Dealerships across the country are ready to sell cars—but the economy, not tighter credit standards, is keeping buyers away
By Kevin Krolicki
BIRMINGHAM, Michigan (Reuters) - J.D. Power and Associates, which tallies U.S. auto sales on a daily basis, sees October sales on track to hit the lowest level in 17 years with a sales rate below 12 million units.
If the October sales rate dropped below 12 million units, overall U.S. sales for 2008 could also drop below the 13.6 million units the forecasting firm has projected, a senior J.D. Power analyst said on Wednesday.
The last time U.S. light vehicle sales dropped below 12 million units was in April 1991, according U.S. Commerce Department data.
"The sad news that we've been getting month after month after month is likely to continue in October," J.D. Power economist Bob Schnorbus said in a presentation to industry executives and analysts.
"If we continue to see the weakness in the fourth quarter that we're seeing in October, we could end up having to take a few hundred thousand units out of our forecast."
U.S. auto sales have dropped to 15-year lows, battered since spring by factors ranging from the housing slump to higher gasoline prices to tighter consumer credit.
Some automakers had held out hope that the market hit bottom in August when U.S. sales were running at a 13.7 million-unit rate.
But global financial turmoil and the banking crisis that began with the collapse of Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) caused consumers to pull back from showrooms in September. The sales rate dropped to 12.5 million units.