compared with 2007--up from 67 months to 71 months. The remaining one-third of the volume decline comes from reduced leasing activity. Additionally, fleet sales are expected to decline to 2.8 million units in 2008, which is well below the 3.3 million unit level achieved in 2007.

"Buyers are both voluntarily and involuntarily exiting the U.S. new-vehicle market," said Jeff Schuster, executive director of automotive forecasting for J.D. Power and Associates. "The additional decline in expected vehicle sales is a function of growing concerns around availability of credit and leasing, declines in vehicle equity and general economic stress."

The current turmoil and financial crisis adds risk to the 2008 forecast of up to 200,000 units, as it is unclear how consumers will respond in the fourth quarter.

Total U.S. Light-Vehicle[1] Market

J.D. Power and Associates forecasts total new light-vehicle sales--which includes both retail and fleet sales--to drop to 13.6 million units in 2008, registering a 16 percent decline from 16.1 million units in 2007.

Market uncertainty has also led to a downward revision of the J.D. Power and Associates 2009 U.S. light-vehicle forecast. Total new light-vehicle sales are expected to drop to 13.2 million units in 2009, with the retail sales market declining to 10.6 million units.

"Falling trade-in equity, fewer leasing options, credit market restructuring and the increased migration to used vehicles are all putting added pressure on the U.S. new-vehicle sales market in 2009," said Schuster. "Any truly pronounced recovery appears to be more than 18 months away."

China Light-Vehicle Market

Slowing within China's automotive market is projected to intensify during the fourth quarter of 2008, and will likely lead to a downward revision for 2009. Despite the slowing, light-vehicle sales--including passenger vehicle and light commercial vehicle segments--in China are expected to reach 8.9 million units in 2008, which marks an increase of 9.7 percent from 2007. However, the projected growth rate for the China automotive market in 2008 is less than one-half of the 24.1 percent growth achieved in 2007.

Indian Light-Vehicle Market

The light-vehicle sales forecast has also been reduced for the India market, down 6 percent from the original forecast of 1.9 million units to 1.8 million units for 2008. The 5.1 percent growth rate forecasted for 2008 is considerably less than the increases demonstrated in 2007 (16%) and 2006 (21%).

European Light-Vehicle Market

Light-vehicle sales in Europe are expected to fall to 21.3 million units in 2008, marking a 3.1 percent decline from sales in 2007. Within Western Europe, sales are forecasted to decline to 15.6 million--a decrease of 7.5 percent from 2007. While sales in Eastern Europe are expected to increase to 5.8 million in 2008--up 11.3 percent from 2007, growth within the region is slowing considerably.

"While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse," said Schuster. "While mature markets are being impacted more severely than emerging markets, no country or region is completely immune to the turmoil."