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Polk Study Finds Dealers & Manufacturers Disagree Over Future

23 April 2000

Second Report in a Series From the New York International Auto Show Floor
    NEW YORK - Auto dealers and manufacturers disagreeon the future of light 
truck sales, according to results gathered from visitors of the New York Int'l 
Auto Show (NYIAS) at the Jacob K. Javits Convention Center.  Today's trend 
report is the second in a series compiled by The Polk Company.

    This report details the survey responses Polk captured at NYIAS 2000
during press preview and dealer days (April 19-21).  It also provides a
sampling of additional questions being asked at the Polk Auto Trend Centers,
along with a Top 5 listing of favorites from the show displays.  The Polk Auto
Trend Centers will be used to collect NYIAS attendee opinions throughout the
2000 show and reports will be issued on a regular basis, providing more
in-depth analysis as the show progresses.

    Polk is a global company, delivering multi-dimensional marketing
information solutions to the automotive industry to enhance the relationships
consumers have with brands.  Through lifetime understanding of individuals,
Polk helps its clients maintain current customers, win new ones and build
their brand loyalty.  The company has served the automotive industry for
78 years and is the longest-standing steward of automobile records in the
United States.  Founded in Detroit in 1870, Polk launched its motor vehicle
statistical operations in 1922 when the first car registration reports were
published.  It now serves nearly every segment of the motor vehicle industry
as an analytical consultant and statistician, a provider of database-marketing
services, a supplier of vehicle histories and a data enabler for geographic
information systems.  Based in Southfield, Mich., Polk is a privately held
firm that employs more than 2,500 people worldwide, currently operating in
Australia, Canada, China, France, Germany, Holland, Spain, the United Kingdom
and the United States.

    Dealers, Manufacturers See Different Futures for Light Trucks

    New York area dealers believe that light truck sales will continue to gain
market share at the expense of cars, while a majority of manufacturer
representatives believe the truck market will either stabilize or decrease.

    The results shown in the following table suggest that dealers and
manufacturers are at odds with respect to product offerings:

                                 Truck Share Will ...
    Group               Grow         Stabilize      Decrease
    Dealers              71%            11%            18%
    Manufacturers        29%            47%            24%

    Dealer reaction to this question likely reflects the current boom in truck
popularity, which has been highlighted by the wave of high profile product
introductions at NYIAS 2000.  In addition, light truck share in the New York
area lags behind the national average due to a number of considerations
including high import car share, parking issues and the low level of vehicles
per household in some markets (such as Manhattan).  A comparison of light
truck share in New York markets shows the sharp contrast to other locations:

    Market              1999*
                         Light Truck Share
    U.S.                 48.3%
    New Jersey           37.9%
    New York (State)     42.3%
    New York City DMA    37.9%
    Los Angeles DMA      44.1%
    Chicago DMA          41.5%

    * Calendar Year

    Manufacturer opinion may well be influenced by the existence of government
CAFE requirements, mandating minimum fuel economy standards for each
manufacturer's product line.  Persistent fears that a Gore presidency could
lead to stricter standards could also influence manufacturer perceptions.

    So will truck share continue to grow?  Polk registration data indicate
that the numbers are beginning to stabilize.  Nationally, light truck share
grew at a slower rate in 1999 (versus prior years) suggesting a pattern of
stabilization.  However, the New York and New Jersey markets experienced
faster increases in 1999, compared to 1998, a fact that may explain local
dealer optimism.

    Market                    1997* Light    1998* Light    1999* Light
                              Truck Share    Truck Share    Truck Share

    U.S.                      44.8%          47.2%          48.3%
    New Jersey                35.8%          36.7%          37.9%
    New York (State)          38.0%          40.1%          42.3%
    New York City DMA         35.0%          36.0%          37.9%
    Los Angeles DMA           40.8%          42.5%          44.1%
    Chicago DMA               36.6%          39.6%          41.5%

    * Calendar Year

    Additional Polk research has shown that households tend to manage their
household fleet by selecting complementary vehicles to fulfill specific needs
with a minimum of overlap.  Typically, this translates into one midsize car
matched with a minivan, pickup, or SUV. This pattern is likely to restrict the
rate of truck growth.  In addition, research has shown conclusively that
single-vehicle households are predominantly car-based, with many younger
households moving directly into a car-based crossover vehicle.

