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Experts Anticipate US Automobile Industry to Go Down in 2008
May 01, 2008

The US automotive industry is under the grip of indifference of people because people’s disposable income is declining and unemployment rate is rising.
 
The US auto industry will see tough time in the first five months (February to June) of 2008 but Paul Taylor, Chief Economist, the National Automobile Dealers Association (NADA), anticipated that the situation will get better in the second half, as reported by AssociatedPress.
 
Besides, NADA also highlighted that the sales of cars and light trucks fell 6.7% with 15.2 Million annual, a significant down as compared to December 2007. Not only this, the NADA also predicted downturn in the industry for whole year with sales drop to 15.7 Million, a 2.5% decline from previous year’s 16.1 Million-vehicle sale.
 
There are multiple reasons for the low sales prediction in the industry like slow economic growth, credit problems, decline in sales, and rising unemployment in the country. Taylor also predicted that unemployment rate will rise 5.3% from 4.9% in January 2008.
 
According to NADA, the overall economy is predicted to be less than 2% increase in GDP for 2008. Consequently, the wages of people will come down and they will avoid buying new vehicles.
 
Including these reasons, rising petrol prices and increasing cost of home heating and cooling are putting extra burden on the budgets of people. As a result, people are not spending on automobiles in the US. Moreover, people are avoiding trips and using less fuel, affecting the demand for new vehicles negatively in the country.
 
Experts have also attributed low housing market for slowdown in the automobile sales. People are more inclined to buy new homes in place of buying new vehicles due to fall in mortgage rate. 
 
In order to bring the automobile industry back on the track, NADA has ventured with AutoTrader.com, the leading online classified marketplace, to launch new online seminar series. The seminar, “Automotive Internet Marketing: A Traditional Approach to Non Traditional Media”, will start from spring 2008 and provide auto dealers a platform for using Internet for auto marketing.

As per a Research Analyst at
RNCOS, “Rising petrol and energy prices, slowdown in housing industry, and increasing unemployment is taking away US consumers from automobile market. Therefore, auto dealers review their current policies and devise new ones that encourage people to buy vehicles without burning hole in their pocket.”

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