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J.D. Power issues bleak U.S. sales outlook

From Automotive News:

J.D. Power issues bleak U.S. sales outlook
Ryan Beene
Automotive News
March 18, 2008 - 3:33 pm ET

DETROIT -- J.D. Power and Associates today lowered its 2008 U.S. sales forecast to 14.95 million vehicles -- the lowest 2008 projection on record from a major industry observer.

Most watching the industry expect 15.5 million to 15.7 million U.S. vehicle sales this year, down from the roughly 16.1 million vehicles sold in 2007.
The continued flow of bad economic news about tightening credit markets, the suffering housing market, declining consumer spending and record oil prices have contributed to what J.D. Power expects to be the lowest year for new-car sales since 1994.

" While the automotive industry's slow performance in January and February certainly contributes to the anticipated drop in new-vehicle sales, declining consumer confidence and spending, as well as turbulent financial and economic market conditions, are primarily driving the decline," Jeff Schuster,
J.D. Power executive director of automotive forecasting, said in a statement.

A rocky road ahead Projections for 2008 U.S. vehicles sales have been declining since December. Here is a list of those projections, from Automotive

News reports:
Who When (AN REPORT) How many (millions)
Morgan Stanley 12/3/2007 15.8
Casesa Strategic Partners 12/3/2007 15.7
Global Insight 12/3/2007 15.7
CSM Worldwide 12/3/2007 15.5-15.8
Ellen Hughes-Cromick, Ford chief economist 1/21/2008 15.7
Ted Chu, GM lead economist 1/21/2008 16.0 ballpark
Paul Trab, Chrysler LLC senior economist 1/21/2008 15.0-16.0
Paul Taylor, NADA chief economist 2/18/2008 15.7
Morgan Stanley 3/13/2008 15.4
J.D. Power 3/18/2008 14.95 Source: Automotive News archives

J.D. Power said it expects the annual adjusted sales rate to fall by 600,000 units during the second quarter before regaining some traction in the second half of the year, continuing into the start of 2009.

Both retail and fleet sales are expected to be lower than initially projected, according to the J.D. Power report. Retail sales were pegged at 12.3 million vehicles, pushed down from an initial 12.6 million by fewer incentives and a sagging overall economy. Retail sales totaled 12.8 million vehicles last year.

Fleet sales are expected to be down, too, after a slow start in 2008.

" Unfortunately, the current economic environment is fraught with uncertainty and risk, with the financial crisis, worsening oil prices and weak housing and stock markets steadily impacting other sectors of the economy," J.D. Power chief economist Bob Schnorbus said in today's report. " As such, our revised forecast is better positioned to reflect the challenges automakers will face in the months ahead."

J.D. Power's downward revision of its sales forecast comes after a similar move by Morgan Stanley last week. The Wall Street investment bank released a report Thursday, March 13, cutting its 2008 new-vehicle sales projection to 15.4 million units from 15.8 million.
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