Westlake Village, California – J.D. Power and Associates forecasts total new light-vehicle sales in the U.S. — which includes both retail and fleet sales – will drop to 13.6 million units in 2008, registering a 16 per cent decline from 16.1 million units in 2007.
U.S. new-vehicle retail sales are projected to end 2008 at 10.8 million units, which is 2 million units below 2007 sales. Approximately two-thirds of the decline in retail sales can be attributed to consumers delaying vehicle purchases. On average, American consumers are keeping their vehicles four months longer in 2008 compared with 2007 — up from 67 months to 71 months.
The remaining one-third of the volume decline comes from reduced leasing activity. Additionally, fleet sales are expected to decline to 2.8 million units in 2008, which is well below the 3.3 million unit level achieved in 2007.
“Buyers are both voluntarily and involuntarily exiting the U.S. new-vehicle market,” said Jeff Schuster, executive director of automotive forecasting for J.D. Power and Associates. “The additional decline in expected vehicle sales is a function of growing concerns around availability of credit and leasing, declines in vehicle equity and general economic stress.”
Market uncertainty has also led to a downward revision of the J.D. Power and Associates 2009 U.S. light-vehicle forecast. Total new light-vehicle sales are expected to drop to 13.2 million units in 2009, with the retail sales market declining to 10.6 million units.
“Falling trade-in equity, fewer leasing options, credit market restructuring and the increased migration to used vehicles are all putting added pressure on the U.S. new-vehicle sales market in 2009,” said Schuster. “Any truly pronounced recovery appears to be more than 18 months away.”