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Despite Solid July Sales, Ford CFO Sees US Auto Recovery at an End

Sedan, coupes already signal a slowdown, but trucks holding momentum.

by on Jul.29, 2016

Ford may see a weakening of the U.S. market but its F-Series is still delivering solid numbers.

U.S. auto sales have been taking some uncertain detours in recent months, May numbers tumbling before the industry showed signs of rebounding in June. Preliminary estimates, meanwhile, suggest the market will look good for July, the industry back on track for another record year.

But senior Ford officials say that we may be at the end of the line for the current recovery, with sales likely to begin another cyclical slide in the near-term.

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“The growth is over,” Ford Chief Financial Officer Robert Shanks told the Reuters news service. The executive separately told analysts and reporters that, “We see the second half being softer than the first half. Looking into 2017, we think we will see further softness.”


US Auto Sales Set to Hit Yet Another Record in 2017

The current, torrid pace of sales "cannot be sustained."

by on Nov.18, 2015

In some cases, dealers have been struggling with supply shortages as sales hit records.

The torrid pace of sales that should see the U.S. auto industry set a record this year is likely to continue into 2016, but next year could see the end of an unprecedented recovery after the worst downturn the industry has experienced since the Great Depression.

Sales are likely to begin “gently” leveling off next year after hitting an all-time peak of 17.7 million cars, trucks and crossovers, forecasts Steven Szakaly, the chief economist at the National Automobile Dealers Association.

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“The industry remains healthy and continues to grow,” said Szakaly, during a media conference call ahead of the start of the 2015 L.A. Auto Show. But he went on to warn that, “We’re also seeing the beginning of the end of what has been a tremendous amount of pent-up demand for light vehicles.”


Automakers Regain Momentum in April – Market Looking at Best in Decade

Power forecast sees industry making up ground after cold winter.

by on Apr.24, 2015

Trucks, like this Ford F-150 shown with CEO Mark Fields, continue to gain momentum in the US market.

Consumer demand for new vehicles during April is the best it’s been in 10 years, according to a new analysis by J.D. Power and LMC Automotive.

With the warmer, spring weather finally settling in across the U.S., total light-vehicle sales are projected to reach 1,463,700, a 5% increase compared with April 2014 and the highest level for the month since April 2005.  The total seasonally adjusted annual rate of sales, or SAAR, is expected to hit 16.6 million units.

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“The industry continues to outperform prior-year levels with respect to retail sales and transaction prices,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power. “The average new-vehicle transaction price so far in April is $30,680, on pace to achieve a new record for the month.” The current record was set in April 2014 when transaction prices averaged $29,948,” he said.


Global Auto Sales Expected to Near 90 Mil in 2015

“Slower, not lower,” IHS Automotive forecasts.

by on Feb.03, 2015

Ford has become one of the fastest-growing brands in China. But the market overall is slowing.

With the U.S. market continuing its rebound and Europe finally showing signs of recovery after a long economic slump, global auto sales are expected to reach a new record of nearly 89 million vehicles this year.

But with the Russian market slumping and China showing signs of a slowdown, IHS Automotive cautions, the pace of growth will be a “slower, not lower” 2.4% in 2015. All told, only two of the critical BRIC markets are expected to report sales gains.

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Already the world’s largest automotive market, China will continue to lead the way in 2015, IHS anticipates. But don’t expect the high double-digit growth that market had been experiencing earlier in the new millennium. The forecast is for something closer to 7%, which would still drive the Chinese market to sales of 25.2 million vehicles.


SUVs and Crossovers Now Outselling Sedans

“Trucks” now dominate American sales charts.

by on Jul.17, 2014

The shift to car-based crossovers -- such as the latest version of the Ford Explorer - has helped drive the ongoing boom of utility vehicles.

With the U.S. auto industry in full recovery mode, manufacturers are struggling to keep up with demand of some of their most popular sport-utility vehicles and crossovers which, for the first time, are now outselling conventional sedans, according to a new study.

Utility vehicles, whether traditional, truck-like SUVs, or more modern, car-like crossovers, accounted for 36.5% of the overall American market during the first five months of 2014, compared with 35.4% for sedans, long the dominant body style, according to an analysis of new vehicle registrations by IHS Automotive.  A year ago, sedans outsold “utes” 36.6% to 33.9%.

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“These vehicles offer the combination of appealing features associated with both cars and light trucks, including a higher seating position, higher ground clearance, softer ride, more interior space, optional four-wheel or all-wheel drive, and towing capacity, among others,” said HIS analyst Tom Libby.


Auto Inventories Bulging – Will Makers Cut Production or Launch Price Wars?

Trouble for manufacturers could be good news for consumers.

by on Dec.11, 2013

Dealers are seeing a build-up of inventory despite strong U.S. car sales.

The nation may be in the grips of a continent-sized cold spell but automotive sales continue to run hot, as they have for much of the year.  Still, November’s unexpectedly strong numbers only barely conceal the fact that manufacturers may have gotten a bit too ambitious trying to take advantage of the best new car market since before the economy went into a nosedive six years ago.

