The auto industry cruises into this year the same way it left 1994 -- on a roll.
This could be the industry's best year ever, said Edward Lapham, the executive editor of Automotive News, a Detroit-based industry publication. "We'll be teasing with the record of 16 million units [cars and light trucks] set in 1988."
Mr. Lapham thinks 1995 will be a very good year and perhaps a great one if, as he puts it: "Interest rates stay down, the economy continues to grow at a moderate rate and people stay happy."
One of his fears, however, has to do with interest rates. "A rise in rates could make car buyers a little skittish," he said, and that could cool the hot market.
Mr. Lapham is not alone in his prediction of the industry moving into the passing lane. Based on its survey of 16 Wall Street auto analysts, Automotive News reported recently that they forecast an average 15.8 million units for 1995 and a record 16.3 million cars and light trucks in 1996.
David E. Cole feels that the 1995 market may be limited only by the industry's capacity to build vehicles.
"I think 1995 will be a very good year," said Mr. Cole, director of the University of Michigan's Office for the Study of Automotive Transportation. "But it is not going to go through the roof. The industry doesn't have the capacity to do that," he said of its moves in recent years to close plants because of excess capacity.
Mr. Lapham said there will be tough competition in two segments of the market this year -- minivan and the midsize family sedan.
He also expressed confidence that General Motors Corp.'s mid-size van plant on Broening Highway will have another good year.
He said the Chevrolet Astro and GMC Safari vans produced here are more truck-like than most other vans, and a solid market remains for these vehicles.
"You can do more things with them," Mr. Lapham said of the vans made in Baltimore.
In the more car-like minivan market, he said increased competition will come from a new Honda van. Later in the year Chrysler Corp. will introduce restyled versions of its popular Dodge Caravan and Plymouth Voyager.
The family sedan is also expected to be at the center of another flurry of competition. Mr. Lapham said Chrysler's new Cirrus and the Dodge Stratus will be going up against Ford's new Contour and Mercury's Mystique, the Honda Accord and Mazda 626.
He said General Motors is expected to capture a bigger slice of this market with its new Lumina and Monte Carlo that were introduced last fall. Later this year, he said, Ford will roll out its new Ford Taurus and Mercury Sable.
Mr. Lapham thinks this competition will be a boon to car buyers. "Consumers can look for some real deals in terms of incentives and leasing packages as the year wears on," he said.