Auto Sales In 2008 Are Going To Be Just Awful

Implications: U.S. sales of cars and light duty trucks are expected to drop sharply in 2008, hitting their lowest level since 1994.

Analysis: J.D. Power and Associates on Tuesday lowered its 2008 U.S. sales forecast to 14.95 million vehicles - the lowest 2008 projection on record from a major industry observer.

Most watching the industry expect 15.5 million to 15.7 million U.S. vehicle sales this year, down from the roughly 16.1 million vehicles sold in 2007.

The continued flow of bad economic news about tightening credit markets, the suffering housing market, declining consumer spending and record oil prices have contributed to what J.D. Powers expects to be the lowest year for new car sales since 1994.

The company said it expects the annual adjusted sales rate to fall by 600,000 units during the second quarter before regaining some traction in the second half of the year, continuing into the start of 2009.

                          A rocky road ahead
 
Projections for 2008 U.S. vehicles sales have been declining since December. Here is a list of those projections, from Automotive News reports:
 
Who                           When (AN REPORT)            How many (Mil)
 
Morgan Stanley                    12/3/2007                                       15.8 Casesa Strategic Partners     12/3/2007                                       15.7 Global Insight                       12/3/2007                                       15.7 CSM Worldwide                    12/3/2007                                15.5-15.8 Ford chief economist             1/21/2008                                       15.7 GM lead economist               1/21/2008                           16.0 ballpark
Chrysler senior economist     1/21/2008                                15.0-16.0 NADA chief economist           2/18/2008                                       15.7 Morgan Stanley                    3/13/2008                                       15.4 J.D. Power                           3/18/2008                                     14.95

Source: Automotive News archives

Both retail and fleet sales are expected to be lower than initally projected. Retail sales were pegged at 12.3 million vehicles, pushed down from an initial 12. 6 million by fewer incentives and a sagging overall economy. Retail sales totaled 12.8 million last year.