Forecaster: Sales will bounce back; Detroit 3 might not

Forecaster: Sales will bounce back; Detroit 3 might not
TOKYO -- The U.S. auto market will pick up next year, but not for the Detroit 3, according to a forecast from Global Insight.
Light-vehicle sales will rebound next year after dipping to 16.2 million in 2007, said George Magliano. He is director of North America for the London market research firm.
Speaking at a conference here, he said sales would rise gradually. They won't regain the 17 million level last seen in 2001 until 2010. By 2012, sales will climb to 17.7 million.
A rising tide won't lift all ships, though. The Detroit 3 will struggle despite rising industry volume, he predicts.
Consider the following parts of his forecast for the industry in 2012:
* The Detroit 3 will lose seven points of market share between now and 2012.
* Imports alone will rise from 3.7 million this year to 4.4 million vehicles in 2012. "This is where Ford, GM and Chrysler are losing out and where the production base suffers," he said.
* Oil prices will stay above $60 a barrel. "That doesn't get better," he said. "The market gets better. The economy gets better. But oil prices don't change. It affects mix."
The Detroit 3's share of North American light-vehicle production -- that's Mexico, Canada and the United States -- will slide to 60 percent in 2012 from just under 80 percent as recently as 1999. It could fall even further. Global Insight's forecast includes all announced capacity additions by non-Detroit 3 automakers in North America. Even so, Magliano predicted that, "by 2011 or 2012, all the transplants will be at full capacity."
"Today, the market is tough. It will get better," he said. "But the competitive pressures never go away."
Beyond 2012, the threat of car imports from China looms. The Detroit 3's future therefore depends on their ability to appeal to younger buyers. General Motors, Ford Motor and Chrysler "have lost the baby boomers," Magliano said. "They cannot afford to lose Generation Y."
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