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When economic recovery comes, more cars will be sold.

That steadfast belief has been enough to jump-start automobile stocks at a time when hard sales evidence to back up that optimism is lacking.High hopes are preferable to current reality, which consists of massive layoffs of U.S. auto workers, plant closings and accompanying anti-Japanese sentiment.

Stocks of carmakers are always a tricky proposition, since they're inextricably tied to the economy and consumer sentiment. You can find plenty of conflicting opinions among equity analysts on whether to praise or pan their prospects.

"It looks like vehicle sales are bottoming out, though gains often seem imperceptible," said Joseph Phillippi, auto analyst with Shearson Lehman Brothers. "Consumer confidence remains shaky, and no significant improvement in sales is likely until the second half of the year."

Chrysler rates Phillippi's strong "buy" recommendation, while General Motors and Ford receive his midlevel "buy." By year-end, he expects Chrysler stock to hit the mid-$20s, GM the mid-$40s and Ford the lower $40s.

"Day by day, everyone will be trying to time the economic recovery," observed John Hilton, auto analyst with Argus Research Corp. "Unfortunately, even an economic recovery won't solve the problem that the three U.S. carmakers have competing with Japanese manufacturers."

Hilton recently upgraded GM from a "sell" to a "neutral" rating on the basis of its sales strength in Europe. He maintains his longstanding "sell" opinions on Ford, due to its difficulties in Europe, and Chrysler, because he doesn't feel comfortable with any company whose long-term viability is in question.

"U.S. carmakers will never sell more cars in Japan unless they decide to cater to the Japanese market, which they aren't doing now," said Richard Ozaroff, foreign auto analyst with the Value Line Investment Survey.

"The use of more U.S. parts by Japanese carmakers will definitely increase, though some suppliers may not like the traditionally strong control that the Japanese exert over the making of such parts."

Ozaroff isn't doing handsprings over the stock prospects of Japanese carmakers, expecting Toyota and Nissan to be average stock performers and Honda below average. Despite the fact the Japanese have done an excellent job in securing customer quality satisfaction, the car market is weak and hurting profits.

Since there's a limit to how many cars the Japanese will be allowed to sell abroad, they're maximizing revenues by increasing prices, Ozaroff noted. They can make up-scale cars at lower cost than European and American competitors, while generating good profit margins. So, increasingly, they'll be emphasizing the higher-ticket market.

If you go along with the positive side of the auto equation, here's the logic behind Phillippi's recommendations:

Chrysler at long last has solid all-new products to offer. The Grand Cherokee, which Phillippi has test-driven, makes its debut Easter Sunday and should garner a chunk of the market that has gone to Ford Explorer. It is being built in a new Detroit plant which uses fewer workers. Meanwhile, Chrysler's "LH" full-size passenger car, built in Canada, arrives Oct. 1. It should hold up well against Ford Taurus and Honda Accord, Phillippi believes. Next year, there will be a new pickup truck and the "PL" sub-com-pact.

"Chrysler still has big debt bullets to bite, but the rating agencies are realizing that the company is becoming more Honda-like in its ability to do new products on a short schedule," Phillippi explained.

GM has a hit in its Cadillac Seville STS, which is competitive with foreign luxury cars. There are strong new truck products in the Chevrolet Suburban and Blazer. The jury is still out, however, on the new Grand Am, Skylark and Achieva models.

"It will take the 1990s to fix GM, but chairman Robert Stempel has done more to reorganize the company than anyone ever has before," said Phillippi.

Ford will "soldier on" with no really new models, awaiting the new Mustang in 1994-1/2, Tempo in 1995 and Lincoln Continental in 1995. While the new Taurus is doing all right, it might have had more sales pull had it been more extensively redesigned, he believes.

"Still, Ford's biggest problems are in Europe, not the U.S.," he concluded.