Global light vehicle sales will decline 14.7% from 2008 levels to 55.2 million units in 2009, according to R. L. Polk & Company. The study released today also predicts that the automotive markets won’t emerge from the worldwide recession until 2012, later than previously forecast, due to worsening economic conditions.
Whether this revised forecast is an accurate prediction or just more wishful thinking remains to be seen. At stake is the profitability of all the automakers in the world, and the survival of many of them, as depressed volumes continue to generate large, unsustainable losses.
Critics have maintained that automotive forecasts — and automaker’s plans derived from them — have been unrealistically high given the massive decline in global wealth brought on by the ongoing Great Recession. As just one example, the U.S. Treasury Department’s Auto Task Force rejected GM’s restructuring plan as being too optimistic in its use of industry volumes in the U.S. in the 12.5 million unit range that Polk is now forecasting.
Polk acknowledges such criticism. It points out that its current forecast for 2009 of 55.2 million units is 23% below the 71 million vehicles that the company predicted in mid-2008, which was prior to the start of the economic crisis in fourth quarter 2008. To be fair virtually no one foresaw the Great Recession coming. Right now it looks like global light vehicle sales through 2015 will be more than 80 million units lower than Polk predicted in mid-year 2008.
The U.S. auto market has been flattened by this ongoing economic crisis. New vehicle sales have dropped from a high of almost 17.5 million in 2000 to 13.2 million in 2008, with a further decline to 10 million projected for 2009. Polk doesn’t forecast the U.S. market reaching the 12.5 unit level until 2012. Automakers insist that “pent-up demand” is building and sales are on the verge of a turnaround, but there is no evidence in the sales data, thus far, to support this wishful thinking. (more…)