• The New York Times, Thursday, March 20, 2008 11:46 AM

Several industry forecasters have sharply cut their projections for new-vehicle sales to less than 15.5 million this year and abandoned rosy predictions for a rebound in the second half. The gloomy outlook will probably lead to more production cuts, but buyers can expect better deals to draw them into the showroom.

"The auto market is entering into a true recessionary phase, which is something we have not seen in the last 10 years," says Bob Schnorbus, chief economist at J. D. Power & Associates. His firm has cut its annual forecast to 14.95 million vehicles, from 15.7 million--the lowest sales level since 1995.

Analysts are now hedging predictions for a stronger second half of the year, despite the Federal Reserve's move on Tuesday to cut interest rates. Automotive finance companies are fearful of repeating the mistakes of subprime lenders in the housing industry and are generally declining to make risky vehicle loans.

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