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To: trader_joe who wrote (490)	1/4/2001 7:02:07 PM
From: 2MAR$	Respond to of 6445

U.S auto sales seen diving by 20 pct by 2003 By Neil Winton, European Auto Correspondent LONDON, Jan 5 (Reuters) - U.S. car makers face a deep and prolonged downturn with annual auto sales dropping by 3.5 million or 20 percent by the middle of 2003, a report published on Friday said. "Demand is expected to drop by 10 percent in 2001 and another 8.5 percent in 2002, and with the chances of a hard landing (for the U.S. economy) growing, it could be worse," the report from automotive intelligence firm Autopolis said. The report said sales of cars and pickup trucks are likely to fall steadily until at least the first half of 2003, bottoming out at around 14.1 million. "With sales of 17.6 million in 2000, this amounts to a fall of 20 percent," the report said. Sales of cars and pickup trucks will inch up again in 2004 to about 14.8 million, and rally to 16 million in 2005, according to Autoplis. On Wednesday, the U.S. Federal Reserve delivered a surprise interest rate cut because of a weakening economy and tightening financial markets. Wouldn't this action help solve the automotive industry's sliding sales problem? FED ACTION WON'T HELP "I think not," said Autopolis chief economist Graeme Maxton. "Once the car has fallen off the cliff, putting your foot on the brake won't make much difference," said Maxton. "The slowing in car sales has been going on for three months already and the impact of the Federal Reserve's interest rate cuts won't be felt for another few months," Maxton said. U.S. sales of cars and light vehicles -- pickup trucks, sport utility vehicles and multipurpose vehicles -- were a record in 2000, up from the previous record of 16.9 million in 1999. Autopolis' projection of a 10 percent drop in U.S. sales in 2001 is at the high end of forecasts. Standard & Poors DRI expects sales to drop six percent. Marketing Systems of Germany sees only a 1.6 percent drop in 2001 to about 17 million, but expects a deterioration in 2002 and 2003. "We expect sales in 2002 to slide to 15.6 million and again in 2003 to 15 million. But this isn't as bad as it sounds; this is a return to normal sales levels for the market," said Marketing Systems consultant Peter Engelhard. Autopolis's Maxton warned that it was dangerous to assume that while periods of growth are long, corrections are short and relatively painless. "Trends in the market over more than 30 years show a clear and very obvious pattern. When a downturn comes it always lasts for two or three years," Maxton said. ((Neil Winton, European Equities Desk 44 207 542 7975 fax 44 207 542 3722 neil.winton@reuters.com europe.desk@reuters.com)) REUTERS * end of story *

To: trader_joe who wrote (490)	1/4/2001 7:02:07 PM
From: 2MAR$	Respond to of 6445

U.S auto sales seen diving by 20 pct by 2003 By Neil Winton, European Auto Correspondent LONDON, Jan 5 (Reuters) - U.S. car makers face a deep and prolonged downturn with annual auto sales dropping by 3.5 million or 20 percent by the middle of 2003, a report published on Friday said. "Demand is expected to drop by 10 percent in 2001 and another 8.5 percent in 2002, and with the chances of a hard landing (for the U.S. economy) growing, it could be worse," the report from automotive intelligence firm Autopolis said. The report said sales of cars and pickup trucks are likely to fall steadily until at least the first half of 2003, bottoming out at around 14.1 million. "With sales of 17.6 million in 2000, this amounts to a fall of 20 percent," the report said. Sales of cars and pickup trucks will inch up again in 2004 to about 14.8 million, and rally to 16 million in 2005, according to Autoplis. On Wednesday, the U.S. Federal Reserve delivered a surprise interest rate cut because of a weakening economy and tightening financial markets. Wouldn't this action help solve the automotive industry's sliding sales problem? FED ACTION WON'T HELP "I think not," said Autopolis chief economist Graeme Maxton. "Once the car has fallen off the cliff, putting your foot on the brake won't make much difference," said Maxton. "The slowing in car sales has been going on for three months already and the impact of the Federal Reserve's interest rate cuts won't be felt for another few months," Maxton said. U.S. sales of cars and light vehicles -- pickup trucks, sport utility vehicles and multipurpose vehicles -- were a record in 2000, up from the previous record of 16.9 million in 1999. Autopolis' projection of a 10 percent drop in U.S. sales in 2001 is at the high end of forecasts. Standard & Poors DRI expects sales to drop six percent. Marketing Systems of Germany sees only a 1.6 percent drop in 2001 to about 17 million, but expects a deterioration in 2002 and 2003. "We expect sales in 2002 to slide to 15.6 million and again in 2003 to 15 million. But this isn't as bad as it sounds; this is a return to normal sales levels for the market," said Marketing Systems consultant Peter Engelhard. Autopolis's Maxton warned that it was dangerous to assume that while periods of growth are long, corrections are short and relatively painless. "Trends in the market over more than 30 years show a clear and very obvious pattern. When a downturn comes it always lasts for two or three years," Maxton said. ((Neil Winton, European Equities Desk 44 207 542 7975 fax 44 207 542 3722 neil.winton@reuters.com europe.desk@reuters.com)) REUTERS * end of story *