New-Car Sales Expected to Fall By 2 Million Units

J.D. Power is predicting that new-car sales will fall by 2 million units in 2008, down to 13.6 million units, and stay in that range for 2009, at an estimated 13.2 million units. That’s a 16% drop, and the company says another 200,000 could be lost if things get worse in the fourth quarter of 2008.

We’re knocking on any piece of wood we can find in the Cars.com offices that the economy can’t possibly get worse in the fourth quarter. With a strong lineup of 2009 and 2010 models on the horizon that leans more to fuel-efficient vehicles than slow-selling SUVs, we could see higher sales than projected because the average car price will most likely be lower.

The U.S. isn’t the only nation to see sales fall, as the Chinese, Indian and European markets all got lower projections as well. 

Comments

the volt might come out tomorrow and be for 20k and many still wouldn't be able to buy it even if it gives them 400 miles on a charge. people don't have credit and nobody wants to lend to those that do. i won't buy unless my truck is totalled or needs 10k worth of repairs. and i have good credit. over 730 last time i checked.

just bought new tires and got 55k miles warranty. don't think i will see the 55k, but will have the truck for about two years unless i can get the volt or brand-new caddy for 20k.

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Credit will be a huge problem. Banks and other lenders are, correctly, tightening up.

Even the in-house financing units of the auto makers should be effected as their cost of money goes up.

All of that should spell less success for the more expensive cars, but people might not opt to buy that smaller, less accessorized vehicle and hold on to the car they have - with all the bells and whistles. Consumers are quite resistant to "downgrading".

Another problem will come from the fact that people will not, or cannot, use second mortgages to buy cars they could otherwise not afford.

The above indicate that car companies might not just sell fewer cars, but also see less revenue as consumers opt for less expensive cars. That means lower profits for car makers.

Less revenue does not always translate into less profit. You must have been educated in the public school system.