1. Michigan 1 Motor Vehicle Outlook FTA Revenue Estimating Conference Waterville Valley, New Hampshire September 25, 2000 Mark Haas, Director Jeffrey Guilfoyle, Economist Office of Revenue and Tax Analysis Department of Treasury State of Michigan

2. Michigan 2 U. S. Automotive Outlook What Affects Auto Purchases Changing Auto Market Shares of Production U. S. Automotive Outlook

3. Michigan 3 Factors Affecting Auto Sales Ability to Buy

4. Michigan 4 Real Disposable Income Growth Source: U.S. Bureau of Economic Analysis

5. Michigan 5 New Domestic Car Prices Stable Sources: AAMA & Automotive News, Market Data Book 2000 Import $30,347 (-5.1%) Domestic $18,724 (0.8%)

6. Michigan 6 Low Interest Rates Help Sales Source: Comerica Bank 7.84% 17.78%

7. Michigan 7 Best Affordability Since 1980 Source: Comerica Bank Economics Department 24.4 weeks in 1999 23.1 weeks 1st half 2000 22.9 weeks in 1979

8. Michigan 8 Consumer Debt Payments Installment, Mortgage & Auto Leases Source: Michigan Department of Treasury 14.8% 2000

9. Michigan 9 Factors Affecting Auto Sales Willingness to Buy

10. Michigan 10 Consumer Car Buying Attitudes Source: University of Michigan, Survey Research Center, July 2000 158 144

11. Michigan 11 Vehicle Age Declining 1999 Median for Trucks 7.2 years 1999 Median for Cars 8.3 years Source: Automotive News, 1999 Market Data Book

12. Michigan 12 Vehicles Per Household 1.90 1.22 1.81

13. Michigan 13 Oil Prices Rising Source: Monthly Energy Review, Standard and Poor’s DRI $27.10 $35.24

14. Michigan 14 More Dependent on Petroleum Imports Source: Monthly Energy Review Total 56.6% All-OPEC Persian Gulf

15. Michigan 15 Stock Market Growth Slows Aug-00 1518

16. Michigan 16 Demand For Motor Vehicles Trend Wealth Effect Economic Conditions Price Incentives

17. Michigan 17 Trend Vehicle Sales Trend Source: Michigan Department of Treasury Sales

18. Michigan 18 Motor Vehicle Production Capacity Utilization Worker Bonuses Occupational Mix Changing Improved Vehicle Production Management Improved Vehicle Demand Management

19. Michigan 19 1999 Production and Capacity North America Source: Automotive News, 2000 Market Data Book 92% 111%

20. Michigan 20 Big 3 Profit Sharing Checks Source: Ward’s Automotive Reports Daimler Chrysler Ford $8,000 GM $1,775 $8,100

21. Michigan 21 Occupation Mix Shifts in Michigan’s Vehicle Industry Source: Bureau of Labor Statistics & Economy.Com 21.8%

22. Michigan 22 Improved Vehicle Production Management Source: Bureau of the Census 0.52

23. Michigan 23 Improved Vehicle Demand Management Source: Ward’s Automotive Reports, Economy.Com, WEFA 25.2% 35.7%

24. Michigan 24 2000 Forecast Accuracy

25. Michigan 25 Light Vehicle Forecasts

26. Michigan 26 U. S. Motor Vehicle Outlook Car and Light Truck Sales Forecast Source: University of Michigan, RSQE, August 2000 Forecast

27. Michigan 27 U. S. Motor Vehicle Outlook Car Sales Forecast Source: University of Michigan, RSQE, August 2000 Forecast

28. Michigan 28 U. S. Motor Vehicle Outlook Light Truck Sales Forecast Source: University of Michigan, RSQE, August 2000 Forecast

29. Michigan 29 U. S. Motor Vehicle Outlook Summary Record Level Sales Vehicle Mix Continues to Shift Income and Affordability Key to Sales Near Capacity Production Oil Prices and Stock Market Uncertain

30. Michigan 30 Motor Vehicle Outlook FTA Revenue Estimating Conference Waterville Valley, New Hampshire September 25, 2000 Mark Haas, Director Jeffrey Guilfoyle, Economist Office of Revenue and Tax Analysis Department of Treasury State of Michigan