Write down the latest U.S. auto sales forecasts with something that's easy to erase, like a grease pencil, because industry analysts are scrambling to cut their auto sales forecasts as fast as you can write them down.
For instance, J.D. Power and Associates on Oct. 8 cut its forecast for the second time in a week, to only 13.6 million light vehicles in 2008, and a measly 13.2 million in 2009. To put that in perspective, U.S. light-vehicle sales in 2007 were about 16.1 million, and the record was 17.4 million in 2000.
Earlier in the day, Global Insight caused a stir in a webcast (registration required for a replay) that included its U.S. light-vehicle forecast of 13.8 million for 2008, and 13.4 million in 2009. That sounded pretty bad, until the J.D. Power forecast came out.
The next logical step will be to cut forecasts for 2010, because the gap between the now-lower 2009 forecasts and earlier forecasts of a 2010 recovery has grown to the point where a substantial sales recovery in 2010 would require some sort of miracle -- and the U.S. auto industry seems to be fresh out of miracles.
It's getting to be repetitious, but the U.S. auto industry is getting hammered by wave after wave of bad news without being able to catch its breath: first gas prices; then the stampede to smaller cars, which are more likely to be import-brand; and now the credit crisis, stock market volatility, and a growing chorus of voices predicting a U.S. recession.
"Car buyers are caught like rabbits in the headlights," said Nigel Griffiths, group managing director, global forecasting for Global Insight (USA) Inc., which is based in Lexington, Mass.
"It's easy based on that sort of language to overreact. But how people make decisions about buying cars is changing virtually daily right now," he said.
Many people have decided the safest thing to do under the circumstances is just to stay home. "The bottom line was, a lot of people just stayed out of showrooms," said George Magliano, Global Insight director, automotive industry research, North America.
"People have just deserted the showroom, as the stock market has fallen out of bed," he said.