U.S. auto sales may fall 7 pct in 2008 SP says
NEW YORK (Reuters) - U.S. auto sales “dropped sharply” in recent months and may fall 7 percent this year, while higher costs from tougher environmental regulations may pose a long-term challenge, Standard %26amp; Poor’s said in a report on Tuesday.
U.S. auto sales may fall to 14.9 million this year from 16.1 million last year and 16.5 million in 2006, S%26amp;P said. The rating company also said it may take two years before U.S. automakers see the benefit from large cash health care savings incorporated in the 2007 labor contract with the United Auto Workers union.
“The next 21 months will be crucial for the domestic automakers as they try to reduce losses and cash use in their North American operations,” said S%26amp;P analyst Robert Schulz.
Moreover, even if General Motors Corp (GM.N: Quote, Profile, Research), Ford Motor Co (F.N: Quote, Profile, Research), and Chrysler LLC turn around their operations, “they face another long-term obstacle in the form of increasing costs of complying with new environmental regulations,” S%26amp;P analyst Gregg Lemos Stein said.
S%26amp;P released their views in a series of reports on Tuesday.
(Reporting by Walden Siew; Editing by Tom Hals)
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