AUTO SALES IN OVERDRIVE; INDUSTRY POISED TO SET SALES RECORD THANKS TO ROBUST ECONOMY.

Byline: Sallie L. Gaines Chicago Tribune 

Some time this week, a consumer will drive a new car off the sales lot and drive the U.S. auto industry to historic heights.

With a little over three weeks left of 1999, the industry is on track to sell a record 16.1 million cars and light trucks, breaking a record that dates to the boom year of 1986.

What makes this year even more notable is that it comes after five consecutive banner years for the auto industry, indicating that today's sales are not being driven by pent-up demand from hard times, but by the robust economy, which has boosted the spending power of many Americans.

``Consumer confidence is near all-time highs, and with an unemployment rate so low, I think people are very optimistic about the future and are more willing to buy a car,'' said analyst William Fiala of Edward Jones in St. Louis.

Or, as one Midwest dealer put it: ``People are spending money like drunken sailors. I see new boats, I see new RVs. There's been nine years of unparalleled economic growth. People are not buying new cars because they need to; they're buying because they want to and they have the capability.''

Alan Menard, a general contractor from Clifton, Ill., near Kankakee, says that's certainly true in his case. He recently bought a brand-new Lincoln LS luxury car.

``The old car's fine - it's still sitting in the driveway,'' Menard said. ``I bought a new boat, and my wife decided if I could get a new boat, she could get a new car.''

Dealers nationwide have been seeing customers like Menard all year, leading the industry analysts to predict for the last several months that 1999 will set a sales record. November figures made that prediction a certainty.

November sales were ahead of analysts' projections, largely because Ford Motor Co. had a gangbuster month, 8.3 percent ahead of a year earlier, helped by its Jaguar and Volvo units. General Motors Corp., the world's largest automaker, said sales were up 0.1 percent, while DaimlerChrysler AG's were down 3 percent.

Total domestic sales in November, including cars made by foreign companies, were running at an annual rate of 14.3 million units, compared with analysts' consensus of 14.0 million.

Sales of foreign nameplates more than made up for any softness among American brands. Volkswagen AG's sales, for example, were up a whopping 65 percent for the month. Toyota Motor Corp.'s were up by 11 percent, Honda Motor Co.'s by 2 percent and Nissan Motor Corp.'s by 15 percent.

``The industry is just extremely strong,'' said Hugh Richardson, who owns a dealership in Dubuque, Iowa, that sells Cadillacs, Buicks and Hondas. ``What's hot? What's not? It's just across the board.''

Incentives are bringing down the real cost of buying a car, even though sticker prices still are rising enough to give even jaded consumers a shock.

It takes 23.7 weeks of the median family income - almost a half-year's pay - to buy a new car, according to the Auto Affordability Index compiled recently by Comerica Bank in Detroit. A year ago, it took 24.2 weeks of median income to pay for a car.

``We are starting to see pricing pressure in the industry,'' said analyst Fiala. He predicted that, in 2000, sticker prices will rise little if at all. ``I think you can make a pretty good argument that car-price inflation over the last 10 years got a little ahead of itself.''

That would indicate 2000 may be another good, even if not record, year for the industry.