JD Power & Associates said that the global auto market may experience an outright collapse in 2009 amid growing concerns around availability of credit and general economic stress. It added that, in a closely watched report that credit market restructuring, fewer leasing options and declining vehicle equity are all putting added pressure on the US auto market in 2009. It also said that auto sales in Europe, China and India are expected to slow dramatically in 2009.

The outlook represents the direst warning yet on the auto industry in the wake of the financial turmoil that has rocked consumer confidence and virtually shut the door for many consumers to finance vehicle purchases.

Mr Jeff Schuster executive director of automotive forecasting for JD Power said that "While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse. While mature markets are being impacted more severely than emerging markets, no country or region is completely immune to the turmoil."

JD Power forecast US light vehicle sales would fall to 13.2 million units in 2009 after likely settling at 13.6 million units in 2008, adding that a pronounced recovery is more than 18 months away. US auto sales totaled 16.15 million units in 2007.

The financial turmoil has dealt an additional blow to the US market, which has already been bumping along at a 15-year low amid high gas prices and a housing slump.

It said that slowing within China's automotive market is also projected to intensify in the fourth quarter, and will likely lead to a downward revision for 2009. It forecast auto sales in China would grow 9.7% in 2008, less than one half of the 24.1% growth achieved in 2007. Sales in Europe are expected to fall 3.1% in 2008, led by a 7.5% decline in Western Europe.