Auto Sales Put the Pedal to the Metal (Special Issue)
Forecasting light vehicle sales in the mid-1990s was as easy as saying “15.1 million”—the remarkably stable average of sales from 1994 to 1998. Given that stability, it is not surprising that even though sales in the first third of 1999 averaged 16.2 million units, the 1999 Automotive Outlook Symposium consensus forecast was 15.6 million units, with the highest forecast 16.3 million units. In fact, sales in 1999 accelerated through the year, ending at 16.7 million units and surpassing the previous annual sales record. The industry was so healthy that peace generally reigned throughout the Big Three–United Auto Worker (UAW) labor negotiations as both sides did not want to risk the robust profits the industry stood to gain in 1999. The heavy truck industry was also strong, though less media attention was paid to it than light vehicle sales. One of the big problems in the trucking industry was having enough drivers to fill the record number of heavy-duty trucks that were sold. At the beginning of 2000, there were signs of slowing in heavy-duty trucks but light vehicle sales continued to strengthen, averaging 18.1 million units in the first quarter. It was in this environment, on June 1 and 2, 2000, that the Federal Reserve Bank of Chicago held its seventh annual Auto Outlook Symposium. This Chicago Fed Letter summarizes the consensus outlook from the symposium as well as the presentations from vehicle producers and research organizations.