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Auto Execs Say Industry Ready to Rebound

January 2, 2004

Automotive executives worldwide believe the industry is still at least a couple of years away from returning to peak profitability, but most

say the worst is likely in the past, according to a new study, the Associated Press (AP) has reported.

Twenty-nine of the 100 auto executives interviewed by KPMG LLP, the audit, tax and advisory firm, said they expect industry profits to be at their greatest levels since 2000 in 2006. Only nine cited 2004 for a return to peak profits, according to AP.

In KPMG's survey last year, the highest number of executives pointed to 2005 as the year big profits would return.

KPMG conducted its fifth annual survey in October and November. The American, Asian and European

executives work for 19 automakers and 81 suppliers.

Most analysts say the improving U.S. economy and tide of new vehicles give Detroit's Big Three automakers an opportunity to boost sales in 2004 and reduce consumer incentives, which have diminished profits in the past few years. But they counter that by saying foreign companies such as Toyota Motor Corp. and Nissan Motor Co. remain poised to continue their expansion, aided by their own new vehicles and more North American

manufacturing capacity, according to AP.

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