Auto analysts are predicting that the lackluster end of 2007 will carry into 2008. The typical round of Holiday incentives failed to lure consumers into showrooms and resulted in a December sales decrease of 4%. While yet to be officially tallied, it is expected that 2007 auto sales slipped to about 16.1 million, the lowest volume since 1998.
During the past year, auto sales have been on the decline due to rising fuel costs, a slumping housing market and a general weakening of the economy. “A lot of these economic issues are continuing to put more pressures on the economy and the consumer as time goes on,” Erich Merkle of IRN Inc. told the Detroit Free Press. In 2008, “most of the weakness is going to come in the first half or perhaps the first nine months of the year. So there is not going to be much to write home about.”
Of the six leading automakers, it is predicted that the domestic automakers will wind up with the worst December results. Bear Stearns analyst Peter Nesvold says that Ford could see as much as a 14% decline in December sales, due largely to weak sales of the Ford Taurus and Taurus X and the Mercury Sable. However, Ford’s F150 pickup will remain as the best selling truck in the U.S.
Nesvold predicts that General Motors’ December sales could slip by 14%, although a 30% reduction in fleet sales accounts for most of the lost sales. Despite the slip, Chevrolet is posed to be the best selling brand of the year.
Chrysler will also see a double-digit decline in December, mostly due to a strong December 2006. Its newly redesigned minivans are expected to bolster December sales, although the Dodge Caravan will likely be unseated as the best selling minivan by the Honda Odyssey .
However, Jesse Toprak, chief economist for the auto information Web site Edmunds.com, predicts that Japanese marques will fair much better in the month of December. He predicts that Toyota ’s sales will fall 3% with Honda ’s declining by about 1%. Nissan sales are expected to stay flat, thanks to strong sales of the Rouge crossover and the Versa subcompact.
“Given the current economic challenges and the uncertainty associated with the upcoming presidential election, we do not anticipate that 2008 will be any more robust for the car business,” Toprak told the Detroit Free Press.
