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Skies Look Sunny For Second Half Auto Sales

July 22, 2002

Factors that led to stronger-than-expected automotive earnings in the second quarter are likely to keep the industry moving at a quick pace in the second half of the year, according to the Washington Post.

Low vehicle inventories and continued high

sales turbocharged by incentives will lead to a big rest of the year, the Post said.

The Big 3 and major parts suppliers last week reported second-quarter profits that were higher than expected. Profits in the beleaguered

supplier sector have risen substantially because of production increases and cost-reduction programs.

Six of the 10 largest suppliers to the North American industry reported combined net profits of $761 million for the second quarter, up 59 percent from the year-ago period. That is

likely to continue as production ramps up to meet vehicle sales driven by incentives. And each of the Big 3 beat analysts’ estimates

substantially in reporting second-quarter results last week.

Dealers interviewed last week reported some severe product shortages, particularly among popular models across all brands.

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