Industry Output Slashed Across The Board

Edward Niedermeyer
by Edward Niedermeyer
industry output slashed across the board

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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4 of 12 comments
  • Gforce Gforce on Mar 31, 2009
    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.

  • Nick Nick on Mar 31, 2009
    gslippym if your friend has deep pockets I know of two Ford dealers with new 2006 Ford GTs. (One white, one red).

  • SCE to AUX SCE to AUX on Mar 31, 2009
    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.

  • SexCpotatoes SexCpotatoes on Mar 31, 2009

    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.