I'm not sure how the economy will be next year, but I'm pretty sure about one thing: This is going to remain one of the most competitive markets in the world.
My guess is that automobile sales will soften somewhat, but it still will be a fiercely fought market.
The one thing that will drive the marketplace from now on is price. Let's make a deal.
In nearly every market segment, the pressure will be on to keep prices low. Consumers won't allow price increases. And we'll see continued big incentives and some tough profit and loss statements in the next 18 months.
In the near term, some car manufacturers will bravely say they're going to discourage incentives, and they'll vow to be the first to go cold turkey and withdraw from the incentive marathon.
They'll mean it, too - until the competition starts to eat their lunch, or otherwise gobble up their market share. That brave talk will last for about a month. After their dealers scream bloody murder, they'll conclude that perhaps they should reinstate their incentives.
Even if the car company could survive without rebates and incentives, its dealers simply couldn't compete in the marketplace.
Car companies are caught between a rock and a hard place. If the economy goes just slightly soft, the dealer requires retail incentives to remain competitive. Cut the incentives, and the manufacturer might see higher income per car, but car sales will plummet overnight.
In the next few months, it's going to be a tough game, not for the faint of heart.
Pull incentives and die, at least financially. Keep them and die, but at least you'll keep your dealer body solvent and maintain market share.
Consumers won't tolerate a price increase. They haven't for the past two or three years, and they're not going to change their minds. That's one of the big reasons the American market has set sales records two years in a row.
Now we're going to be separating the weak from the strong. Take your choice: strong dealers and maintain your market share, or raise profits, shut down some plants and watch your stock plummet.
It's going to be an interesting 12 months.