2007-2008 Vehicle Sales: Slowest Years in a Decade

By Michelle Krebs January 2, 2008

Often a particularly challenging year is sent passing into the history books with a collective “good riddance” and sigh of relief. And while automakers selling vehicles in the U.S. surely are glad the tough 2007 is over, they are bracing for rather than embracing the arrival of 2008.

On Thursday, automakers report December and full-year 2007 vehicle sales. 2007 is likely to see the lowest sales since 1998.

Forecasters predict 2008 sales will be even lower. But 2009 could be a turnaround year.

How Low 2008?

Jesse Toprak, Edmunds.com’s executive director of industry analysis, is among the more optimistic of prognosticators, forecasting a 2-percent decline in 2008 sales from 2007. He predicts sales will drop to about 15.9 million units in 2008 from 16.1 million in 2007 due to current economic challenges and the uncertainty associated with the upcoming presidential election.

“Gas prices and the housing market will continue to help determine how strong sales are and what type of vehicle consumers will purchase in 2008,” said Toprak. “With many macroeconomic concerns heading into 2008, we believe it will be one of the slowest years for auto sales in nearly a decade.”

“But,” he added, “there is promise of a turnaround in 2009 when some macroeconomic factors may be very different than they are today."

Indeed, Ford and Chrysler are counting on it. Both have set 2009 as the year they turn the corner.

December Sales Off Year-Ago Levels

December’s new vehicle sales (including fleet sales) are expected to come in at 1.37 million units when automakers report them Thursday, according to Edmunds.com’s forecast. That’s a 3.6%  decrease from December 2006 but a 16.8% increase from November 2007.

"Adding this forecast to the sales totals year to date, we estimate that the industry will sell approximately 16.1 million vehicles in 2007, the lowest volume since 1998,” said Toprak.

The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 52.5% in December 2007, down from 52.7% in December 2006 and up from 51.1% in November 2007.

December’s Big Six Sales Forecast

Edmunds.com predicts:

GM will sell 332,000 units in December 2007, relatively flat at 0.7% lower than December 2006 and up 27.1% from November 2007. GM's market share is expected to be 24.3% of new vehicle sales in December 2007, up from 23.5% in December 2006 and up from 22.3% in November 2007.

Ford will sell 209,000 units in December 2007, down 6.9% compared to December 2006 and up 17.7% from November 2007. This would result in a market share of 15.3% of new car sales in December 2007 for Ford, down slightly from 15.8% in December 2006 and up slightly from 15.1% in November 2007.

Chrysler will sell 178,000 units in December 2007, down 6.5% compared to December 2006 but up 10.7% from November 2007. This would result in a new car market share of 13.0% for Chrysler in December 2007, down from 13.4%in December 2006 and down from 13.7% in November 2007.

Toyota will sell 222,000 units in December 2007, down 2.9% from December 2006 and up 12.4% from November 2007. Toyota's market share is expected to be 16.2% in December 2007, up slightly from 16.0% in December 2006 and down from 16.8% in November 2007.

Honda will sell 130,000 units in December 2007, down 1.4% from December 2006 and up 16.7% from November 2007. Honda’s market share is expected to be 9.5% in December 2007, up slightly from 9.3% in December 2006 and flat compared with 9.5% in November 2007.

Nissan will sell 91,000 units in December 2007, roughly flat at 0.8% lower than December 2006 and up 12.8% from November 2007. Nissan's market share is expected to be 6.6% in December 2007, up from 6.4% in December 2006 and down slightly from 6.9% in November 2007.

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