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Deloitte – 2009 Industry Outlook: Automotive Challenging Times, Emerging Opportunities

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Deloitte 2009 Industry Outlook: Automotive Challenging Times, Emerging Opportunities, January 2009.

  • “There is no question that the automotive industry is in turmoil. While the Detroit 3 have been struggling with profitability and the restructuring of their operations for the past few years, the global financial crisis has begun to negatively impact automotive Original Equipment Manufacturers (OEMs) around the world. The financial crisis has manifested itself in the automotive sector in very tight global credit markets for OEMs, dealers and consumers. This in turn has had a dramatic impact on consumer demand, with double digit year-over-year sales declines leading to sales levels not seen since the early 1980s. This disturbing trend was illustrated by drops of 32 percent and 36 percent in U.S. auto sales in October and November 2008, respectively.3 As bad as 2008 is shaping up to be in terms of retail sales, the 2009 forecast points to even sharper declines in the coming year. Weak consumer demand will ripple through the already struggling Detroit 3, their supply base and dealer networks. And unlike the last few years, when slow growth in the U.S., Western Europe and Japan was offset by growth in the emerging markets of Russia, China, Eastern Europe and India, global financial instability may result in slowing or even sales declines in those markets. The fight for share in a shrinking market will likely prompt consolidations and alliances at the OEM level around the globe: the Detroit 3 may not be the Detroit 3 much longer.”
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