It’s no secret that 2008 is shaping up to be one of the worst years for new car sales in recent history, but it’s difficult to discern just how bad things are without some historical background. Because of this, iSuppli has released a new study that gives the situation a proper perspective.
According to iSuppli, new car sales will total 13.3 million units in 2008, a decrease of 17.7 percent from 2007’s 16.2 million sales. That 17.7 percent drop would mark the third sharpest sales decline in the last 50 years, trailing only 1980’s 19.1 percent decline and 1974’s 20.8 percent drop off. Both of those years were recessions.
Although 1974 saw the sharpest drop off in year-to-year new car sales, sales actually recovered fairly quickly, with the first increase in sales coming only two years later.
The recession of 1980 didn’t result in a sales decline quite as steep as the one seen in 1974, but its effects were much longer lasting. New car sales continued to decline for four years before the industry showed any signs of recovery. This same kind of trend is being seen today, with 2008 marking the third and 2009 expected to be the fourth year of consecutive sales declines.
But to really understand how bad the auto market in the U.S. is, you have to break it down to per capita sales. Once the figures are converted, it quickly becomes apparent that the current sales slump is far worse than those seen in 1974 and 1980. Per capita sales in the U.S. will fall to just 37.6 cars sold per 1,000 people in 2008, marking the lowest per capita sales rate since 1961. Moreover, October 2008 tallied the lowest per capita sales of any month since World War II.
Most automakers have been relying on global sales to buoy poor sales in the U.S. and Western Europe, but global sales are expected to decline by 6.3 percent in 2008 and another 6.5 percent in 2009.
Because of these staggering figures, the next few months will be critical to most automakers’ survival – particularly the Big Three. If new car sales fail to stabilize or show any sign of improvement, it’s quite possible that we could see more than a few consolidations.
