2008 auto sales outlook gloomier

The storm clouds over next year's auto sales are getting thicker by the day — and more than just automakers are preparing for a dampened 2008.

From auto suppliers to car dealers to Michigan's economy, if auto sales fall 500,000 or more units, as many forecast, the impact will be wide and deep, including likely consolidation of automotive suppliers, fewer dealerships and lower state tax revenue.

And the impact will be felt beyond the auto industry. Fewer people will eat out or travel to northern Michigan, and they'll curtail their spending at local retailers to try and weather the downturn.

Last week, Global Insight Inc. lowered its 2008 U.S. light vehicle sales projection to 15.5 million units — among the lowest forecasts to date among numerous analysts who see sales sliding. Ford Motor Co. has predicted sales as low as 15.2 million based on market conditions expected for the first six months of the year. Some in the industry say the number will drop further than that.

Three major suppliers told The Detroit News they project U.S. vehicles sales ranging from 14.5 million to 15 million units. Officials at the companies asked not to be named because such information is considered proprietary, but those in the industry are buzzing about how deep production cuts will go.

"The present conditions are very uncertain," said Ford sales analyst George Pipas. "Will there be a recession or not? When does housing rebound? What will gas prices be? Uncertainty in the economic situation is reflected in (the) stock market, and the same can be said for consumers." More at Detroit News