Despite a hiccup in June, U.S. sales will be good for the rest of the year, forecasters say.
The National Automobile Dealers Association projects sales of 16.8 million light vehicles this year. The forecasts of General Motors, Ford Motor Co. and the Chrysler group range between 16.8 million and 17.0 million units.
The forecasts are all higher than 2003's total of 16.6 million units.
June sales fell 2 percent from June 2003 to 1,447,730 units, creating doubt that sales will stay strong. But economists say the expanding economy and new products will erase June's dip. "A strong run of incentives and new introductions could get us to 16.9 million units," says NADA economist Paul Taylor. "But the June performance would suggest good progress, not stunning progress, is a better expectation in the second half."
NADA says GM's incentives will be critical. Many 2004 models, such as the Chevrolet Tahoe, Buick Rainier and GMC Yukon, have $5,000 rebates.
Bob Schnorbus, chief economist for J.D. Power and Associates, forecasts 16.9 million light-vehicle sales in the United States this year.
"The economy is strong, and the labor market is just beginning to reap the benefits," he says. "Economic conditions should continue to improve for the automotive market, paving the way for a surge in sales in the second half.
"All the elements are there to have a year as strong or stronger than last year. We're still within striking distance of 16.9 or 17 million."