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.
