Sales forecast for ’09 adjusted upward…’10 adjusted downward

Clunker awaits its fate

Funny. No one can deny that the cash for clunkers program has helped thin out bloated inventories at dealerships across the nation. And no one can deny that the production needs to crank up now among the big 3 to meet the increased demand. However, the overall impact financially on the industry remains in question. Consider the following sales forecast from IHS that was released recently:

IHS raised its full-year 2009 sales forecast to 10.3 million light vehicles from 9.8 million previously.
But IHS is shaving its 2010 sales forecast to 11.1 million from 11.3 million, reflecting the anticipated “payback” from the incentives-fueled boom.
“It’s not until 2012 where we start to approach the level where we fell from,” Magliano said.
Last year, sales declined to 13.2 million cars and light trucks, down from 16.1 million in 2007. A deep recession has pushed demand for autos this year to the lowest level since the 1980s.

Bottom line – consumers are stepping up vehicle purchases…potentially at the risk of foregone profitability.