GM CEO Looks For Positve 2004

TOKYO October 20, 2003; Dow Jones reported that General Motors Chief Executive Richard Wagoner said Monday he expects major automakers to ease off on cutthroat price competition in the U.S. market next year, as the U.S. economy gains strength.

Wagoner told a symposium in Tokyo that sales volumes will start to pick up next year, allowing automakers to reduce some of the price incentives that they have been using to entice customers as the economy slumped over the last two years.

"There's probably not going to be significant price increases, but we'll see some mitigation of heavy incentive levels," Wagoner said.

Wagoner added he expects sales volumes in 2004 to also pick up somewhat as economic conditions improve.

He said the reasons he remained optimistic about the U.S. market overall are the strong population growth in the U.S. and demand for cars that is being stimulated by the wide array of new models that manufacturers are offering.

Wagoner also cited the success of Nissan Motor Co. in turning itself around, saying it was due partly to "coming out with some very interesting designs."

One of GM's rivals, Honda Motor Co., expects industrywide sales in Japan to grow slightly on year in 2004, topping 6 million vehicles, judging from the solid sales of the first nine months of this year, said Honda Chairman Yoshihide Munekuni.

Speaking at the same symposium as Wagoner, Munekuni said China's rapidly growing car market - which has seen a huge influx of investment by foreign carmakers - would continue to grow, reaching a size comparable to Japan by 2007. He forecast overall Chinese vehicle sales would reach 6 million vehicles by then.

Both Munekuni and Wagoner played down concerns that automakers were building up their production capacity too quickly in China.

"While maintaining a balance, the industry will grow," Munekuni said.

GM's Wagoner said he doesn't expect strong price competition in the Chinese market because "demand has simply been booming."