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Retailers, consumers and prices

Auto show-J.D. Power analyst opines on U.S. market

January 12, 2010

cattle1J.D. Power and Associates analyst Jeff Schuster met with Reuters TV and text reporters at the Detroit auto show to discuss the U.S. auto market, including the changing nature of the show and 2010 demand.

About the subdued nature of this year’s show:

“If you look around this show, the message here really is an industry getting back to business. They’re obviously here to sell cars.”

“We’ve changed as an industry … Everyone has evaluated their position after coming out of this steep recession that we were in. At least for the near-term, excess is out.”

“While there’s optimism, it’s cautious optimism. There’s a lot of risks still ahead in this marketplace and the industry. We’re not out of it yet, but I think there’s definitely a general feel of optimism in the market.”

“While I don’t know that we’ll go back to the breaking glass and the cattle down the street, we’ll probably see something in between. We’ll see a little bit more show as we recover.”

About the 2010 market:

“We’re at 11.5 million. I think it’s on the conservative side. We’re looking for an economy that’s improving, credit improvements. So the magnitude of those improvements, if they’re stronger than expected at least in the first half of the year, we could get a little bit more of an increase than we’re currently expecting.”

“I think there could be as much as 500,000 units of upside potential. I don’t think 12 (million) is out of the realm. There’s a lot of potential pent-up demand. We’ve seen an improving buyer dynamic. There’s less people upside down in their cars. Credit is becoming more available. Unemployment is going to be a big one to watch. If it peaks and falls as expected, the rate of that could potentially push us higher.”

About Hyundai:

“That’s certainly a brand to watch as we go into 2010. It had a lot of success in 2009, grew market share. Really were very creative in their marketing …. Were in the right place at the right time (with cash for clunkers).”

About whether electric cars are overhyped:

“You could argue that just because it’s an unknown. It’s still an unknown how consumers are going to react.”

“Certainly, there’s risk that the consumer doesn’t respond in the same sense that everyone’s expecting.”

(Reuters photo of a Dodge truck being introduced with the help of cattle at the 2008 Detroit auto show)

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