Cars and Drivers

Detroit: It WIll Get Worse (F)(GM)(TM)

CSM Worldwide, which tracks auto trends, says that US car sales will be the worst they have been in nine years for 2007. The firm also predicts that US makers will continue to lose ground to the Japanese. The firm blames aggressive discounting for driving demand in recent years, leaving car buyers with relatively new models that they do not need to replace.

CSM had another prediction. GM has the staying power to avoid discounting in 2007, so its price per vehicle should rise. WIth cost cuts already in place, profits could actually rise at GM in the environment that is being forecast.

THe research reports also said that Toyota should gain a point in market share in 2007, getting it to 16.3%.

The news is especially bad for Ford which is in the midst of its big restructuring and saw its US share drop to about 14% last month.

Ford’s shares have been drifting down and over the last month have fallen from $8.90 to $6.88. Without any relief in sight, that drop may well continue.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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