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U.S. auto sales expected to end 2003 with a flurry
By John Porretto / Associated Press

DETROIT -- Generous consumer incentives and an improving economy appear to be lifting sales of new cars and trucks to one of the highest levels of the year in December, analysts say.

Gary Lapidus of Goldman Sachs predicts a seasonally adjusted annual selling rate of 18 million vehicles in December. That would be well above November’s rate of 16.8 million but off a few percentage points from last December, when General Motors Corp. drove a robust month by pouring on incentives to meet year-end market-share goals.

The sales rate, known as SAAR, indicates what sales for the full year would be if they remained at the same pace for all 12 months.

In a research report, Lapidus said the final tally for 2003 U.S. sales will likely be 16.7 million units, 100,000 more than an earlier forecast. That total would be among the top five years on record but the lowest since 1998. Automakers report December sales Monday.

“Looking forward to 2004, we believe automobile sales will continue to be supported by a consumer-driven tail wind,” Lapidus said.

He added, however, that sales might suffer in the second half of next year as the wave of mortgage refinancing fades and national fiscal policy likely tightens.

Merrill Lynch analyst John Casesa predicts a slightly lower selling rate of 17.9 million for December.

“Given that December sales are heavily weighted to the end of the month, and there’s a slim possibility GM could gain enough share to be flat for the year, there’s more upside than downside to our estimate,” Casesa said.

(Full story here)
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