Nissan Motors (NASDAQ: NSANY) thinks that the US market will account for less than 15 million vehicles sales this year. Last year that figure was 16.1 million. The Japanese company says it is preparing for the worst. That is too bad, because Nissan tends to sell smaller, more fuel-efficient cars and not large pick-ups and SUVs. If it thinks the market for its products will get much softer, its says something about the entire industry.
According to Reuters, Nissan's CEO, Carlos Ghosn, said: "If we take the trend of the market in May and June it looks like we are going to be much below 15 million. Now I'm not sure if this is going to continue for the rest of year. We are preparing ourselves for the worst."
If a typical car sold in the US costs the consumer $25,000, Nissan's prediction indicates that total sales in the world's largest vehicle market will fall off by about $30 billion. That is nearly one quarter of Ford's (NYSE: F) annual sales.
Nissan is probably a good for the overall US market. If drivers are simply holding onto their old cars and not moving into the small sedans that the company makes, the troubled US industry may be in for a harder year than expected. Consumers can't even afford cars which can save them money on gas.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
6-25-2008 @ 1:31PM
Bob said...
Quote: "That is too bad, because Nissan tends to sell smaller, more fuel-efficient cars and not large pick-ups and SUVs."
Are you kidding? The prime reason why Nissan is hurting is because people were buying the Armada and Pathfinder (two huge SUVs) right and left last year, Nissan saw major dollar signs in those models, and now anyone who bought one can't afford to put gas in it...Nissan is expecting losses because they built a huge armada or Armadas!
I'm still laughing at "not large...SUVs" - the Armada goes beyond excessive...