US auto industry woes will continue next year and probably get worse, according to analysts Global Insight.
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It recently revised its forecast for 2008 and 2009 to reflect the latest trends in the market.
Forecasters George Magliano and Rebecca Lindland said in a recent report: “Global Insight has raised its crude oil price profile significantly this month. We now expect oil prices to remain high, averaging US$146 per barrel in 2009, compared with an average of $132 in 2008.
“This higher oil price profile will take our sales forecast for 2008 down to 14.4m units and the 2009 estimate down to 14.2m [compared with 14.7m units previously expected for both years].”
They added: “Consumer confidence has fallen to recessionary levels, and the auto-related measures of sentiment are even worse. With gasoline prices soaring, it is almost impossible to get the consumer to respond to incentives.
“The problem is compounded on the truck side by plummeting trade-in prices for sport utilities and pick-ups [if the dealer will take them back at all].”
“With such headwinds blowing only halfway through 2008, the forecast looks to be more difficult times ahead,” analyst Aaron Bragman said in a research note on Wednesday after the June US sales results were announced.
He said that the US auto industry had its worst month in 15 years in June, with sales plummeting “an astonishing” 18.3% to just 1.19m units for the month.
This pushed the first half total down 10.1% to 7.414m.
Although all automakers have predicted that the seasonally adjusted annual selling rate (SAAR) would be about 14m units; Global Insight has calculated the total at 13.6m units in total.
“This is considerably lower than most analysts’ expectations at the beginning of the month, including GI’s, which was in the mid 14m range,” Bragman said.
