NEW YORK — As car buyers lose confidence, so do auto analysts.
Consumer confidence is at an all-time low. People are unable or unwilling to take on any additional payments. This has prompted auto analysts to slash their forecasts for sales of new cars and trucks this year, citing increasing uncertainty about whether the industry can rebound in the second half.
Automakers report results for February on Tuesday. In January, industrywide light vehicle sales dropped a combined 37 percent. Some industry observers expect February's sales to be even worse.
Jesse Toprak, executive director of industry analysis for the auto Web site Edmunds.com, said would-be car buyers are becoming increasingly scared that they won't have a job down the road.
"There's so much uncertainty," Toprak said. "Even if they have a job, they probably have friends and family that don't, so it's becoming more real to them."
Crumbling consumer confidence has replaced tight credit markets as the biggest hurdle to selling cars, according to Toprak. Meanwhile, housing values continue to tumble, also making consumers more cautious about how they spend their money.
In addition, fearful car buyers are well aware that both General Motors Corp. and Chrysler LLC are fighting to stay alive with the help of billions in loans from the federal government.
With all the headwinds consumers are walking into, analysts for J.D. Power and Associates on Thursday slashed their 2009 sales forecast by 1 million units to a seasonally annualized adjusted rate of 10.4 million units. That figure, known in the industry as SAAR, indicates what sales would be for the full year if they remained at that month's pace, with adjustments for typical seasonal fluctuations.
Toprak is even more pessimistic. He revised his forecast downward to 10.1 million units.
Some car shoppers that previously would have bought a new vehicle are opting for a used one instead, thinking that it's a safer purchase. That's not always the case, Toprak said.
According to an Edmunds.com study, about 511,000 used-car sales in the past three months would have been new car purchases during better economic times. Those lost sales project a SAAR of more than 2 million vehicles, or 15 percent of total new car sales based on last year's sales figures, Edmunds said.