Auto dealer will suffer little if U.S. goes to war

If the U.S. goes to war with Iraq, Taylor says total volume likely will decline by another 200,000 vehicles as the conflict chills Americans' spending.

His predictions are in line with most industry forecasts, which range from 15.9 million to some 17 million.

"Given that the preceding four years were the best in the history of automotive retailing, there's momentum for the long-run," Taylor said. "Positive underlying economic fundamentals are working in the industry's favor."

Some of the 25,000 dealers and industry observers here said they've been encouraged by recent economic indicators, such as Friday's news that Americans boosted their spending in December by the largest amount in five months.

Part of that surge was attributed to year-end financing deals and other incentives on cars and trucks.

At the same time, Americans' incomes, including wages, interest and government benefits, rose by a solid 0.4 percent in December, up from a 0.3 percent rise the month before.

Both measures were stronger than analysts had expected.

Ford Motor Co. chairman Bill Ford said Saturday he remained optimistic his company would top Wall Street earnings forecasts this year, though he acknowledged the uncertainty related to a possible war.

"I think there's just a general tone of skepticism out there toward all businesses right now,"Ford told reporters. "I think with the threat of international conflict hanging over the stock market, it doesn't help any of us."

U.S. light vehicle sales topped 17.1 million in 2001 -- the second-best year on record -- before declining to what's still considered a robust level last year.

Dealer incentives drove much of the business and led to a surge in trade-ins as consumers opted for new vehicles.

Taylor said a focus among dealers this year will be ridding their lots of used products.

"Dealers are challenged with the need to turn over inventory quickly in their used car operations at a time of faster depreciation on these vehicles," he said.

Taylor also said sales of crossover utility vehicles -- those with features of a car and light truck -- are likely to grow at rates near 50 percent this year as new versions, such as Chrysler's Pacifica, are introduced.

In 2002, light trucks, including CUVs, made up 52 percent of total light vehicles sold in the United States.

Matthew Bataille, who has dealerships in New Orleans and Gulfport, Miss., said war would almost certainly hurt sales of his high-volume brands such as Volkswagen and Nissan.

"It's a worry," he said. "In an economy like ours, a war would definitely slow the buyer down."<