European automakers - Mercedes, BMW, Volvo, Audi, Volkswagen - along with Toyota and Honda are well positioned to gain U.S. market share, said Paul Ballew, chief economist for J.D Power and Associates.
'The market swinging toward affluent buyers has clearly helped the Europeans,' he said at the NADA convention.
The domestic manufacturers, however, represent a mixed bag.
'There's upside potential for some makes, like Saturn, over the next few years with new products. GM's Chevrolet and GMC will get a boost from full-sized truck products,' he said. 'But it is imperative for GM to solve the Buick, Oldsmobile and Cadillac riddle.
'If you do not effectively reach affluent households, you are at a severe competitive disadvantage because the growth in market in the U.S. in new-vehicle sales is affluent households. GM has some rays of hope but some question marks, too.'
While Ford Motor Co. has lost overall market share, Ballew sees the automaker doing a good job of repositioning. He also likes the way DaimlerChrysler AG has positioned itself to defend its U.S. market share and grow outside North America.
Smaller, mostly Asian manufacturers, including Nissan Motor Co. Ltd., are in the most precarious position because they are largely reliant on the eroding low end of the market.
'We see Nissan stabilizing in 1999. It hasn't turned the corner necessarily. Every one of its products is competing in very tough segments,' Ballew said.
While the Koreans have a lot of new product, it also will take time, resources and long-term commitment for them to move beyond their discount image.
On a global basis, Ballew said, industry demand will drop again in 1999 from 51.5 million to 51 million vehicles with worldwide capacity at 72 million vehicles a year.
Ballew said economic fundamentals and consumer attitudes favor a continued strong automotive market in the United States. 'It's not a question of a downturn but of how much moderation we'll see,' he said.
He forecasts U.S. sales of cars and light trucks will total about 15.1 million to 15.2 million vehicles in 1999, down from 15.6 million in 1998.
Truck sales will rise to 49 percent of the market; cars, which will see their lowest sales level in decades, will drop to 51 percent of total vehicle sales. The totals do not include medium-duty vehicles.