• January 20, 2009

Auto Sales Seen Declining By Analysts

why-is-our-economy-in-a-recessionOn Tuesday in Detroit, it was claimed by the auto industry analysts that the auto industry should not expect a rise in consumer demand so quickly.

The analysts have also predicted that the economical conditions of the auto industry analysts could lead to some consolidations.

Rod Lache Deutsche Bank analyst said, “The industry really needs to brace itself for an extended period of weak demand”.

He also told the Society of Automotive Analysts that a turnaround can be expected due to some encouraging signs. He further said that the turnaround would be timely.

U.S auto sales are expected to fall around 13 percent, i.e. 11.5 units in 2009, as per Rod’s analysis. The industry is also suffering from unemployment problems along with cash crisis both for the manufacturers and the customers.

Different analysts and different people have varied analysis and opinions. According to Finbarr O’Neill, president of J.D. Power and Associates, the decline in U.S auto sales in 2009 would be 11.4 million. The growth in 2010 may be 13.4 million and 14.7 million in 2011.

Forced consolidation is also expected for some companies. It will be the result of a rescue plan approved by the Bush administration, thinks O’Neill. The companies at stake include: Ford motor Co., Chrysler LLC, and General Motors Corp.

Comparatively the sales dropped down to 18 percent in 2008 than in 2007. Yet, 2009 seems to be graver and struggle requiring for the automobile industry. All this is the outcome of the financial crisis and heavy loans taken by the automobile manufacturers in struggle of surviving.

How this year will turn up for this industry is yet to be seen.

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