J.D. Power warns of automotive market collapse in 2009

[Philly]

J.D. Power and Associates, the influential industry tracking firm, warned that the global auto market may "outright collapse" due to the lack of available credit and the general global economic conditions in 2009. According to the company, credit market restructuring, fewer leasing options, and declining owner equity are adding additional stress to an already burdened market. Don't turn to the automotive markets in China, Europe, or India either -- they are expected to slow next year as well. Much of the domestic sales decline is attributed to consumers delaying vehicle purchases (their studies indicate people are keeping their vehicles four months longer in 2008, compared to 2007). Other contributing factors are the drop in leasing activity, and the loss of fleet sales (down to 2.8 million from 3.3 million last year). While the automotive sales decline over the summer made this a buyer's market, willing consumers who venture into showrooms today are finding dealerships eager to sell, but banks aversive about lending.

Linky

We've already seen the housing market crash, and financial institutions are in some pretty big trouble. Combined with the September sales report and the Big-3 running out of money, I don't think I'd rule this one out.

 

[Tornado]

Just in time for the Chevrolet Camaro!

 

[Omnis]

Well if you think about the problem lending areas, they are for houses, cars, and student loans.

Which means that housing, cars, and tuition are due for a correction and hopefully all three will correct swiftly.

 

[YSSMAN]

The Fed won't let GM or Ford fail, but Chrysler is a whole different ball-game. Either way, we're likely to see this as a catalyst for drastic changes in the way in which these companies are run, what products they produce, and at what price they reach the customer. At this point in time, I'd be far more worried about mid-high level cars will do in the market. I mean, if you're usually qualified for a $30-40K loan but can only scrape by in the $20-30K range, this offsets the sales for a large chunk of whats available. For that matter, dealers have to be able to get the damn cars on their lots in the first place...

In theory, this is going to hurt the luxury car makers more than the "standard" American and Japanese ones. But if Toyota is apparently sweating this one pretty bad, I can't imagine how bad the swamp-ass must be at GM and Ford...

 

[forza2.0]

British newspapers forecast big trouble for GM, Ford and chrysler. Even BMW say that they will see red in 09. BMW are drastically changing their plans, audi however are still carrying on with their plans of old it seems, massive model expansion and the release of several high performance cars. Guess VAG are just planning on riding things out for the next 2 years.

 

[Tornado]

VAGs plans may be because of there rather differing terms of success than other manufacturers.

 

[YSSMAN]

I think "success" for VAG is often defined by not having the North American operation completely implode, not always assuring that they have money.

It makes me wonder if the reason why Daimler is so eager to get rid of their share of Chrysler is just to bolster the bottom-end of the company for the next year or so...