The people at the GM (GM) headquarters must have had too much to drink over the holidays. According to Reuters GM "expects overall 2008 U.S. auto sales to be about the same as the depressed levels of 2007". That would be about 16.1 million cars and light trucks, and it won’t happen.
Most of the issues that hurt car sales in the US came around about mid-year. Oil started its run-up to $100. The housing market fell apart. The consumer reached a level of despair. The economy began to falter.
So, the first half of the year was not a bad environment for selling cars. That will not be true for 2008. The entire year could be awful. The idea that car sales in the US can hold 2007 levels is folly. Some industry experts say that sales could drop to 15 million units.
There was a silver lining in the GM announcement. Global sales for the industry may hit 75 million. That will be driven by markets like China, India, and Russia. But, it won’t make up for a crippled US sales environment. GM’s shares are likely to stay around their 52-week lows.
Douglas A. McIntyre
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