Insider: A New Year, New Predictions

With the New Year, it’s time to look into my crystal ball and make some predictions about the coming year.

With the New Year, it’s time to look into my crystal ball and make some predictions about the coming year. Sure, 2005 threw us a bunch of curve balls in the form of Delphi’s bankruptcy, higher gas prices from Hurricane Katrina and GM paying more than $2 billion to tell Fiat to take a hike. It was a crazy year. So what does 2006 hold in store? Well, your guess is as good as mine, but I’ll go out on a limb here and make some predictions.

First, this will be the year that Ford will finally have to face its problems. Look for Bill Ford to find the exit as soon as possible, handing the reins over to someone who can put the company back on track without any need to be “touchy, feely” when it comes to keeping the Ford family name in good favor. The world’s second largest automaker may even have to shed one of its luxury divisions to stay on track (maybe Jaguar will end up elsewhere). Also look for Ford to continue to lose share, since it will not have any significant new product in the market until the second-half of ’06.

While Ford will be struggling with its business, General Motors may actually be proving to the world that predictions of its demise were premature. With more than 19 new products slated to hit the market in 2006, among them the highly-anticipated slew of new Saturns, the General will have a few homeruns, which will help to build up the bottom line and some credibility on the street. Additionally, if fuel prices return to and stay at more realistic levels, the next generation of new full-size SUVs may just end up being the cash cow GM’s executives had predicted. Rick Wagoner will remain firmly at the helm (unless the Delphi/UAW situation goes nuclear), while Bob Lutz will finally have to start laying the groundwork for his replacement (unless these new products flop, at which point the ground might fall out from under his feet).

Chrysler will experience yet another year of dramatic gains in both sales and image. The upcoming Dodge Caliber will be a raging success, although the Jeep Compass may fall flat. The Dodge Nitro will be another hit, while Chrysler’s attempt to enter the full-size SUV market with its upcoming Aspen will flop.

Toyota will continue to gain share thanks to its barrage of new products, including the volume-leading Camry, FJ Cruiser SUV and a slew of Lexus vehicles. Volkswagen will have another tough year, while Audi will finally gain the respect it deserves thanks to its Q7 SUV. The road will be increasingly difficult for Mitsubishi, and Mercedes-Benz will pare its model range, getting back to its roots. BMW will maintain its brisk pace, leaving its competitors in Stuttgart—Dieter Zetsche notwithstanding—in the dust. The Koreans, meanwhile, will continue to gain respect and share with little or no fanfare, staying below the radar building their images one sale at a time. Overall industry sales should remain relatively flat, which means more deals, deals, deals (at least from the domestics). We’ll see if my crystal ball is fuzzy or not.