WESTLAKE VILLAGE, Calif. — Information services leader J.D. Power and Associates has announced revised new-car sales projections that indicate further deterioration in the U.S. and several key markets overseas.
"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, J.D. Power's executive director of automotive forecasting. "While mature markets are being impacted more severely than emerging markets, no country or region is completely immune to the turmoil."
The firm now predicts that in the U.S., 10.8 million new vehicles will be sold by the end of the year, two million fewer than in 2007. Total new light-vehicle sales — which includes both retail and fleet sales — is expected to drop to 13.6 million units in 2008, a 16-percent decline from 16.1 million units in 2007. Looking ahead to 2009, J.D. Power expects total new light-vehicle sales to drop again to 13.2 million units, including 10.6 million retail units.
In China, an ongoing slowdown in the 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 China's automotive market in 2008 is less than one-half of the 24.1 percent growth achieved in 2007.
The sales forecast for India has also been reduced, down 6 percent from the original forecast of 1.9 million light-vehicle 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 percent) and 2006 (21 percent).
Light-vehicle sales in Europe are expected to fall to 21.3 million units in 2008, marking a 3.1-percent decline from 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.
On the home front, J.D. Power estimates that two-thirds of the decline in retail sales can be attributed to consumers delaying vehicle purchases. On average, consumers are keeping their vehicles four months longer in 2008 than they did in 2007 — up from 67 months to 71 months. The remaining 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," Schuster said. "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."