Ford, GM, AutoNation refute doom and gloom forecast

NEW YORK -- Despite dire predictions, auto executives say the market for new cars and light trucks is not rapidly deteriorating and may even stabilize in the second half.

Several executives here for the New York auto show say they expect tax rebate checks that begin landing in May, along with interest rate cuts, to get consumers excited to buy again.

Jeff Schuster, executive director of automotive forecasting for J.D. Power and Associates, isn't buying it. On Tuesday, J.D. Power lowered its annual sales forecast to 14.95 million vehicles, down from the original view of 15.7 million.

The old forecast assumed sales would bottom and lead to a better second half. Now, "The magnitude and duration that's likely to take place is longer than we thought," Schuster says.

Rising gas prices, falling home prices and constricted access to loans for folks with spotty credit have converged to create one of the worst years in recent history for automakers. They are fighting the urge to boost sales with hefty rebates and zero-percent loans by slashing production to try to keep supply in line with demand.

Mark Fields, president of the Americas for Ford f, says he's confident the stimulus package and rate cuts will boost consumer confidence. He doesn't see sales falling as dramatically as does J.D. Power.

"I think we've got to put things in perspective," he says. "Is the economy a concern? Sure." But, he adds, "You have to look at it for what's really going on."

Ford expects industry sales of 15.2 million to 15.7 million this year, and through February, sales were at a 15.3 million pace. So to end at 14.95 million, sales would need to plummet in the coming months.

It's hard to know how consumers will react to economic uncertainty because things are changing quickly, says Bob Lutz, vice chairman of General Motors gm.

"Everyone's opinion of it changes day by day," he says. GM has predicted sales will pick up at year's end for a total about flat with 2007's 16.1 million. "We still feel comfortable with the forecast we gave at the beginning of the year."

Mike Jackson, CEO of AutoNation an, the largest dealer network, also is sticking with his original outlook for a mid-15 million year. But even if J.D. Power is right, Jackson says he doesn't think there's much automakers can do.

"You're not going to be able to chase this market with product or with price," he says, noting that if consumers are spooked by the economy, incentives won't lure them into the showrooms. "We are at the bottom of this downturn, and we just have to ride it out."