| Dealers optimistic about 2003
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| By David Goodman, Associated Press |
10/17/2003 |
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DETROIT — An improving U.S. economy, robust summer sales and the easing of international tensions all point to better-than-expected 2003 vehicle sales, a dealers group said recently.
Paul Taylor, chief economist for the National Automobile Dealers Association said he expects U.S. vehicle sales to hit 16.6 million, 300,000 higher, or 1.8 percent, than he forecast earlier this year.
"A strong summer selling season, improving economy and completion of major combat operations in Iraq are favorable signs that auto sales are likely to finish the year somewhat higher than expected," Taylor said.
The 2003 forecast remains below the 16.8 million vehicles sold last year. But Taylor said the outlook remains good.
Continuing large incentives on the new 2004 models also are boosting sales, Taylor said.
The sales-boosting rebates and interest discounts, however, are cutting into U.S. automakers’ profit margins while doing less damage to their foreign rivals.
Edmunds.com, which provides online vehicle buying information, said incentive spending by General Motors Corp., Ford Motor Co. and DaimlerChrysler AG reached $3,687 a vehicle in August, an industry record.
Japanese automakers spent an average of $1,032 per vehicle on incentives in August, Korean companies $1,484 and European brands $1,752, according to Edmunds.com.
Foreign automakers have continued to gain U.S. market share and have begun to introduce models such as full-size pickups and SUVs until now made almost solely by the Big Three.
Sales probably will exceed 16.7 million vehicles next year 2004, even if interest rates rise over the next few years.
The association represents about 19,800 new car and truck dealers with nearly 43,000 franchises, both domestic and foreign.
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