Key economic factors point towards another strong year for the U.S. retail auto industry in 2001, according to a forecast from the National Automobile Dealers Association (NADA).

NADA Chief Economist Paul Taylor is predicting total sales of 16.3 million cars and light trucks in 2001, down from 17.4 million last year, but still the third best year in history.

Taylor said the slowing of last year's red-hot sales is being driven by fears of slower growth, higher gas prices, concerns about inflation, and colder than normal winter weather.

The economist said his optimistic forecast is based on recent moves by the Federal Reserve to cut interest rates, continued high household wealth and an anticipated return to more seasonable weather patterns.

"While we've been brought back to Earth since the fourth quarter of 2000, the fundamental conditions are in place for a return to strong sales for much of 2001," Taylor told journalists at a Feb. 4 press conference. "In historical terms, sales of more than 16 million vehicles would be a remarkable accomplishment."

According to Taylor, an area of significant sales strength in 2000 was what he defines as crossover utility vehicles (CUVs), jumping 78 percent in 2000. Many of the vehicles defined by Taylor as CUVs, such as the Ford Escape, Subaru Forrester and Toyota RAV4, resemble mini-SUVs. Others, such as the Chrysler PT Cruiser and the Pontiac Aztek, sport more unique styling.

"CUVs match the needs of a growing number of consumers by combining car, truck and minivan attributes," Taylor said. "They are stylish, practical and fun vehicles."

Taylor made his comments during his annual economic review and forecast at NADA's 84th annual convention in Las Vegas.

Other observations by Taylor included:

* Sales of small cars were up 18 percent in 2000, and should stay at a fairly high level in 2001, fueled primarily by new products from Japanese and Korean manufacturers.

* Luxury car sales were strong in much of 2000, largely due to gains in household wealth driven by the stock market. Sales for these vehicles climbed 5.5 percent from the previous year.

* SUV sales also gained ground, increasing by 2.2 percent.

* Mid-size sedan sales dropped by 6.6 percent.

* Small-car sales jumped by 18 percent in 2000, with the most modestly priced cars increasing by 54 percent.