Summary
Auto industry analysts have been trying all year to come up with a prediction of how many vehicles will be sold in the U.S. this year. In the beginning of the year some thought we would hit the same number as 2007, 16.2 million. Now with just two weeks to go in 2007, the final number is looking very ugly, around 13.2 million.
Analysis
Since the end of 2007 auto industry analysts have been having nightmares trying to come up with an estimate of how many vehicles would be sold in the U.S. this year.
Most initial estimates had sales at around the same as 2007, 16.2 million. As each month produced worse results than the previous month, the experts at J.D. Power, R.L. Polk, Edmunds, etc scrambled to revise their forecasts. We went from 16 million to 15, 14.5, 14, etc.
However, the biggest slump happened in the last four months, with monthly sales under 1 million. Total light vehicle sales will come in at around 870,000 this month, down 37% from December 2007. Now that's bad! That puts the SAAR at 10 million vehicles in December, down from 10.3 million in November. Now that's even worse! The annual selling rate had not fallen to 10 million since October 1982.
Meaning: The worst is yet to come. If the non-buying trend continues along with the current tight credit policies we could see only 10 million units sold in 2009.
China expected to sell 10 million units in 2008, a target they will not hit. However, with a little luck and an economic stimulus package that works, China could make their target next year, and become the worlds largest auto market.
P.S. according to the China Association of Automobile Manufacturers (CAAM), Chinese auto makers produced about 8.7 million vehicles and sold more than 8.6 million from January to November. They will close out the year at around 9.5 million.
