2009 is set to present the automotive industry with some of the most challenging trading conditions since 1991. Overall, new car sales are forecast to remain low for as long as the economy is struggling, says the latest Automotive Market Insight Report from Experian. Consumer demand is expected to continue to fall, although there have been some positive developments – such as the significant reduction in interest rates, fiscal stimulus measures and a sharp drop in inflation.

However, not all consumers react in the same way to a downturn and those that can be persuaded to spend can be filtered out and targeted, says the report. Consumers are, after all, more empowered now than ever before and the internet – namely price comparison websites and online performance reviews – have made this possible. It is one of the key differences between the current recession and the last one.

There is no doubt that conditions in the used sector are tough too, but dealers are reporting a steady demand, with some seeing improved margins. In fact, reports Experian, we are a few months into 2009 and feedback from used car dealers and auction houses indicates a better than expected start to the year.

Nonetheless, real signs of recovery are not expected until 2010. Until then, says Experian’s Kirk Fletcher, “the current state of the economy will continue to force some interesting changes in the automotive industry and among car buyers. The more resilient businesses will be the ones that use insight to gain a better understanding of current trends, as well as to predict the likelihood of future movement.”