Auto Production Headed for 10-Year Low

November’s North American production outlook is revised slightly upward, although Ward’s AutoForecasts still calls for a downturn (8.5%) from year-ago, to be followed by an 8.8% decline in December.

Ward’s AutoForecasts calls for overall production for 2006 to end at a 10-year low. November’s revised output forecast calls for an additional 23,000 units from last month’s outlook to 1.247 million. Most of the add-on is spread out among several automakers.

December production should reach 1.063 million vehicles, compared with year-ago’s 1.166 million.
In the U.S. alone, production is forecast to decline 8.1% and 9.4%, respectively, in November and December.

November’s seasonally adjusted annual rate (SAAR) of production now is forecast at 10.8 million units, up from October’s 10.5 million but well below 11.7 million one year ago. The December SAAR equates to 11.0 million, compared with 2005’s 11.2 million.

The fourth-quarter U.S. SAAR is 10.7 million units vs. prior-quarter’s 10.9 million and year-ago’s 11.8 million.

North America will end 2006 at 15.78 million units, 3.3% below 2005’s 16.32 million and the lowest output since 15.45 million in 1996.

By country, the United States will produce 11.20 million vehicles in 2006, 6.2% below 2005 and a 13-year low. Canada’s output is forecast to slip 4.7% from a year ago to 2.56 million, a sharp contrast from the peak 3.06 million in 1999.

Mexico’s plants will buck the trend with a forecast 19.6% increase over last year, topping 2 million for the first time. Mexico’s output is expected to total 2.01 million units, compared with year-ago’s 1.68 million, besting the previous high of 1.92 million in 2000.

New products from the ’06 model year have helped the Mexican surge. Ford Motor Co. S.A. de C.V.’s 162% jump in output from 2005 largely is due to its Hermosillo plant, where production of the Ford Fusion and Mercury Milan began in late 2005 and a third shift was added in January.
The third vehicle in the trio of sedans, the Lincoln Zephyr, ceased production in June, and its successor, the Lincoln MKZ, was launched the first weekend in September.

Production of the Chevrolet HHR CUV spurred a significant gain for General Motors de Mexico S.A. de C.V.

Canada’s results were hindered by a decline in demand for minivans offered by Ford Motor Co. and DaimlerChrysler AG, both of which build the vehicles at plants in Ontario. A drop in production of large pickups at General Motors Corp. also contributed to the decline.

U.S. output in the year has been hurt by declines nearly across the board. Ford is forecast to see a 16.6% drop in its U.S. output, while DC, GM, Nissan North American Inc. and Toyota Motor Engineering and Mfg. North America Inc. also will record declines compared with 2005.

A reduction in the output of SUVs and pickup trucks primarily is responsible for the falloff. North American production is expected to rise slightly in 2007 in Canada and Mexico and stay relatively flat in the United States.



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