Market Snapshot


Despite pumped-up production schedules in recent weeks, North American June output will trail last year’s pace by 8.3%, according to a recent article. Ward’s Auto forecasts manufacturers will assemble 1,394,600 vehicles next month based on 21 production days, somewhat under the industry’s planned 1,403,000 units. Output in like-2006 totaled 1,521,101 units, with one additional production day.

However, boosted by healthier production rates than seen in the year’s first three months, Ward’s Auto is forecasting second-quarter North American output to surpass first quarter by more than 7.0%, based on a daily build rate, with volume rising from 3,937,354 units to 4,177,072.

While Ford Motor Co.’s Wixom, Michigan, plant will close this month, output of its re-badged Taurus sedan and Taurus X CUV, which are replacing the Ford Five Hundred and Freestyle, will more than offset the lost production. General Motors Corp. is ramping up production of the new 2008 Saturn Vue at its Ramos Arizpe, Mexico, plant and Honda of America Manufacturing Inc. has added more Civic sedans in Canada. These additional builds, along with a bump up in inventories as many automakers prepare for model-year changeovers this summer, will contribute to a stronger second-quarter slate.

Still, compared with prior-year’s production that yielded 4,274,339 units, second-quarter 2007 output will trail the same period in 2006 by 2.3%. Detroit’s Big Three will build fewer vehicles in June than the prior year. Ford output will drop 17.9% to 264,802 units, Chrysler Group’s production will decline 15.1% to 239,190 and General Motors Corp.’s output will fall 14.6% to 391,711.

In keeping with rising sales trends among foreign-based manufacturers, Toyota Motor Manufacturing North America Inc., Nissan North America Inc. and Honda all are forecast to step up production in June. Nissan, now assembling the Versa subcompact in Mexico, is forecasted to increase North American output 23.6% in June over prior-year. Toyota will outpace last year’s 7.4% and Honda will increase its builds 2.9%. Other foreign-based automakers will see a combined 5.0% gain in June.

Capacity utilization also will drop in the month, with North American manufacturers only using a combined 84.1% capacity, compared with 87.5% in like-2006. The largest decline will be in Canada, from last year’s 91.3% to 80.8%. Among the automakers, Chrysler’s capacity usage will see the biggest drop in June, from last year’s 91.6% to 77.3%. The cutback is a reflection of the automaker’s continuing attempt to better align production with demand in order to reduce inventories and return to profitability.

Ward’s Auto is forecasting production in the year’s first half to finish 5.2% behind like-2006, to 8,114,477 total assemblies from prior-year’s 8,561,519.

Source: Elnick, Diane. (May 18, 2007). “June North American Production to Fall Below Last Year’s.” Retrieved May 18, 2007 from