By on March 30, 2009

Automakers are cutting second quarter production plans by double digit percentages, as the US auto market continues to contract. Automotive News [sub] cites CSM Global’s estimate that North American auto production will not top 2.07 million units, the lowest level since “at least” 1981. And though GM, Ford, Toyota, Nissan and Honda are expected to cut production in the 30-40 percent range, the worst news comes from Chrysler. The Cerburian dog is “selling the majority of their vehicles out of inventory,” says CSM’s Michael Robinet. “They are trying to get much more realistic about production levels.” How realistic? Expect a 60 percent cut in production for the second quarter, and under one million units of total North American production on the year, reckons CSM. That’s well below Chrysler’s 1.6m annual production plan from its original viability plan.

In Japan though, even weaker market conditions have the big boys of the US market cutting domestic production at Chrysler-level percentages reports Bloomberg. Toyota, Nissan, Mazda and Mitsubishi all cut production last month by at least 60 percent, caught between a 66 percent drop in exports to the US and a shockingly weak domestic market. Overall production is down 56 percent with even Honda lowering production by 48 percent. Analysts suggest that aggressive production cuts will set the stage for a late-2009 turnaround in both Japanese and North American production. With the Japanese and US auto markets still shedding sales and groping for a bottom-out, that analysis may well be on the optimistic side. When it does arrive, expect the turnaround to be a slow rebound, not a whiplash about-turn.

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12 Comments on “Industry Output Slashed Across The Board...”


  • avatar
    jkross22

    Living in LA, I see precious few new Chryslers. I wonder where exactly are they selling their cars and trucks.

    I would imagine 400-500k would be a more realistic number.

  • avatar
    jkross22

    Oh, and Toyota pulled their radio ads with people talking about how they just have to have that “hot new Highlander”, even though they’re upside down on their current car.

  • avatar
    DweezilSFV

    I despised that asinine commercial. “It’s hot. Like me.” UGH

  • avatar
    PickupMan

    Actually, I could see myself in a “hot new Highlander”….2009 model in August when they get really desperate to make space for a few 2010s.

    Stack the cash higher, I can still see over the top of the pile.

  • avatar
    NickR

    Funny, I was just thinking it’s the end of Q1, I wonder what the sales numbers are going to look like? Grim, methinks.

  • avatar
    gslippy

    A friend of mine is considering buying a NEW 2007 Solstice still languishing in a local lot. Needless to say, it’s heavily discounted. They also have new CX-7s in stock from 2007. Eeks.

    Just imagine a car dealer with new vehicles from 2007, 2008, 2009, and 2010 sitting on the lot at the same time.

    This situation reminds me of the I Love Lucy episode where she works on the candy-wrapping line:

  • avatar
    jerry weber

    This stunning announcement finally takes the veil of secrecy about the real projected sales numbers for 2009. No longer can the bankrupt big two show a plan with over 10 million cars being sold this year. This little trick of the recession will end in spring and numbers will come roaring back is fiction. With far less numbers and the domestics taking a lower percentage of that, there is no justification at all for these huge bloated industries to hang around for the recovery. It is even more perpelexing that when we had the big 14-16 million sales, earlier in the decade our domestic companies still could not make a profit. I know, next time will be different.

  • avatar
    GS650G

    Maybe the world doesn’t need so many new cars?

  • avatar
    Gforce

    gslippy

    Just imagine a car dealer with new vehicles from 2007, 2008, 2009, and 2010 sitting on the lot at the same time.

    Can you please clarify how it’s possible for any real-life manufacturerer to have a 2010 Model car? Given the fact that we are now (today) in March 2009 still (at least most of the world).

    If this is possible, then it helps to explain the gigantic inventories that dealers find themselves stuck with now.

  • avatar
    NickR

    gslippym if your friend has deep pockets I know of two Ford dealers with new 2006 Ford GTs. (One white, one red).

  • avatar
    gslippy

    Gforce:

    The 2010s will be out soon, if they aren’t already. My local Kia dealer already has the 2010 Soul in stock.

    Add NickR‘s 2006 Ford GTs to the mix, and you’d have 5 model years sitting around. Goodness.

    And that Ford GT is sweet – you know times are bad if Ford can’t unload those.

  • avatar

    NickR: No sale! He should repaint them pink.

    I’d love to have a GT (or two), can’t afford any though, just funny to mix the colors and have two pink GTs.


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