DETROIT Incentives, stronger economy boost vehicle sales

Many analysts expect U.S. vehicle sales to rise 2 percent to 3 percent next year.
DETROIT (AP) -- Generous consumer incentives and an improving economy appear to be lifting sales of new cars and trucks to one of the highest levels of the year in December, analysts say.
Gary Lapidus of Goldman Sachs predicts a seasonally adjusted annual selling rate of 18 million vehicles in December. That would be well above November's rate of 16.8 million but off a few percentage points from last December, when General Motors Corp. drove a robust month by pouring on incentives to meet year-end market-share goals.
In a research report, Lapidus said the final tally for 2003 U.S. sales will likely be 16.7 million units, 100,000 more than an earlier forecast. That total would be among the top five years on record but the lowest since 1998. Automakers report December sales Monday.
"Looking forward to 2004, we believe automobile sales will continue to be supported by a consumer-driven tail wind," Lapidus said.
He added, however, that sales might suffer in the second half of next year as the wave of mortgage refinancing fades and national fiscal policy likely tightens.
Merrill Lynch analyst John Casesa predicts a slightly lower selling rate of 17.9 million for December.
"Given that December sales are heavily weighted to the end of the month, and there's a slim possibility GM could gain enough share to be flat for the year, there's more upside than downside to our estimate," Casesa said.
Predictions
GM, the world's largest automaker, has posted two straight years of market share gains in the United States, but most observers say another repeat is unlikely.
Casesa said GM likely would have to post a 3 percent year-over-year sales increase in December to achieve flat market share for the year. Because of the tough comparison with December 2002, he predicts GM to be flat to down 5 percent for the month.
Casesa expects Ford Motor Co. to be down about 10 percent in December, DaimlerChrysler AG's Chrysler Group off 3 percent and non-Big Three automakers also down 3 percent. Chrysler is among the brands spending aggressively this month.
Lapidus predicts GM's December sales to be down 15 percent, Ford down 6 percent and DaimlerChrysler down 5 percent.
Many analysts and industry executives expect U.S. sales of new cars and trucks to rise 2 percent to 3 percent next year.