Auto sales: Ready to shift into overdrive

FORTUNE -- It has been a dismal three-plus years for U.S. auto sales.

After a halcyon stretch early in the 2000s, when annual sales of cars and light trucks topped 16 million for nine straight years -- and even poked above 17 million at times -- they have been sharply depressed.

Sales tumbled to 13.2 million in 2008 and then fell all the way to 10.4 million in 2009, helping to send General Motors and Chrysler into bankruptcy.

Since then, sales have improved slightly, recovering to 11.6 million last year -- but still well below long-term trends.

Now, in a surprisingly upbeat forecast, economist George Magliano of IHS Global Insight sees better times ahead -- much better, in fact.

In a presentation in advance of the New York Auto Show, Magliano presented an optimistic case in which auto sales climb a staircase upward: 14.7 million in 2012, 15.8 million in 2013, 16.5 million in 2014, and a heady 17 million in 2015.

Even better, the IHS Global Insight outlook has production matching sales much more closely than in the past, which means better capacity utilization and less need for incentives.

That would produce a shower of profits for General Motors (GM) and Ford (F, Fortune 500), both of which made billions of dollars at last year's sub-par sales levels. It should also pull Chrysler solidly into the black.

The case for such a sharp snapback in sales is not as extreme as some might think. The average new car remains in service for 9.9 years, after which it must be replaced with another new car. Years of below-average sales create pent-up demand that must be satisfied as long as automobiles remain a primary mode of transportation.

Magliano underpins his vehicle sales forecast with a picture of a healthily expanding economy: Normal economic growth of roughly 3% per year in takes hold, while two million new jobs are created annually; meanwhile consumer spending returns as consumption rises 2.0% - 2.5% per annum.

Two other macroeconomic factors contribute to the rosy scenario: Non-farm employment is forecast to rebound from its recession lows, boosting consumer confidence along with buying power; meanwhile, the driving-age population -- people aged 16 to 85 -- is poised to rise as well.

Other factors that will lift sales, according to Magliano, include a loosening of auto loan lending requirements since credit scores are declining -- and a tightening of used car inventory.

Lower new car sales in the past few years have shrunk used car supply, thereby pushing prices up and dampening the spread with new cars.

Magliano calls this his optimistic forecast, with a 20% probability, but even his pessimistic take has sales poking above 14 million in 2013 and peaking above 15 million in 2016.

Despite his rosy prediction, there are plenty of bumps ahead. Magliano's forecast sees pickup truck sales falling off while sport-utilities get hammered; both have been big profit generators in the past. He believes their market share will be taken over by lower-margin small cars and crossover vehicles.

And while the medium term looks bright, the short-term outlook isn't so pretty. Magliano is taking down his 2011 forecast to 12.9 million autos sold from 13.3 million.

Higher oil prices account for a reduction of 150,000 units. And disruption of production and parts coming from Japan will cost another 200,000. Over the weekend, Toyota let it be known that it won't return to full production until November.

Magliano figures there will be 16 weeks of production losses by Japanese manufacturers due to the earthquake and flood, followed by nine weeks of stabilization and then 17 weeks of catch-up through the end of the year that he calls the volume compensation phase. The slowdown will affect Japanese production all over the globe, but especially in the home market.

To be sure, any number of outside events could upend this forecast, ranging from another oil shock and stricter fuel-economy regulations to an unspecified natural disaster.

But left uninterrupted, the natural economic cycle should mean a return to halcyon times for automakers.