Automotive Trucks information on net.

Though Ford and General Motors have scaled back vehicle production in the last quarter of 2004 to reduce some overcapacity, 2005 should produce sales volumes near or even a little bit higher than 2004. Strong sales predicted for the fourth quarter of 2004 should bring the final number near 16.8 million vehicles. Analysts are looking at a one to one-and-a-half percent increase in 2005.

"We'll see some pull ahead and because of that we're expecting the first quarter of '05 to be a struggle," says Joe Barker, manager, North American sales analysis at CSM Worldwide. "But after the first quarter, we're expecting the balance of the year to be a pretty good year."

The sales increase in 2005 will be fueled, not only by a strong fourth quarter in 2004, but also by a glut of new product coming to North American showrooms, as well as additional capacity from new manufacturing plants from Toyota in Texas and Hyundai in Alabama.

Pete Langlois of the Ernst & Young Center for Business Knowledge is a little less optimistic about sales for 2005. He says that while all the new product coming for '05 should help push sales up near the 17 million level he's concerned that while the U.S. economy showed greater GNP growth over the course of 2004 than it did in 2003, that auto sales remained flat even though the manufacturers were doling out record incentives.

"That worries me in the sense that we had great economic growth, we threw more money at people and yet we still, at best, are matching the sales level," Langlois says.

Langlois feels that the automakers are not seeing any sales growth because the strong growth in GNP hasn't translated into wage growth_

"I'm optimistic about next year," Langlois adds, "but until I see the wage growth improve, then sales will probably drop a little bit, to about 16.5."

Market Share

The Domestic Big 3 can expect a further erosion of its market share in 2005 due largely to the increased capacity from the new domestics.

"The next year we're projecting GM to be down to about 27 percent," Barker says. "That's down from 27.8 to 27.9 for this year."

Aside from the added new domestic capacity, Barker credits GM's drop in market share to the fewer number of new products, compared to the other domestic manufacturers.

# posted by Medical Information : 6:17 AM