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Automakers Short of Capacity as US Market Rebounds

Paying the price for recession cutbacks.

by on Aug.08, 2013

Workers on the Toldeo line prep a new Jeep Cherokee.

Even with new plants coming on line in Mexico, the North American auto industry is rapidly running up against the limits of its capacity as manufacturers struggle to keep up with the demand for new vehicles.

But after losing billions in the run-up to the last recession, and then responding with massive factory cutbacks, automakers are reluctant to build capacity back up – only to find themselves in the same mess the next time the economy cools, analysts noted during the Center Automotive Research’s annual Management Briefing Seminar in Traverse City.

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“This is a very new space for the industry,” said Jeff Schuster,  senior vice president for forecasting for LMC Inc., who noted that with the memory of the Great Recession still fresh, manufacturers are wary of adding back new plants.

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Nissan Bucks Trend with Profit Gain

Japanese maker expects full production by October.

by on May.12, 2011

Nissan CEO Carlos Ghosn reports increased earnings but forecasts a loss in market share.

Nissan has become the only one of the major Japanese automakers to post an increase in earnings for the January to March quarter, profits rising 7.2% despite the impact of the March 11 earthquake and tsunami that virtually shut the Japanese auto industry down.

The maker also reported that it expects to be back to full production at its home and foreign-based assembly operations by October, one to two months before arch-rival Toyota, which on Wednesday reports a 77% decline in profits due to a mix of factors including the March disaster and a sharp rise in the Japanese yen.

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Nonetheless, Nissan, like its Japanese competitors, has been hard hit, and “We’re going to have to accept the fact that in some markets we’re going to have significant losses in market share,” acknowledged CEO Carlos Ghosn.

Nissan reported a quarterly net profit of 30.8 billion yen, or $347.5 million, compared with a loss of 11.6 billion yen.  It also announced an 88.6 billion yen, or $1.1 billion operating profit for the final quarter of the Japanese fiscal year, which ended on March 31.

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