May 17, 2008

US forecast for auto sales gloomy

Purchasing.com reported that JD Power & Associates cut its forecast for new vehicle sales in the US by 4.8% to 14.95 million a level last seen in 1994. JD Power & Associates told the Wall Street Journal that the sales market will weaken further in the second quarter before beginning a rebound.

The market research firm, while noting weaker sales in January and February, said that much of the outlook reduction was due to slumping consumer confidence and persistent economic turbulence. JD Power's prior 2008 sales forecast was 15.7 million; the last time US sales totaled less than 16 million vehicles was 1998.

Auto sales were expected to be weak this year given the economic climate and with few new models driving traffic to showrooms. In addition, delinquencies on auto loans have been increasing, and the credit crunch has tightened lending standards.