DETROIT Auto execs expect slow recovery, study indicates
Executives said automakers will rely more on new models and technology features to lure buyers this year.
DETROIT (AP) -- Automotive executives are less confident about the industry's return to profitability than they were a year ago, and most see foreign automakers continuing to take market share from U.S. brands, a new study shows.
Some 30 percent of the 100 senior auto executives interviewed by KPMG LLP said they expected lean times industrywide until 2005 at the earliest.
In KPMG's survey last year, 36 percent predicted better profits in 2003, while 24 percent forecast better profit levels in 2004.
Incentives have been a trademark of the industry since the Sept. 11, 2001, attacks, particularly among the Big Three automakers -- General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.
The deals to lure buyers have been a severe burden on profits, though the KPMG survey indicates many executives see less emphasis placed on incentives in the coming years.
Forty-eight percent of those surveyed said they expected an increase in incentives in the next five years, down from 63 percent in 2001.
Brian Ambrose, director of KPMG's automotive practice, said North American manufacturers are counting on dozens of new models with the latest styling and technology to relieve some of the pricing pressure.
At the North American International Auto Show opening in Detroit next week, 45 automakers will introduce some 60-plus vehicles, a record for the event.
"They're banking that these new vehicles will recapture the eye of the consumer, returning them to profitability and making zero-percent financing a thing of the past," Ambrose said.
Analysts aren't so sure, though, and have said consumers have grown so used to financing deals and other bargains that it will be difficult for automakers to back off.
Slightly more than half of the survey's respondents said they expected global market share for U.S. automakers to decrease over the next five years. Just 11 percent expected market share for U.S. makers to grow.
Asian brands were seen as growing fastest among the foreigners.