From ALV 2nd qtr report: In North America (2nd qtr), light vehicle production declined by 2% due to GM, Ford and Chrysler (�the Detroit 3�) cutting their production by nearly 9%. The Asian and European vehicle manufacturers increased their production by nearly 14%.
ALV forecast: 6% increase in N. America production in 3rd qtr.
From today's WSJ. Big three sales slip, but in the article, they say that they are not cutting back production schedules.
Weak Sales, Mixed Outlook Cloud Detroit's Path Big Three's Share Slips Below 50%, a First; Toyota, Honda Also Hit By MIKE SPECTOR and JOHN D. STOLL August 2, 2007; Page A3
U.S. auto sales downshifted to the slowest pace for July in nine years, leaving car makers to weigh high-stakes bets on when consumer demand will rebound.
Detroit's three big unionized auto makers also passed another grim milestone in July, as the combined share for their traditional U.S. brands, including Chevrolet, Ford and Chrysler, fell below 50% for the first time, according to figures compiled by Autodata Corp.
General Motors Corp. sales fell 22%, while Ford Motor Co. sales dropped by 19% and Chrysler Group suffered an 8.4% decline. The downdraft in demand wasn't limited to Detroit's beleaguered giants. Sales declined 7% at both Toyota Motor Corp. and Honda Motor Co. But Toyota managed to outsell Ford, while Honda outsold Chrysler Group.
WSJ's John Stoll reports that Toyota's sales decline may indicate trouble for the auto industry at large. July's seasonal annual selling pace was 15.54 million vehicles, according to Autodata, the lowest annual pace for the month since 1998. Auto makers sold 16.56 million vehicles in 2006. The severe downturn in home prices and construction in important regions such as California and Florida continues to damp vehicle sales, industry executives said. The continued housing-market weakness could cause annual industry sales to drop by several hundred thousand light vehicles for the year.
Some luxury brands, like Toyota's Lexus and BMW AG's flagship brand, remain bright spots, but the weak dollar continues to hurt BMW in particular. (Related article.)
In a gamble that customers could return, GM and Ford are still projecting no significant reductions in production schedules for the third quarter, after trimming output in past quarters. As well, neither player has resorted to the same major blowout clearance tactics used to inspire demand during summers gone by.
For GM and Ford, a sales recovery -- especially in the high-profit pickup-truck market -- is essential as both auto makers have built restructuring blueprints that hinge on stability in the market. At GM, there is optimism that pent-up demand will soon be unleashed, opening the opportunity for growth in its core market.
But as they begin to set production plans for the rest of the year, auto makers must try to make sense of conflicting data on the economy. The housing market's woes, and troubles in credit markets, point to a tough second half. Other indexes show consumer confidence gaining momentum.
I saw this in today's Indy Star. Looks like parts of the industry are doing OK. Cummins' sees a record this year.
July 27, 2007
Cummins' profits surge to record Shares climb as engine maker posts quarterly earnings and lifts full-year forecast Star report July 27, 2007
Cummins continues to break financial records despite a slump in demand for heavy trucks.
The diesel engine maker's stock soared Thursday when Cummins reported record earnings and raised its profit estimates for the rest of the year. Shares of the Columbus-based company already were up 87 percent for the year before it reported its second-quarter results early Thursday. The stock closed at $116.15, up 5.8 percent. The company said quarterly revenue climbed 18 percent from a year ago to $3.34 billion, led by strong engine sales for light-duty trucks, recreational vehicles, buses and construction vehicles. Cummins' power-generation business, which accounts for nearly 25 percent of total revenue, reported record results. Sales of commercial generators rose 33 percent from a year ago. Profit was $214 million, compared with $220 million a year earlier, when results were boosted by a $28 million tax benefit. Excluding the tax benefit, Cummins' profit rose 11 percent in the recent quarter. Earnings were $2.13 a share, far ahead of Wall Street estimates of $1.59 per share. Cummins raised its full-year earnings forecast about 18 percent a range of $7.15 to $7.65 per share. The previous estimate was $6 to $6.50 a share. The company said it expects a record profit this year. Cummins said this year it has increased its share in the slumping heavy-truck market to 33 percent from 27 percent just six months ago.