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ANN ARBOR—Amid consumer concern over the rising prices of new cars and trucks, auto industry experts predict a modest sales increase over the next 10 years—even though real prices are expected to increase by about 20 percent during that time, says a University of Michigan researcher.

” There has been a great deal of talk lately that vehicles are becoming too expensive and that the price of new cars and trucks is outstripping the incomes of potential buyers,” says Jeff Davis of the U-M Transportation Research Institute‘s Office for the Study of Automotive Transportation and author of the marketing volume of the eighth annual U-M Delphi Forecast and Analysis of the North American Automotive Industry.

” Despite rising prices, the outlook for the industry as a whole is favorable, which is comforting news to industry leaders and analysts, who fear the impact of higher new vehicle prices and greater availability of nearly new used cars could have a depressing effect on sales of new cars and trucks.”

According to the report, which polled more than 300 automotive experts on trends in marketing, materials and technology in the next decade, the average price of a new domestic vehicle is expected to rise 9 percent to $20,000 by the year 2000 and another 10 percent to $22,000 in 2005, excluding inflation.

By comparison, the average cost of imports is projected to increase 4 percent by 2000 and 14 percent by 2005, although foreign vehicles are still expected to be priced higher, on average, than those made by Chrysler, Ford and General Motors.

Davis says that price changes of vehicles will vary by passenger car (entry-level, intermediate and luxury) and light truck (pickups, vans and sport utility vehicles) segments and manufacturer’s country of origin.

With regard to factors that influence vehicle-buying decisions, the forecast shows that purchase price will continue to be the most important attribute for entry-level and intermediate car, van and pickup buyers, while also rating highly for SUV buyers in the next 10 years.

” This kind of information is invaluable in the dawning era of brand management,” Davis says ” The brand manager marketing a small, entry- level vehicle should be interested to know that purchase price and fuel economy will remain the two most important considerations, but that promotional incentives, like rebates, which are important to the economy car buyer in the near term, may become less important in the long term.”

” Similarly, theintermediate sedan buyer especially values purchase price, quality and interior space, but rates product technology as unimportant in the purchase decision. However, luxury buyers value high-tech features much more than family sedan buyers do,” he adds. ” We may be approaching an upper limit for incorporating expensive gadgets on vehicles intended for medium-priced intermediate buyers.”

The forecast calls for projected annual U.S. vehicle sales to increase 8 percent to 16.4 million by 2005 (9.5 million cars and 6.9 million trucks). The increase in sales for pickups, vans and sport utility vehicles over the next decade is expected to be about 13 percent, compared with a 6 percent predicted rise in annual passenger car sales.

Other projections made by the forecast include: longer periods of new vehicle financing; more one-price, no-haggle retailing; an improved buying process and ownership experience for consumers; significantly longer average age of vehicles on the road; greater length of ownership by new car and truck buyers; increased personal leasing of vehicles; and greater recreational and vacation use of vehicles, especially pickups, vans and sport utility vehicles.

The report also addressed aspects of vehicle design and engineering, worldwide production and exports, vehicle attributes and features, and supplier and sourcing issues.