After a strong run, US auto sales are slowing and an increasing number of forecasts say sales could fall next year to their lowest level in nearly a decade.
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Slowing growth in the overall US economy and a slump in the housing industry, particularly in big markets such as California are factors responsible according to a report in the Walls Street Journal.
IRN, a Michigan market researcher, forecasts US 2007 sales of 16.3m light vehicles – a figure that would be the lowest since 1998 and a drop of 300,000 on this year’s expected total of 16.6m.
Some carmakers are more optimistic, the paper says, with both GM and Toyota forecasting 2007 industry sales of 16.5m units.
But analysts at Bank of America, Wachovia Corp. and Citigroup expect a sharper decline, as does investor Wilbur Ross, who has spent hundreds of millions of dollars in the past 18 months buying battered auto suppliers, the WSJ says.
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By GlobalDataMeanwhile, analysts are divided on how November’s sales are shaping up.
Jesse Toprak, chief economist for Edmunds.com, a research site for car buyers, estimates that based on preliminary data from dealers, November sales will be 6% up on last year with all of the top six manufacturers reporting gains except for Chrysler.
But AP reported that slow traffic at the website of Kelley Blue Book, which tracks auto pricing, led that firm to predict a November decline.
Chrysler’s US market woes are said by analysts to reflect an over-reliance on trucks and SUVs and products near the end of product lifecycles. The DCX unit is resorting to heavy incentives to reduce high inventories.
