DETROIT -- A grim sales environment has caused another key industry forecaster to slash its U.S. vehicle sales projections.
J.D. Power and Associates is cutting its 2008 light-vehicle sales forecast from 14.2 million to 13.6 million. About 10.8 million of those vehicles are expected to be purchased by retail customers.
For 2009, J.D. Power now expects U.S. light-vehicle sales of 13.2 million, down the earlier prediction of 14.3 million. Retail sales in 2009 are now projected at 10.6 million vehicles.
Earlier today, Global Insight (USA) Inc. said U.S. light-vehicle sales probably will fall to 13.8 million units this year and then fall even more, to around 13.4 million, in 2009.
In 2007, the industry generated U.S. vehicle sales of 16.15 million, down 2.5 percent from sales of 16.56 million in 2006.
Because of the current credit crisis, the U.S. downturn is part of a global automotive recession that will see contraction in most mature markets and slower growth in what had been booming developing markets, the firm said in a Webcast.
Clearly, this is not a U.S. issue alone, said Nigel Griffiths, Global Insight group managing director of global forecasting.
We are moving from a liquidity crisis to an insolvency crisis right now. There is increasing evidence that this has affected the real economy, and as we see the automotive industry as the heart of the real economy, we are really taking a hit now, he said.
Global Insight has taken 3.5 million units out of its worldwide auto sales forecast for 2009, the largest cut the firm has made since it started forecasting sales in the 1960s, Griffiths said. That would make worldwide auto sales around 70 million in 2009, up only slightly from an estimate of about 69 million this year.
What were seeing is value destruction, as a result of the freeze in global credit, he said. Global Insight estimates that in North America and western Europe combined, the forecasted sales downturn means $110 billion less in revenue for automakers.
Its worse than if we saw oil at $200 a barrel on a sustained basis. At least with that, there was a transfer of wealth to countries like Russia that are inclined to buy automobiles, Griffiths said.