2005 NAIAS: Detroit Auto Show Economic Impact Reaches $580 Million

DETROIT, Dec. 13, 2004 -- The economic impact of the 2005 North American International Auto Show (NAIAS) is projected to reach $580 million, representing a 5-percent gain from last year's estimated levels, according to David Sowerby, C.F.A., portfolio manager and chief market analyst at Loomis Sayles & Co.

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"Among high profile events that take place in the Metro Detroit economy, the annual automotive show consistently is the number one contributor to business activity in part due to the event covering two full weeks, plus the considerable assembly and dismantling of the individual exhibits," said Sowerby. "The economic impact has the potential to be higher in 2005 both in the direct spending at the auto show as well as the important economic spillover effect."

Among the most important factors that are estimated to contribute to a record year include:

* The U.S. dollar's depreciation over the last year should attract more foreign participants to the event and lead to greater purchasing power while attending the event.

* The replacement rate, which is the rate the industry turns over its entire model line has been shortening over the last four years. Currently the industry is expected to shorten the time for complete model turns from seven years to five years. This naturally generates greater public interest in new products.

* A robust year for travel and tourism is a positive catalyst. For example, major travel-related stock prices are up 35 percent year to date propelled by a 22-percent gain in revenues and over 60 percent in profits. All of these measures have significantly outpaced the overall stock market. In 2005, travel related company revenues and profits should again exceed the broader averages.

* Local-area personal income growth is expected to rise 5 percent in 2005, up from a 2.8 percent growth rate in 2004. Faster growth in income should prompt both a rise in attendance as well as greater spending while attending the show.

* Continued above average growth for the U.S. economy, coupled with continued aggressive auto incentives, is expected to generate light vehicle sales of 16.8 million units in 2005. The recently better than anticipated rise in the University of Michigan's December consumer sentiment index bodes well for spending.

* Combining the key external factors that influence discretionary consumer spending, combined with a great number of new product launches for the international motor vehicle industry, will create the potential for the 2005 North American International Auto Show to generate a record $580 million in total business activity to the regional economy.

"Mr. Sowerby's projection is great news and indicates how much southeastern Michigan truly benefits from the NAIAS in terms of jobs and income for many businesses, individuals and families," said Bill Cook, senior co-chairman for the NAIAS 2005. "The impressive gains in economic growth and tourism are a positive sign to the region, and will help bolster our ambitious plans for 2005. All of the indicators seem to suggest another banner year for the NAIAS and its neighboring beneficiaries."

NAIAS 2005 Official Dates

Press Preview Days will be held Sunday, Jan. 9, through Tuesday, Jan. 11, 2005. Industry Preview Days will be held on Wednesday, Jan. 12 and Thursday, Jan. 13, 2005. The Charity Preview will be held Friday evening, Jan. 14, 2005. Public Days are Saturday, Jan. 15, through Sunday, Jan. 23, 2005.

About the North American International Auto Show

Entering its 17th year as an international event, the North American International Auto Show is among the most prestigious auto shows in the world, and is one of the largest media events in North America. The NAIAS is the only auto show in the United States to earn the distinguished sanction of the Organisation Internationale des Constructeurs d'Automobiles, the Paris-based alliance of automotive trade associations and manufacturers from around the world. The NAIAS Web site can be accessed at http://www.naias.com/ .

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