The first quarter of 2001 will be sluggish, but the rest of the year should be strong enough to sustain new-car sales of 16.3 million, NADA's chief economist said Sunday.
Economist Paul Taylor attributes the economic slowdown to several factors, including sharply higher gasoline prices, short-term interest rate increases and fears of inflation.
Taylor said falling interest rates, expected federal tax cuts, low unemployment and consumers' economic stability are positive factors for economic growth and light-vehicle sales.
"There is still a great deal of spending power in American households," he said.
Taylor said NADA's Dealer Optimism Index, which gauges dealer's profit expectations for the next 12 months, was down for the first three quarters of 2000.
Taylor expected the fourth quarter would follow suit.
"It's been a fairly reliable indicator, and we fully expect the sales to drop," Taylor said of the index. "But we're having a tremendous year even as the industry slows."
About last year, Taylor said:
Dealership expenses picked up after a downward trend of three years, mostly because floorplan expenses increased. Floorplan expense per new car retailed, even with higher sales, doubled from about $74 to $149.
Eighty-three percent of NADA members have Web sites; almost 99 percent of those sites are interactive.
"Crossover" utility vehicles — which includes Chrysler's PT Cruiser and small sport-utilities — dominated the sales growth in the light-truck segment with a 78 percent increase.
