Zero Schmero

Great vehicles will keep the boom going — forget about 0% financing and other gimmicks. Sure, it gets people into the store, but it's exciting product that gets them buying.

“This year 2002 could be in the 15 million car/truck sales range.” That was in my January column. Wrong! At this moment it looks like 16.7 million.

“Some slackening from this year's record…15.5 to 16 million.” That was my prediction in October 1999 for 2000.

Wrong! Year 2000 sales were a record 17.4 million.

“All indicate a sales drop…I believe 1999 looks like a down year,” I said in 1998. Wrong! Sales jumped from 15.5 million to 16.9 million.

In fact, the last time I was right was in December 1997 when I wrote for 1998: “Another 15 million-plus year.”

Right! It came out 15.5 million.

I'm not the only prognosticator who's been wrong. Just about everybody underestimated the strength of auto sales: 16.9 million in 1999; 17.4 million in 2000; 17.2 million in 2001 and 16.7 million or so this year.

I assure you that until the last few years I had a pretty good record. So now it is time to estimate again. Guess what. All those signs are negative again.

The economy is just so-so. The stock market has dumped. Gasoline prices are climbing. There's a war looming, and they say the puff from incentives and 0% financing has worn out.

But I'm tired of being wrong. No more of these down predictions. We may have a poor year in 2003, but it will have to happen first. I am just tired of being wrong.

So what is my prediction? General Motors says 16.5 million for 2003, and that is good enough for me until proven wrong.

The auto business has much going for it. The population is huge, nearly 300 million now, and the great “Baby Boom” generation is in its peak earning years and can afford what it wants. Incomes in this country remain strong. The younger generations are in their car-buying years, too. Interest rates still are low, and incentives are high.

But most important is product. We never have had such an enormous display of attractive product. I can count 24 sport cars, alone, here or on the way. The strongest trend still is the SUV in all its forms: traditional truck-frame models, expensive variations, spinoffs and crossovers. It seems as if everyone wants one. These vehicles account for 25% of new-vehicle sales now, and the percentage is growing.

What about 0% financing? Zero Schmero. The great new products will lure them in.

For Detroit, though, the problem is much of these exciting new products are coming from Honda, Toyota and Nissan. GM, Ford and Chrysler are far behind in crossovers. There is no Detroit vehicle, for example, that matches the Honda Pilot, Element or Nissan Murano.

The good news is Detroit is fighting hard for the truck market with incentives. And the new stuff is coming: See the Chrysler Pacifica and Cadillac SRX. I also truly believe that it won't be long before Detroit's cars start winning some converts, too.

Okay, maybe I am wrong. Maybe next year will be 15.5 million. But I won't predict it. I'm tired of being wrong on the low side.

Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.