Posted By
KIM KORTH
on
1/26/2010 9:57 AM
In September of last year, I did a posting that reinforced that IRN was one of the only automotive analysts that believed in a reasonable recovery in 2010. As many clients will remember, I referred to the forecast scenarios using the following terms:
- Best Case Scenario=Production Sucks
- Probable Case Scenario=Production Really Sucks
- Worst Case Scenario=Production Really, Really Sucks
At the time, our production forecast for 2010 was 11.3 million units which we referred to as the probable scenario. A brief reminder of what I said at the time:
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It’s Lonely Believing the Economy Will Actually Recover in 2010
…it is very difficult to find anyone that doesn’t think 2010 will still be a very tough year with a modest recovery if we are lucky in 2011. That is, anybody but IRN. Our outlier position was really brought home in a meeting last week where the current automotive production forecasts from the major forecast services for 2010 were compared and we were a million units higher than the next closest forecast and almost two million units higher than the most pessimistic forecast. My initial reaction was:
• “I sure hope we turn out to be right because we will look brilliant compared to everyone else”
-and-
• “I sure hope if we are wrong, we are not too far off or we will look stupid compared to everyone else”
Yes, I admit it. It was a shallow initial response. But the more I thought about how many times I have been referred to as being optimistic relative to the economy and the outlook for the automotive industry in the last six months, I realized that we need to make sure our clients understand that our realism is thoroughly supported by data and history and is not just a positive reaction to the continuous chorus of negative attitudes.
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So yes, I am taking this opportunity to suggest that while we may not be brilliant, we are clearly really smart. 
We have brought our forecast down a bit since September (we are currently projecting 11 million units), but most other analysts have been gradually or rapidly bringing their forecast numbers up. At this point, there is less than a 500,000-unit difference in projections from the various analysts for 2010 with most falling between 10.8 and 11 million. While I have some caution that we are less than one month into 2010, barring some unseen catastrophic event, production should be near 11 million units with clear potential for a higher upside in the second half of 2010. After having been perpetually referred to as way too optimistic throughout 2009, I am definitely taking this opportunity to say “I told you so.”
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