Economist predicts sales of cars will drop

SAN FRANCISCO (AP) — The next five months or so will be difficult ones for U.S. auto dealers, with sales expected to slump, but the chief economist for the National Automobile Dealers Association expects a bit of a rebound in the second half of the year.

Still, economist Paul Taylor predicts U.S. car and light truck sales will drop to about 15.7 million for the full year. That’s down about 2.5 percent from the 16.1 million vehicles sold in 2007, the worst year in a decade, and down 1.3 million vehicles from the 17 million sold as recently as 2005.

At the NADA’s annual convention in San Francisco, Taylor predicted slow economic growth and weak sales during the first half of the year, with unemployment and credit problems lingering.

“Energy costs of gasoline, home heating and cooling will continue to drain money from consumer budgets and slow down consumer spending,” he said Sunday.

Other economists and industry analysts have predicted U.S. sales as low as 15.5 million, while some automakers have predicted up to 16 million.