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J.D.Power, Deutsche cut '08 U.S. auto outlook

DETROIT July 24, 2008; Soyoung Kim writinf for Reuters reported that J.D. Power & Associates, the auto industry tracking firm, lowered its forecast for 2008 U.S. auto sales and expects no recovery in 2009 amid a deepening economic downturn and record gas prices.

J.D. Power sees U.S. light vehicle sales of 14.2 million units in 2008, down from its earlier projection of 14.95 million vehicles, according to a report on Wednesday. That would mark the industry's lowest point since 1993.

It projected only a slight sales improvement to 14.3 million units in 2009.

Separately, Deutsche Bank reduced its U.S. auto sales forecast to 14 million vehicles from 14.5 million, and expects 2009 sales to be flat, down from its earlier projection of 15 million.

"We believe that our estimates are conservative, but by no means pessimistic," Deutsche Bank analyst Rod Lache said in a research note. "There is very real going concern risk for major U.S. automakers."

Lache sees July U.S. auto sales dropping to 13.2 million units on a seasonally adjusted annual rate, down from 13.6 million in June and 15.7 million in July last year.

J.D. Power said a deteriorating economic environment, credit market strains and record gasoline prices indicate continued weakness in the market in the second half of the year and next year.

"The economic stress and uncertainty that consumers may face over the next six to 12 months will likely result in a continuous period of slow new-vehicle sales," said Jeff Schuster, executive director of automotive forecasting at J.D. Power.

"It is also unlikely that a pronounced rebound will occur in 2009 and conditions could actually worsen before they improve."

J.D. Power said weak U.S. light vehicle sales in June -- the worst monthly result in 15 years -- were expected to carry over into July. It forecast light vehicle sales in July would remain unchanged from June at 13.6 million units on a seasonally adjusted annual rate.

Editing for Reuters by Dave Zimmerman/Jeffrey Benkoe