    With the continuing decline in the size of the American household, both
cars and the newly emerging crossover vehicles are likely to regain share at
the expense of light trucks.  This factor, combined with the aging of the Baby
Boomer generation, may eventually put the brakes on America's love affair with

    Lifestyle Trends

    What new high-tech vehicle features were most desirable to media and auto
industry insiders?  Visitors to the show were asked to choose the product they
would most want in their next new vehicle.  Media and auto industry visitors
differed in their choice of high-tech vehicle products; the media wanting
access to directional information and insiders wanting voice-activated

    What Product Do You Want Most In Your Next New Vehicle?
                                                 Media    Auto Industry
    On-line mapping/navigation system             53%            37%
    Voice-activated controls                      15%            29%
    Internet access                                8%            15%
    Heated seats/climate control                  13%             8%
    Video entertainment console                    6%             8%
    Adaptive cruise control                        6%             3%

    As of end of day April 21, 2000  * Top 5 leaders based on voting at the
     Polk Auto Trend Centers

    A clear early favorite of NYIAS 2000 is the Volkswagen New Beetle,
capturing nearly one-third of the vote in the small car segment.  Vehicles
with innovative styling were favorites among press and auto industry visitors
to the show, drawing top votes for Volkwagen's Passat in the mid-size/large
car segment, and Chrysler's PT Cruiser in the minivan/full-size van segment.

    Concept Vehicle:                       Minivan/Full-size Van:
    1. Jaguar F-Type Concept    12%        1. Chrysler PT Cruiser    17%
    2. Chrysler 300 Hemi         9%        2. Honda Odyssey          10%
    3. Chevrolet SSR             7%        3. Chrysler Town & Country 8%
    4. Hummer H2                 7%        4. Mazda MPV               8%
    5. GMC Terradyne             7%        5. Mercury Villager        8%

    Exhibit:                               Pickup Truck:
    1. Saab                     15%        1. Dodge Ram Pickup Truck  15%
    2. Audi                     13%        2. Toyota Tundra           15%
    3. BMW                      10%        3. Ford F-Series           13%
    4. Chrysler-Plymouth         7%        4. GMC Sierra              13%
    5. Mercedes-Benz             7%        5. Chevrolet Silverado     11%

    Sports Car:                            Prestige Luxury Car:
    1. Porsche 911              11%        1. Jaguar XJ8              13%
    2. Dodge Viper               9%        2. Infiniti Q45            10%
    3. Porsche Boxster           7%        3. Mercedes-Benz S-Class   10%
    4. BMW M5                    6%        4. BMW 540                  9%
    5. Chevrolet Camaro          6%        5. BMW 7 Series             9%

    Luxury Car:                            SUV:
    1. Cadillac Deville         11%        1. BMW X5                  14%
    2. Lincoln LS                9%        2. Hummer                  10%
    3. BMW 3 Series              8%        3. Nissan Xterra            4%
    4. Lexus GS400               8%        4. GMC Yukon                4%
    5. Mercedes-Benz CLK         8%        5. Jeep Grand Cherokee      4%

    Midsize Car:                           Small Car:
    1. Volkswagen Passat        17%        1. Volkswagen New Beetle   31%
    2. Honda Accord             12%        2. Ford Focus              18%
    3. Volvo S40                 9%        3. Honda Civic             10%
    4. Pontiac Grand Prix        8%        4. Volkswagen Golf          9%
    5. Volkswagen Jetta          8%        5. Nissan Sentra            6%