DETROIT (AP) — U.S. sales of new cars and trucks dropped
to their lowest level in five years in 2003, but analysts and
executives say a strong finish to the year, a bevy of new vehicles
and an improving economy bode well for business in 2004.

Despite record levels of consumer incentives, total U.S. sales
were 16.7 million in 2003, about 1 percent lower than the previous
year. New car and truck business hasn’t been that low since
1998, though annual tallies have reached all-time highs in the past
few years.

General Motors Corp. fell short in its bid to increase U.S.
market share for a third straight year in 2003 as the world’s
largest automaker, along with Detroit rivals Ford Motor Corp. and
DaimlerChrysler AG’s Chrysler Group, saw sales decline.

At the same time, some foreign automakers posted record results,
including Toyota Motor Corp., Honda Motor Co. and BMW Group. A
variety of new vehicles helped several foreign brands expand their
stake in the U.S. market in 2003, but analysts say an upcoming
product offensive by Detroit’s Big Three could make such
gains more difficult this year.

“I think Detroit will continue to lose market share in
‘04, but at a much slower rate,” said David Healy, an
analyst with Burnham Securities Inc. “They have a pretty good
pipeline of new product in the works.”

Another positive for GM, Ford and Chrysler, Healy said, is they
continue to sell of lot of higher-priced sport utility vehicles and
premium-brand cars.

“The profit implication of what they’re selling is
pretty impressive,” he said. “Americans apparently are
taking their price cuts and buying up.”

GM, which will launch 13 all-new models in 2004, said yesterday
its sales fell 9.5 percent in December from the same period a year
ago, when it poured on consumer incentives to meet year-end
market-share targets and sparked extraordinarily high volume. Such
a decline in sales last month was expected among analysts.

Truck sales were down 11 percent; car volume was off about 6
percent.

For the year, GM sales were down 2.4 percent, though it set an
industry sales record for trucks. In an interview Monday during
media preview days at the North American International Auto Show,
GM chairman Rick Wagoner said the industry as a whole rebounded
well from sluggish sales in the first half of 2003.

“That gives both the industry and us a good base to run
into this year,” Wagoner said. “What I don’t want
to do is what we did last year, which, I hate to say, was kind of
fall asleep in the first quarter and you get yourself in a big
hole.”

Toyota’s American arm said its 2003 sales rose 6.3 percent
to more than 1.8 million vehicles — the company’s best
performance in its 46-year history. For the second year in a row
and the sixth time in the past seven years, Toyota’s Camry
was America’s best-selling vehicle.

Toyota said the record year also increased its market share to
an all-time high and established Japan’s No. 1 automaker as
the best-selling car brand in the United States, leaping ahead of
Ford and Chevrolet for the first time.

“Industry sales will continue to grow in 2004, spurred by
a healthy economy and steady growth in consumer confidence,”
said Jim Press, executive vice president of Toyota’s U.S.
operations.

American Honda’s sales, including the luxury Acura
division, rose 8.2 percent in 2003 on record sales. While sales of
Honda’s Accord were flat for the year, the automaker got a
big boost from two car-based vehicles known as crossovers _ the
Honda Element and Pilot.

Ford, the world’s second-largest automaker, said sales of
Ford, Lincoln and Mercury brand cars were off nearly 21 percent
last month, while truck sales — despite strong demand for the
redesigned F-150 pickup — fell 2.7 percent. The outcome was
an 8 percent decrease.

For the year, Ford’s sales were down 4.6 percent.

“Although overall sales were lower, we’re improving
margins in North America by focusing on retail business and selling
a richer product mix,” said Jim O’Connor, who heads
Ford’s North American marketing, sales and service division.
“We’ll continue with that strategy in 2004.”

Ford hopes to attract more car buyers with several new vehicles
scheduled for showrooms this year, including a new version of the
Mustang. Its revamped F-150 pickup, introduced in September,
continues to post strong sales and on Sunday was named North
American Truck of the Year by reporters at the North American
International Auto Show. The car of the year was Toyota’s
hybrid Prius.