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US Auto Sales To Decline In 2007
May 01, 2007

Auto sales are all set to decline to almost a decade low levels next year (2007), as slow economic growth & housing slump continue to haunt the US auto industry.

After witnessing strong growth over the years, auto sales in USA are slowing & as per forecasts, sales could reach to lowest levels in almost a decade in 2007, reports WSJ (Wall Street Journal), in news published by Reuters.

As growth slows in overall US economy & housing industry witnesses a slump in Californian markets, in particular, there could be tougher times ahead for
Ford Motors, General Motors & the Chrysler Group, the big 3 of US auto industry.

As per industry estimates, sales of light vehicles & trucks will be around 16.37 Million units in 2007, lowest since 1998, dropping by 2% from 2006's expected sales of 16.7 Million units.

WSJ said, "Auto manufacturers are optimistic as both Toyota & GM are estimating sales of about 16.5 Million units of cars & trucks in 2007. However, some analysts are expecting even sharper declines."

Decline in housing industry & recent interest rate hikes are seen as big contributing factors. For instance, in California, where adjustable-rate mortgages are prevalent on costly homes, the interest rate hikes have saddled people with high mortgage payments, cutting down their expenses on new vehicles.

An auto industry analyst at
RNCOS said, "High energy & borrowing costs are pressurizing consumers, who are already highly indebted. Demand is expected to weaken due to an economic slowdown, as consumers will tend to focus more on saving in coming years."

Californian auto sales decline by 16 % in Q3 2006.
Motor Car Dealers Association of California is predicting a 2.5% decline in new car registrations. Dealer groups are foreseeing declines in Arizona, South Florida & other areas as well where housing industry is facing a slump.

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