Automotive sales will drop from 2007 levels
But interest rate cuts could stop total collapse
By Tom Stundza -- Purchasing, 2/13/2008 3:04:00 PM
Paul Taylor, chief economist of the National Automobile Dealers Association, believes the Federal Reserve's aggressive rate cuts won’t boost U.S. automotive sales, which he forecasts to 15.7 million cars and trucks in 2008. That’s down from the 16.1 million vehicles sold in 2007 but better than an earlier forecast of 15.5 million units. However, research firm IRN and Global Insight have both predicted sales of about 15.5 million. PricewaterhouseCoopers of New York has predicted 2008 U.S. auto sales at 15.6 million but cautions that sales could dip below 15 million if the nation goes into a recession.
"We have a challenging year ahead of us," Taylor tells the auto dealer association’s annual meeting. And sales are off to a rough start this year with January sales of 1.04 million vehicles translating into an annual seasonally adjusted selling rate of 15.24 million cars and trucks.
Still, the Associated Press reports from the recent Chicago Auto Show that General Motors and Ford Motor executives are optimistic about a surge in second-half automotive buying. General Motors Corp.'s North America President Troy Clarke told reporters: “You could make a case that the second half of the year could be significantly better.” Ford Americas President Mark Fields also bullishly sees sales improvement in the second half, noting that interest rate cuts could also help stimulate sales.
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