Automakers expect better sales in 2004 after their worst year since 1998, marred by war in Iraq and a shaky U.S. economy.

And incentives are here to stay -- for a while at least.

New cars and trucks will mean more competition for automakers and more choices for consumers, say the chief executives of General Motors, Ford and Nissan.

In separate interviews at the North American International Auto Show in Detroit, car-company bosses talked about pricing, incentives, competition and new products.

``As the economy strengthens and it builds natural demand, history would suggest we'd see some easing of incentives,'' said Richard Wagoner, chairman and CEO of General Motors.

But, he said, ``I'd be overselling if I said we see it right now.''

Since the Sept. 11 terrorist attacks, automakers have relied on incentives -- customer cash back, zero-interest financing and such -- to sell cars. This month, car companies are spending $3,476 in incentives per vehicle, compared with $2,936 a year ago, said Art Spinella, general manager of CNW Marketing/Research in Bandon, Ore. GM is offering much more than that -- $4,328 a vehicle -- he said.

Spinella predicts that the use of incentives will remain flat in 2004 ``only because some of the new products won't require them.''

William Clay Ford Jr., Ford Motor's chairman and CEO, agreed with Wagoner, describing the possible ``amelioration of the incentives wars'' as an ``upside'' for U.S. car makers.

Still, Ford said, he isn't counting on much of a change.

``I built our business plan on the notion that incentives would remain high. But if they don't, great,'' he said.

Ford is now offering $4,271 a vehicle, according to CNW, up from $3,521 this time last year.

Nissan, which saw its U.S. sales grow in 2003 while those of GM and Ford fell, isn't as aggressive. (It's spending $1,639 a vehicle, CNW said.)

Carlos Ghosn, president and CEO of Nissan Motor, said his company doesn't need to be a big incentives spender.

Instead, Nissan has been aggressive in adding new products such as the Titan full-size truck and the Murano sport-utility and in bringing back the 350Z sports car.

Ghosn predicts a growing U.S. car market in 2004 but ``it will not grow as much as the economy will grow.'' That's because heavy incentive spending has boosted U.S. car and truck sales over the past several years.

The U.S. auto industry reported car and truck sales of 16.7 million in 2003, down about 1 percent from 2002. That made it the lowest year for vehicle sales since 1998, but 1999 through 2003 are the five best years in the industry's 100-plus-year history.

Overall, GM, Ford and Chrysler continued to lose share -- mainly to their Japanese rivals. What used to be called the Big Three controlled 60.2 percent of the market, a new low. Sales by Japanese makers grew to 28.8 percent of the market. (Europeans sold 7.2 percent of new cars and trucks, and South Korean makers had 3.8 percent.)

In Detroit, Nissan showed off new versions of its Pathfinder SUV and its Frontier pickup. Its Infiniti division unveiled its QX56 full-size utility vehicle.

More products are coming -- here and elsewhere -- Ghosn said.

On the brink of extinction in 1999, Nissan has made a stunning comeback. Ghosn predicts continued growth in the United States, Europe and China.

``We're not a niche player,'' he said. ``We're a generalist. We want to be a global, total player in the car industry. You can expect us every where.''

Both GM's Wagoner and Bill Ford said their companies' new products will lead to growth, too.

GM showed off a new Chevy Corvette, the Pontiac G6 mid-size sedan and the Pontiac Solstice roadster in Detroit. A few days earlier in Los Angeles, the company revealed its new Chevy Cobalt small car.

Ford took the wraps off its next Mustang as well as the Five Hundred sedan and Freestyle cross-over wagon. Both companies also displayed several concept models.

Those concepts, and exotic super cars like Ford's GT and DaimlerChrysler's ME Four Twelve concept, are ``the fun part of the industry, the sexy part,'' Ford said. ``That's one thing I think the people who look at this from only a dollars and cents standpoint will never understand. If you take the passion out of this business, if you take the emotion and the sex appeal and the fun out, you've ruined the business.''

For Ford, the Mustang is a key model. Full of history, the new 2005 version that goes on sale later this year should have much improved driving dynamics.

Ford says he'll get the first one off the assembly line.

``I would never let us get rid of the Mustang,'' he said.

Ford's new cars, from the Mustang to the Five Hundred, should make it a more relevant brand in California, Bill Ford said.

For GM, the key besides new products -- such as the Corvette and Cobalt, the Malibu sedan, the Equinox SUV and the Colorado pickup from Chevrolet -- is finding the appropriate length for product life cycles, Wagoner said.

``There's a balance. There's a sweet spot,'' said Wagoner, who admitted that some of his company's cars, like the small Cavalier, were allowed to get too old on the market.

As far as the future, ``this idea of trying to renovate and appropriately position our brands is an ongoing challenge,'' Wagoner said.

Hummer and Cadillac are doing well, while Chevy and Pontiac are poised for growth. Saturn, especially, needs work, he said.

For Bill Ford, his eyes are fixed on the future.

``I'm going to be here for a long time and my kids are going to be here for a long time. I can't run this company for the next quarter or whatever the herd mentality says we should be doing,'' he said.

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Source Matt Nauman mercurynews.com