J.D. Power reduces 2008 new-vehicle sales forecast by 5%

A leading auto information firm said Tuesday that it had lowered its 2008 forecast for U.S. new-vehicle sales by nearly 5% to the lowest level since 1994.

J.D. Power & Associates said declining consumer confidence and spending, along with turbulence in the financial markets, had driven its revised forecast to 14.95 million cars and light trucks from 15.7 million. Westlake Village-based J.D. Power said the industry’s slow performance in January and February also prompted it to update the forecast it released late last year.

“All of these [factors] aren’t new; I think it’s the magnitude of them,” said Jeff Schuster, J.D. Power’s executive director of automotive forecasting. “There was some assumption in the previous forecast that something would ease up. . . . All of those things have not improved.”

Retail sales are expected to drop to 12.3 million units, down from the original forecast of 12.6 million, the company said. That expected decline is driven by general economic conditions and fewer incentives.

A further decline in fleet sales also is anticipated, J.D. Power said, because daily rental sales are not expected to return to pre-2007 levels.

Schuster said the effect was likely to be felt more among larger vehicles because record-high oil prices had turned buyers’ interest toward more gas-sipping offerings. That will put more pressure on the already struggling Detroit Three, with their emphasis on sport utility vehicles and large pickups.

Most automakers have predicted sales of about 16 million for the full year. General Motors Corp. said this month that it was sticking with its forecast in the low 16-million range.

Mike DiGiovanni, GM’s executive director of global markets and industry analysis, predicted better sales after interest rate cuts and the federal economic stimulus package take effect.

GM Vice Chairman Bob Lutz said Tuesday that he saw no reason for the Detroit automaker to change its forecast.

“If we can stabilize this thing, we’re still OK for some growth in the second half to where we have a fairly decent year or about like last year,” he said.