Bad News—and Lots of It—for U.S. Auto Production, Sales

Robert Farago
by Robert Farago
bad newsand lots of itfor u s auto production sales

Start with this: Automotive News [sub] reports that FoMoCo is set to out-produce cross-town rivals General Motors this year. This according to auto industry analysts IHS Global Insight. “Ford will rank first with North American production of 1.9 million units, a 17.7 percent decrease from 2008, IHS said. GM, which is shutting most of its plants as it braces for a possible June 1 bankruptcy, will build 1.7 million vehicles, about half as many as it did last year.” A fifty percent production decline. Whoa. And what’s with the probable on the GM C11? AN should’ve saved the modifier for GM’s projected production; it’s entirely possible they won’t even build that many. Especially if/when Nissan/Renault buys-up the bits. As you might imagine, “new” Chrysler keeps on slipping, slipping; into the man-u-re . . .

Chrysler’s projected 903,191-unit output will be a decrease of more than half. Honda Motor Co. will replace Chrysler in the No. 3 slot by producing 1.1 million vehicles, and Toyota Motor Corp. will finish fourth with 904,262 units built, IHS said.

Keep in mind, this is North American production. All these automakers are importing cars from abroad. But the bigger picture is just as bleak as the zoom in.

The projections reflect the cuts IHS made last week to its industrywide outlook. The new forecast, 8.4 million units, is a reduction of another 156,000 units from last month’s estimate. The forecasting firm is expecting a 32.9 percent decrease from 2008 production of 12.6 million units. Low production reflects poor U.S. sales, which have fallen 37.4 percent through April.

Now, sales. And oh man, GM and Chrysler are taking a hammering. J.D. Power & Associates says US May auto sales declined about 35 percent (compared to a year earlier). So far. Automotive News [sub] also reports that IHS Global predicts that Toyota will edge out GM as America’s number one car brand/brands sometime next year. GM will hold its title this year with a 17.9 percent share. In ’09, Toyota’s projected 17.6 percent share will top GM’s 17.3 percent.

And while you’re in husker du mode, someone on this website predicted a Seasonally Adjusted Annual Rate (SAAR) of eight million units. IHS Global Insight reckons I’m off by a million. But we both agree: it’s going to get worse. And stay worse.

Seasonally adjusted annual sales rates, which fell from 15.4 million units in February 2008 to 9.1 million a year later, will not improve much this year, the forecasters said. Last month, SAAR had improved to 9.5 million units — and that’s what it will average for the year, they said.

Annual sales won’t match 2007 levels until 2013, [IHS director of North American automotive research George] Magliano said. But that won’t represent a full recovery, as a rising population of U.S. vehicle operators will reduce the number of sales per driver.

Said Magliano: “Essentially, what we’re looking at here is something that falls further and doesn’t come back” all the way.

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  • on May 22, 2009

    [...] Bad News—and Lots of It—for U.S. Auto Production, Sales | The Truth About Cars [...]

  • Raidergoo Raidergoo on May 22, 2009

    Suppose that the economy turns around, and soon. Suppose that the car companies figure out how to sell Obamamobiles at a profit, and soon. Suppose that the general public wants to, can afford and will buy 10-12 million Obamamobiles, and soon. Will the Congress and the Administration allow Big Auto to make obscene profits? What will be the effective tax rate on said obscene profit? Who gets dibs on the obscene profits?

  • Art Vandelay I’d grab one of these if I’d spent my working life at GM for sure!
  • Analoggrotto The factory is delayed due to an investigation of a peter puffery ring lead by VoGhost, Tassos, EBFlex a Chevrolet Volt.
  • FreedMike Looking forward to the protests at the factory accusing Toyota of excessive woke-ism. First,, grooming. Lord help us all.
  • MrIcky I remember when Gladiators came out and everyone was shocked at how expensive they were. Now all the off road specials have caught up or passed it financially. I like this truck a lot, but I'd still take my Rubicon over this. I'd take this over the Ranger Raptor or Tacoma TRD though. When I found out the increase in track for the new TRD was just wheel offset-I knew they were just phoning it in. Why spend so much R&D on those stupid seats when you could have r&d'd longer arms or a front locker.
  • Alan Hmm, I see a bit of politicking here. What qualifications do you need to run GM or Ford? I'd bet GM or Ford isn't run by experienced people. Anyone at that level in an organisation doesn't need to be a safety whip, you need to have the ability to organise those around you to deliver the required results.