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Industry sees hybrid sales rising

Auto executives credit lingering fuel price concerns

DETROIT -- Auto executives worldwide believe sales of hybrid cars and low-cost, fuel-efficient models will outpace sales of sport utility vehicles, pickups, and luxury models over the next five years because of lingering concerns about fuel prices, according to an annual survey released yesterday.

Eighty-eight percent of the executives said they expect gas-electric hybrids to gain market share, up from 74 percent who felt that way in 2004. Seventy-nine percent said they expect low-cost cars to gain share. Just 35 percent expect the luxury market to grow -- compared to 48 percent two years ago -- while 36 percent expect SUVs will gain market share.

There were some differences by region. More than half of the Asian and European executives surveyed predicted growth for SUVs, compared to just 6 percent of North American executives. North American executives were the least optimistic about luxury growth, while Asians were the only executives to predict much growth in the pickup segment.

The survey, by the auditing and consulting firm KPMG LLP, collected responses from 140 senior executives at 35 vehicle manufacturers and 105 suppliers. The sixth annual survey was distributed to 50 executives in North America, 50 in Europe, and 40 in Asia in the fall of 2005.

KPMG said fuel prices are among the reasons for the shift in consumer preferences. Twenty percent of respondents said consumers would look for a more fuel-efficient vehicle if US gas prices remained between $2.75 and $3 a gallon, while 45 percent said consumers would be swayed if gas prices went above $3.

The survey predicts continuing market share declines for General Motors Corp. and other North American automakers. GM's global market share in the third quarter of 2005 was 14.6 percent, down from 15.4 percent in 2004.

More than three-quarters of executives predict South Korean and Chinese brands will see the largest global share increases in the next five years.

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