For Auto Industry, 2006 May Look Like 2005

Washington DC December 30, 2005; The AIADA newsletter reported that automotive experts expect 2006 to have a similar look to 2005 with steady sales, high gas prices, and intense competition for automakers, reports The Detroit News.

Sales are expected stay consistent with this year, but the competition for domestic automakers with Toyota, Honda, Nissan, Hyundai, and Kia will cause prices to stay down, according to the paper. International Automakers will also be adding several new models and U.S. factory space to boost production in 2006, while uncertainty with bankrupt parts supplier Delphi and recent cuts are expected to decrease production for General Motors and Ford.

Scott Sprinzen, analyst with Standard & Poor’s, says “GM and Ford will be undermined by high operating costs, volatile gas prices, rising interest rates and uncertain consumer confidence.”