DETROIT — U.S. automakers have used the recession to shed excess capacity, a move that puts them in a positive position for future profitability, according to Sudarshan Mhatre, senior analyst with PricewaterhouseCoopers' Autofacts and a featured presenter at the Automotive Economic Forecast and Financial Forum, which will be held May 10-11 in Chicago. 

"As a whole, the U.S. auto industry managed to significantly reduce costs across the entire value chain and lower the break-even volume considerably," said Mhatre. "This has positioned surviving restructured and/or right-sized entities to realize profitability as soon as the first meaningful uptick in sales takes place." 

Mhatre will discuss the state of both U.S. and global automotive markets in detail during his presentation, which will take place at 9:45 a.m. on May 11, the second day of the Automotive Economic Forecast and Financial Forum in Chicago. 

While he feels the U.S. auto market is largely well-positioned, Mhatre noted that European markets employed wide-ranging scrappage schemes to help them weather the downturn and, as a result, did not address the systemic issues of excess capacity and fragmentation. 

"These issues will continue to challenge the profitability and overall health of the European auto sector in the years to come," he noted. 

Mhatre added that one surprise in the U.S. auto market in 2010 has been the way in which consumers have bucked conventional wisdom, taking on more debt for longer periods of time. 

"Conventional wisdom would suggest that consumers would be wary of taking on higher debt loads, given the recent debt-driven economic collapse," said Mhatre. "To the contrary, consumers are financing larger portions of their vehicle value (up to 92 percent) and extending loan maturities well over 60 months." 

Mhatre said that lenders have also defied expectations, returning to some of the same practices that played a role in their financial instability. 

"The U.S. market is already witnessing the return of zero-percent financing, low down payments and gradual increases in cash incentives," he said. "Leasing is also coming back stronger than expected. Monitoring and controlling these practices will be crucial to the overall health of the industry going forward." 

Click here to view the full Q&A with PricewaterhouseCoopers' Mhatre. For more of Mhatre's insights on the automotive industry, register now for the Automotive Economic Forecast and Financial Forum, which will take place May 10-11 in Chicago at the Marriott Downtown Magnificent Mile. 

In addition to Mhatre, the lineup of speakers currently includes:

—Ellen Hughes-Cromwick, chief economist, Ford Motor Co.

—Mark Vitner, managing director and senior economist, Wells Fargo Securities.

—William Strauss, senior economist and economic advisor, Federal Reserve Bank of Chicago.

—Bernard Swiecki, director of market analysis, Center for Automotive Research. 

Attendees who register for the conference before April 12 will receive the early-bird registration rate of $695. After that time, the cost to register goes up to $795. 

The event is designed for automotive industry executives, banking and finance industry executives, allied industry executives, dealer group executives, supplier and aftermarket executives, economists, and analysts from a broad spectrum of new and pre-owned automotive sales, manufacturing, leasing, financing and aftermarket arenas. 

Registration, hotel and travel information, sponsorship details, the latest news about the conference and agenda information are available online at http://www.automotiveforecastforum.com/. 

For more information about the event, contact Marilu McQuilkin, director of meetings and events, at (800) 608-7500 or mmquilkin@sacherokee.com.