Although Washington just passed a $700 billion bailout package, there is still plenty of turmoil from Wall Street to Main Street, with the indication that things will get worse before they get any better. That means that a tight credit market will get even tighter, forcing auto sales to plummet even further.
2008 will likely be the worst year for new car sales in nearly two decades, but a Global Insight forecast released on Wednesday suggests that 2008 won’t hold that title for long. Global Insight predicts new cars sales in the U.S. will total 13.8 million units this year, but that figure will slip to just 13.4 million units in 2009. In comparison, U.S. buyers snatched up 16.56 million new cars in 2006, according to Automotive News.
Moreover, Global Insight has reduced its global forecast by 3.5 million units – the largest decrease in the company’s forecast history – which could spell trouble for the world’s automakers. Many automakers, including the Big 3, have used rapid sales growth in developing countries to prop up sagging sales in developed regions, but Nigel Griffiths, Global Insight group managing director of global forecasting, warns that those cash cows could virtually disappear overnight.
“It’s worse than if we saw oil at $200 a barrel on a sustained basis,” Griffiths told Automotive News. “At least with that, there was a transfer of wealth to countries like Russia that are inclined to buy automobiles.”
While 2010 has been viewed as the year for recovery for the auto industry, Global Insight doesn’t expect new car sales to return to their 2006 levels until at least 2013.
10/08, 6:53 PM
posted by:
Lariat Luxury Locomotive Liner No.3
Of course sales will continue to go down. Unless you’re wealthy why would you purchase another automobile only to see its residual value in the depths of hell by the time you make the last payment? You wouldn’t. It is better to hold-on to what you have and run it into the ground until the automobile industry addresses all the real issues of ownership—starting with cost per mile.
10/08, 11:04 PM
posted by:
beatusmongous
And in other news, LLN’s new site continues to suffer with server issues and loading problems…
10/08, 11:56 PM
posted by:
johnnycanuck
Who in the name of all things automotive is ‘Global Insight’ and why should I take any prognostications coming from said authority any more seriously than I would the guy in a trench coat hiding in the darkest bowels of a strip mall holding sweat stained copies of Watchtower? Let me offer up some ‘Global Insight’: the strong will survive and excuses are for losers.
10/09, 12:21 AM
posted by:
manarc250
Less than three months ago all the reports said Oil was heading for 200 dollars a barrel by this fall. Small cars were all the rage and trucks were out and this would be the way of the future. Experts agreed. Now oil is down in the 80’s, gas is coming down, and nothing is selling. Experts predict now that the Great Depression has returned. In the next 90 days we will have a new president, bailouts will have actually hit the market, and rates will be very very low. No one has any clue what will really happen but those with the worst news will get noticed. Good news doesnt sell so dont expect any from the media.
10/09, 6:15 AM
posted by:
sharpie
Yeah everything is down, including salary. For some, that number has gone to $0 when you lose your job (unemployment and welfare notwithstanding).
It’s still better to have a small car now than a gas guzzler, it will leave more green in your pocket. The fact is that trucks were not selling because of oil price, now nothing is selling because of credit freeze. How many % of us really pay cash up front without financing? So this really has nothing to do with oil price.
When the market becomes healthy and barrels of oil get traded as securities, you will see oil price go up again and small car then is still the answer. Bad news or not, with two months to spare in 2008, it is more likely that 2009 is going to be worse because of the tightened credit market. No financing = no new car.
10/09, 7:10 AM
posted by:
howsmydriving
“How many % of us really pay cash up front without financing?” Me.
10/09, 8:13 AM
posted by:
MercMark
Howsmydriving what do you do for a living? And are you hiring?
Because I’ll bet the percentage that buy new cars with cash (not home equity or the like) is under 5%.
10/09, 10:09 AM
posted by:
jonmiles
Only morons pay cash for cars. If you had any brains, you would have better uses for your cash. Having equity in your car is like driving around with suitcases of money in the trunk; totally pointless.
10/09, 12:55 PM
posted by:
ktulu
The Obamster will claim his throne in less than a month.
2008 will be the worst year for new car sales in nearly two decades (the popolation is a lot bigget than ‘88).
I think people who have really old cars will buy nu. But I think the # of poeple whi trade in a 5 year old Malibuor civic will drop severly.
It is better to hold-on to what you have and run it into the ground until the economy gets nbetter.
LLN’s should admit that da new site is not working & either redisign it or go back 2 da way it was b4, like CFB should do with tyhe bowl suystem.
I do not klike the Watchtower?
the Gr8 Depression could B just around da corner.
unemployment & welfare don’t make † 4 the $ a good job brings in.
not many of us really pay cash up front without financing.
paying cash 4 a car is smart. Unless you’re paying cash sted taking a 0% loan.
10/09, 1:08 PM
posted by:
Lariat Luxury Locomotive Liner No.3
GM falls to 1950 levels; European sales stung
10/09, 3:06 PM
posted by:
yarddog82abn
Old news, I read this report last week, and it’ll be more like mid after every one get’s there tax return, every year 08% of Americans use there tax return to buy a car, that’s when we’ll see sales go up again… just ask NADA, they’ll tell you…
10/09, 4:26 PM
posted by:
NipponRules
Better hope Detroit survives this. The talk won’t be recession more like depression.
10/09, 8:23 PM
posted by:
Lariat Luxury Locomotive Liner No.3
GM is such a juggernaut that a bounce back realistically might not happen. No joke.