TRUCK OVERLOAD: AUTOMAKERS MISS THE MARK North American production for June is estimated to fall short of plan due to a cutback in trucks. Ward’s estimates June output to be tracking at 1.46 million units, even with year-ago and some 17,000 vehicles below what was scheduled for the period at the beginning of the month. The shortfall from plan is due entirely to trucks, which are coming up shy by an estimated 29,400 units. Cars are heading for output 12,300 units above plan. Much of the increase in cars is coming from General Motors Corp.’s estimated 17,800-unit overbuild. The automaker is missing the mark on trucks by nearly 19,000. If GM’s current marketing program offering employee discounts to all consumers is successful, and the signs are that it is lifting GM’s sales above forecast, it makes sense for the automaker to replenish its U.S. car inventory, which came into June 24.1% below year-ago. The two next biggest manufacturers, Ford Motor Co. and Chrysler Group, are building at or above their plans for cars. Ford, like GM, appears to be pulling in the reins on trucks, but Chrysler is headed for an overbuild of those vehicles. Overall, Ford is estimated to be about 5,000 units below plan, and Chrysler is nearly 11,000 above schedule. The rest of the major manufacturers all pulled back in June. Toyota Motor Mfg. North America Inc., Honda of America Mfg. Inc. and Nissan North America Inc. are pacing below plan by 2,600, 4,700 and 14,000 vehicles, respectively. Roughly two-thirds of Nissan’s cutback is in cars, while both Honda and Toyota’s slowdowns are centered in trucks. U.S. light-vehicle inventory of North American-made vehicles now is estimated at 3.16 million units, 9.3% below year-ago. Days’ supply is estimated at 63, compared with year-ago’s 76 and the prior month’s 64. A days’ supply of 60 for domestically produced light vehicles is typical for June 30. However, the estimate is based on a Ward’s Auto U.S. light-vehicle sales forecast of a 16.8 million seasonally adjusted annual rate (SAAR), which could be underestimating the market. If GM’s sales program is indeed lifting industry volumes above expectations, inventory will be lower than the estimate. About 7,000 units could be deducted from the inventory total for each 100,000 units higher than the 16.8 million forecast. Accordingly, days’ supply also would be lower by about one day for each 200,000-unit difference in the SAAR. Web source: www.wardsauto.com
