CSM Worldwide Forecast: 2007 U.S. Auto Sales to Fall Further

DETROIT, Dec. 13, 2006 -- CSM Worldwide is predicting another lackluster year of auto sales in the United States. The sales forecasting group at the global automotive forecasting and advisory firm is projecting sales to descend to a nine-year low of 16.2 million units in 2007.

"Depleted pent-up demand is at the root of our forecast," said Joseph Barker, senior manager, Global Sales Forecasts.

According to CSM, zero-percent financing and massive rebates over the past four years pulled demand forward and the market is now correcting. Despite more than 60 new-model launches this year and another 40 in the 2007 pipeline, CSM asserts auto companies will be challenged with luring back into dealer showrooms those car owners with 0/60 loans. Furthermore, the barrage of new products and General Motors' commitment to profitable sales volume will strengthen new-vehicle pricing. And finally, engineering and build-quality have improved over the years, resulting in longer vehicle life spans and shrinking replacement demand.

"Higher prices, a shortage of 'gotta have' new products, slowing scrappage rates, and the sizeable number of consumers with negative equity in their vehicles are all disincentives to re-enter the market," said Barker.

CSM also expects today's sales share patterns to persist through 2007:

* A disciplined pricing strategy at General Motors is expected to boost brand equity, residual values and profitability over the long-term. However, GM's pursuit of quality volume is projected to result in a 1.2-point sales share decline to 23.5 percent next year.

* Despite incremental new product, Ford is forecast to drop 1.3 points to 18.2 percent of the market due to weaker fleet demand and stiffer competition in segments core to the company.

* DaimlerChrysler stands to grow 0.5 point to 14.7 percent from nine new model introductions slated for 2007.

* Japanese and Korean companies are expected to gain 1.9 points to garner nearly 40 percent of the market. Toyota will once again outgain its competitors by augmenting its share by a full point and capturing 16.3 percent of the U.S. market.

Note: All 2007 sales share estimates are measured against 2006 forecast data.

CSM's light vehicle sales forecast is 16.4 million units for 2006.

CSM Worldwide provides trusted automotive market forecasting services and strategic planning solutions to the world's top automotive manufacturers, suppliers and financial organizations. CSM Worldwide covers the global automotive environment from Detroit, Frankfurt, London, Paris, Tokyo, Shanghai, Grand Rapids, Sao Paulo, Budapest and Bangalore.