LOS ANGELES While the nation kept its eyes on Wall Street, banks and financial institutions last week, car alarms sounded in the auto industry, which was hit by a double dose of bad news: domestic sales reached a 15-year low through September, dipping below 1 million units, and dealers are now experiencing a credit crunch, per Todd Turner, principal analyst at Car Concepts, Thousand Oaks, Calif.
Specifically, Ford car sales were down 34 percent from September 2007 to September 2008, Toyota declined 37 percent in the same period of time, and Chrysler was down 40 percent from a month earlier and 37 percent on the year.
"When this year began we were one of the most pessimistic in our forecast," said Turner. "We dropped even that low expectation for a lower one in March for a 13.8 million [unit] year. We now look at that as possibly optimistic." Car Concepts is forecasting sales of only12.8 million units in 2008.
Though major shakeouts in the automotive sector are relatively rare, the numbers could mean a fiscal crisis for agencies as well.
"Do you spend precious money advertising to a market that can't buy even if the motivation to buy is present?" Turner asked. "I'd say probably not."