Next Year Just remember: Trees don't grow to the sky

New model year and time for predictions. But first I must admit to one big strike-out. Last fall, I predicted a sales decline in 1999 triggered by the problems in Asia and Latin America, plus a stock market dip.

Instead we are rushing toward the biggest year ever. What's for next year? As I write this the Dow Jones average is at 11,000, unemployment is extremely low, and the cars and trucks out there are extremely attractive. A friend's son tried to buy a new Honda Odyssey minivan and was told it might take months - into next year - to fill his order. I tried to use my influence with Honda to find one. No luck.

Conclusion: If you've got a desirable vehicle, there are lots of customers. Good stuff sells without rebates.

The Negatives: Gasoline prices are climbing as I write, and this is never good. Interest rates have edged up, too. So far, these are minor problems.

Prediction: Some slackening from this year's record, but still a terrific year, especially the first three quarters, so between 15.5 million to 16 million sales.

Serious trouble won't come until the new President is elected, whomever he is. But always remember this: Trees don't grow to the sky.

Broad trends: In trucks, the growth will stop in the traditional products, the familiar sport/utility vehicles (Explorers, Grand Cherokees, Blazers) and the regular minivans. What will keep the ball rolling in "trucks" are new products, such as the half SUV/half pickup (Ford's Sport Trac), the smaller $20,000 SUV (Chrysler's PT Cruiser), the "crossover" vehicles (GM's Pontiac Aztek) with designs the likes of which we've never seen before.

What's needed is more of this: New-look minivans, and new-look pickups (such as Nissan's four-door Frontier pickup). Those with new and exciting vehicles will gain market share and profits, because rebates aren't needed on hot products. Those without them will go the rebate road, because capacity has grown and lots of these SUVs are coming on the used-car market.

In cars, the foreign manufacturers have made startling progress, marching closer to half the market. In July, the foreign brands took 48% of the car (not truck) sales. That's too close. Let's have some exciting design and some quality manufacturing from Detroit. And hurry, because in 2000 the foreign nameplates will continue to grow.

Ford: 2000 and 2001 should be Ford's years. This is the "big push" to close on GM. Ford has four new "truck" products: The small Excape (the name is my guess) SUV coming out of Kansas City, plus three half-SUV/half-pickups, the Ford Sport Trac, Ford SuperCrew and Lincoln Blackwood.

The "entry luxury" Lincoln LS will sell well, but the small Focus is still a question. Why does Ford insist on European-designed small cars for the American market when American designers have done so well from the Model T to the Escort? Ford's few other cars (Taurus, Crown Vic) need serious redesign.

What could go wrong at Ford? People: Jac Nasser (president and CEO) is throwing in new people at high levels: Experienced veterans like Wolfgang Reitzle (ex-No.2 at BMW) who know the car business but don't know Ford, and marketing people, like George Murphy (ex-GE light bulbs, now Ford Div. marketing chief) who don't know the car business. And Ford dealers are getting upset as Ford sets up its own dealer network.

Down in Texas, there's a saying: "Never shoot the horse you rode in on." The old Ford team created the success Jac inherited. Never shoot the horse you rode in on.

DaimlerChrysler: Enough good stuff is coming to keep the fire burning: The PT Cruiser and the four-door Dodge Dakota pickup will be hits. But Chrysler's trucks will come under more pressure from the big GM pickups, when they get four doors this winter, from the new Chevy Tahoe with three rows of seats, from those bullet-proof minivans from Honda and Toyota.

The prescription: more quality and more innovation.

General Motors: The good news is that there's lots of money to be made at 25% of the market (as Ford proved), because that is where GM is going, slowly but surely. Too many models, no sense of urgency, no inspired design.

You've got to go four or five layers down in management to find anyone with serious experience in the American car business. Still, there's good product here: the big pickups and big SUVs, the new Chevy Impalas and the bigger Saturns.

Remember that GM has the biggest marketing operation in the country with billions to spend on ads. This still is a potentially powerful company.

But watch the foreigners: BMW AG will roll with its new four-wheeler, Volkswagen/Audi will push past 400,000 sales next year, and Toyota and Honda will keep rolling.

Again, just remember: Trees don't grow to the sky, and don't shoot the horse you rode in on.

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