U.S. Sales Predictions Continue to Slide
A brutal and cruel environment of sales in the United States has caused another key industry forecaster to curtail the projections the sale of vehicles in the U.S.
Earlier, 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.
The generation of 16.15 million U.S. vehicle sales was done in the year 2007. It was down by 2.5 percent from sales that were generated in the previous year. The exact number was 16.56 million in the year 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 we’re seeing is value destruction," as a result of the freeze in global credit, he said.
"It’s 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.
George Magliano, who is the Global Insight director of automotive industry research for North America, said U.S. conditions will go from bad to worse.
"We’re just getting pummeled," he said.
"The (U.S.) economy is in a recession and it’s going to get worse, and that’s having a big effect on consumers," Magliano said. He said it could take until 2013 for sales to recover to where they were in 2006.
"We are probably going to see (a seasonally adjusted annual selling rate of) 11.5 million or 12 million units some months, numbers that we last saw in the 1980s. We’re going to touch new lows in this business, back to the days of the 1990s and 1980s, and that’s really going to hurt our business," Magliano said. "The word we’re using is ‘brutal.’ "
