A multitude of factors will cause North American production over the remainder of the year to be the lowest for the period in 10 years, according to the latest report from Ward's AutoForecasts. A strong first quarter, however, will keep the calendar year comparison to five-year low.
Production in the first quarter of 2006 totaled 4.29 million units, compared with 4.09 million in first quarter of 2005, and the highest for the period since 4.8 million in 2000.
Production for the remainder of the year will total 16.05 million units, 1.6% below 2005 and the lowest since 2001, according to Haig Stoddard, Manager, Industry Analysis for Ward's Automotive Group, publisher of Ward's AutoForecasts. The remainder of 2006 will fall to its lowest aggregate level since 1996.
Part of the issue is due to slowdowns at the market's two biggest automakers, General Motors Corp. and Ford Motor Co. Both have been particularly hard hit by the market shift away from midsize SUVs. To shore up profit margins, both have cut back on incentive spending and sales to rental fleets. Additionally, the two have cut production capacity through plant closures and shift reductions at selected facilities.
GM and Ford's available straight-time output for the year will be reduced by approximately 500,000 units compared with 2005. In spite of this, industry capacity as a whole will drop by just 100,000 units from prior-year due to increases by most of the remaining manufacturers.