TROY, Mich., April 30 /PRNewswire/ -- The housing slowdown will continue to have more negative consequences for domestic automakers and suppliers -- those who still depend upon light-trucks for inflated sales and profit projections -- than previously expected. Light-truck purchases are being deferred by builders and contractors with no expectation of substantial improvement in demand until late 2008, when the housing market is forecast to rebound. The implications are that the generally accepted forecast of light truck sales volumes for the second half of 2007 (10-12% predicted over year ago levels) is still overly optimistic due to slowing demand.
Deteriorating Sentiment
Interestingly, auto dealer sentiment is closely aligned with that of homebuilders, as both parties foresee continued reduced demand for light- trucks through 2008.
-- 37% of Ford and GM dealers surveyed continue to report a drop in
overall sales expectations of light trucks which is a significant
increase from our baseline measure in March 2006.
-- 63% of contractors primarily focused on the residential market report
they are delaying large purchases in 2007 (light-trucks or equipment)
due to weak residential construction activity. Nearly 51% of these
respondents are waiting to replace a light truck within their fleet
until at least sometime in 2008.
-- As of April 2007, Ford and GM dealers surveyed reported the
construction market is the primary reason cited for the decline in
their light-truck sales. This is a 10% increase from February 2007.
In this challenging environment, participants in the automotive industry, especially suppliers, must reassess their long term strategic plans and production forecasts for survival and growth as well as prepare for continued decline in demand for light-trucks. Ducker Worldwide offers a unique and valuable combination of market expertise, industry knowledge and strategic market planning to help clients succeed.
Contact:
Brooke Vogel, Business Development Coordinator
Ducker Worldwide
1-877-5Ducker (1-877-538-2537) brookev@ducker.com
http://www.ducker.com/html/content.php?goto=transportation
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