Auto Industry in the Tank
Station executives won’t likely be heartened by the latest news regarding the automotive industry. The American auto industry could be headed for its worst year in 14 years, according to several reports.J.D. Power cut its annual forecast from 15.7 million vehicles to 14.95 million earlier this week, its lowest level since 1994. Two years ago, the industry sold almost 17 million vehicles.
"While the automotive industry’s slow performance in January and February certainly contributes to the anticipated drop in new-vehicle sales, declining consumer confidence and spending, as well as turbulent financial and economic market conditions, are primarily driving the decline,” said J.D. Power’s forecasting executive director Jeff Schuster.
Power’s chief economist Bob Schorbus said the recession has indeed arrived. "The auto market is entering into a true recessionary phase, which is something we have not seen in the last 10 years," he told the NY Times.
The Times mentions how car finance companies "are fearful of repeating the mistakes of subprime lenders in the housing industry and are geerally declining to make risky vehicle loans."
The Wall Street Journal says Detroit’s Big Three are all preparing "belt-tightening measures in case a slumping U.S. economy hurts sales more than expected."