Wait Till Next Year It looks like a rough year in '99

It's time to start asking, "What can we expect next year?"

How big? The usual 15 million plus sales, or something smaller? The stock market crack, plus recession in Japan and collapse in Southeast Asia and Russia, plus fear and trembling in Latin America, plus nutsy-cuckoo sexual-political chaos at home all indicate a sales drop.

Why? All this stuff makes people nervous, and nervous people hold back on big-item spending (unless they think the currency is about to collapse, which isn't the case here).

This isn't a must; the U.S. economy still is strong, unemployment and interest rates are low, which is good for the car business. The stock market could recover, and Latin America doesn't have to go the Asian Route. Remember, too, in 1987 the stock market broke in October, and a bad few months followed. But 1988 was a better car year than 1987. Still, I believe it looks like a down year, and particularly rough whatever the total market.

Why? General Motors Corp. will do anything to halt the AMSD (Annual Market Share Decline) and get back over 30% share. If GM can't do it, (barring another fall strike, which is always an excuse), the management itself might be threatened, so they will push hard.

Also, the Japanese in a recession at home, will want to hold on to every U.S. sale no matter what happens to the total market. The weak yen helps them play with price, too. The Koreans are desperate for sales, too, but they still are small players.

Luckily, there isn't too much new stuff from Japan for '99. For the home team, GM has its new big pickup trucks, Ford Motor Co.'s Lincoln LSC comes in spring (and the Focus, replacing Escort [see p.40], arrives in the U.S. next fall) and Chrysler Corp. has a new Grand Cherokee, so there's some potential here.

Some fights to watch:

Luxury cars: Mercedes and Lexus will slug it out next year for leadership. Mercedes could hit 180,000 sales in 1999 with help from V-8 models in its Alabama-made SUV, and its CLK coupe, plus its S Class coming next spring; Lexus might match that as its RX 300 gets stronger. BMW won't be close in total volume, but will do very well with its new 3 Series. Audi looks strong, too.

Question: With all this German muscle in the luxury class, will Cadillac's new Escalade keep the division in the race for first place in luxury sales, or will the once so-proud division go down in a crossfire again next year?

Another Question: Will Lincoln be able to hold first place (I believe Lincoln will be No.1 this year, 1998) in luxury sales again despite its late-starting LSC?

Another Question: Will the new midsize Jaguar be the beginning of something big for Jag?

Standard sedan: Toyota Camry, Honda Accord and Ford Taurus go at it again. The shootout among big-volume players makes it tough for cars like Mitsubishi Galant and Mazda 626 to get anywhere.

Minivans: Chrysler still is king, but the rebels are gaining strength, and Chrysler's not-invented-here arrogance gives competitors some room to play (no power doors at Chrysler yet, no VCR).

Honda joins the battle with a new Odyssey, Pontiac pushes harder with successful Montana line, and a swell VCR in the Oldsmobile Silhouette should help the GM line. Ford's Windstar with four doors is more competitive. Toyota enters a second year with its new Sienna.

Pickups: GM's nifty new Chevy/GMC models are out to lick Ford, but Ford is getting more V-8 engines at the end of this year Ford has been hurt by a V-8 shortage, and GM doesn't have that fourth door yet. Should be a good fight. Figure Toyota will start very slow with its new big pickup, but still bite off some business.

Big Question: Can Chrysler's Dodge Ram hold its ground, or will it get nicked in the GM-Ford crossfire?

VW: How far will VW go with its four aces: (1) The New Beetle; (2) the highly-rated Passat (but running against tough Camry, Accord and Taurus); (3) the coming Jetta, and (4) all those pretty Audis? Will it hit 400,000 sales in '99? If it's a good year, VW could be close.

Sports cars: Is there room for all those cuties? On top of the BMW Z3, Mercedes SLK, Porsche Boxster and Mazda Miata roadsters, and the Corvette line, we add in the new closed BMW 2-seater, now and the Audi TT coupe in spring and TT roadster by next fall, and a Honda S2000 around midyear.

A note on Saturn: While Saturn is changing, as I've written, it isn't all bad. Since my last column appeared, GM avoided a Saturn strike and apparently agreed to build a new all-wheel-drive Saturn sport/utility vehicle at the Spring Hill, TN, plant and up capacity to 500,000. Better late than never.

Never a dull moment. - Jerry Flint is a columnist for, and former senior editor, of Forbes magazine