While there are a handful of hot new models, like the 2014 Jeep Cherokee and the ’14 Chevrolet Corvette, that are flying off showrooms almost as fast as they’re delivered from the factories, dealers around the country are reporting bulging inventories of many other products, such as the Acura RLX and the Ford Fusion.

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And that’s worrying industry planners and analysts alike.  In years past, the build-up would have been a recipe for trouble, makers playing a game of chicken by ramping up incentives to maintain sales and market share – even at the cost of profits. It was precisely that sort of strategy that helped nearly sink the Detroit Three as the U.S. auto market collapsed in 2009 and 2010.


GM’s Eroding Market Share Raises Concerns

Strong reviews do little to buoy GM’s position.

by on Nov.04, 2013

Even strong 3rd-party endorsements for products like the Cadillac ATS have failed to boost GM's share.

Despite winning wide praise for its improving quality and well-reviewed new products, General Motors has been steadily losing market share, and that is raising concerns about the maker’s competitiveness, according to a new report from the General Accounting Office, which continues to monitor the U.S. Treasury Department’s investment in the Detroit maker following its 2009 bankruptcy.

The Treasury took a majority stake in GM but has been rapidly selling down its shares in recent months and expects to sell off the last of its holdings by next April – with the latest government report estimating taxpayers will ultimately lose about $9.7 billion on the bailout.

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On the positive side, the GAO report said the globe’s second-largest maker “has shown increasingly positive financial results” since its emergence from Chapter 11 protection, with “positive and growing operational cash flow, and a stable liquidity position.”  On the downside, “However, GM faces continued challenges to its competitiveness. For instance, its market share of vehicles sold in North America remains smaller today than in 2008. Furthermore, GM continues to carry large pension liabilities,” the report noted.


Automakers Brace for September Sales Slide

But industry is still running ahead of early-2013 forecasts.

by on Sep.27, 2013

By a fluke of the calendar, Labor Day sales wound up in the August column this year.

Are the cool days of autumn coming faster than anticipated? Preliminary numbers suggest that the automotive sales boom, at least, is cooling down after a torrid summer that took almost everyone by surprise.

Though the industry won’t release final numbers until next week, the sales pace has clearly slowed during September, according to reports from both manufacturers and analysts alike. The seasonally adjusted annual rate of sales, or SAAR, is projected to fall from a hot 16.1 million units in August to something closer to 15.2 million this month.

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“September 2013 new-vehicle sales represent the first year-over-year drop since May 2011, due to slower retail sales, two fewer sales days in the month, and this year’s Labor Day sales included in August 2013 totals,” said Alec Gutierrez, senior analyst at Kelley Blue Book.

On the positive side, the summer surge means that 2013 is still likely to be the industry’s best year since before the nation’s economy collapsed – and sales seem on track to surpass the forecasts most experts made early in 2013 which called for volume to slide somewhere between 15.0 and 15.5 million.


Global Auto Industry on the Rebound

Smooth sailing ahead, analysts forecast.

by on Sep.23, 2013

Strong attendance at the Frankfurt Motor Show could signal an imminent upturn in the European market.

It’s been a tough few years for the auto industry, with the U.S. suffering its worst downturn in decades, Europe in a massive slump and even the booming Chinese market showing signs of a slowdown. But there should be smooth sailing ahead, industry analysts are predicting, as even hard-hit Europe shows signs of a rebound.

The U.S. is already having one of its biggest booms in years, and China’s car market is heating up again, Patrick Archambault, Goldman Sachs vice president of global research, said during a speech at the Society of Automotive Analysts, or SAA, conference in Detroit. The growth rates in worlds three big three markets will be in the “single digits” which is relatively encouraging, he said

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“There is nothing sinister lurking,” asserted Archambault. “The growth is still supported by the pent-up demand created during the down turn. The average age of vehicles has increased, creating what some people have referred to as a rolling scrapyard.”


US Car Market Boom Likely to Continue, Forecasts Senior Toyota Exec

But sales may not set new record, cautions Carter.

by on Sep.05, 2013

Toyota's Camry outpaced the already strong surge of the US car market last month.

August’s strong automotive sales surge seems to have taken everyone by surprise, including top managers at Toyota — demand for the Japanese maker’s Toyota, Lexus and Scion branded products jumping nearly 23% last month as the U.S. market reached its highest level in at least six years.

A variety of factors seem to be drawing buyers back to showrooms, suggested Bob Carter, senior vice president of automotive operations for Toyota Motor Sales, USA. But one stands out, “Consumer confidence,” he said succinctly. “People are feeling good,” and are increasingly willing to open up their pocketbooks again.

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Industry analysts and observers have been steadily raising their forecasts for 2013 and beyond, and Toyota is no exception. After the worst industry downturn in decades, demand is likely to top 15.5 million this year, and could nudge into 16 million territory in 2014. But how high is up? Speaking to the Detroit Automotive Press Association, Carter noted some forecasters anticipate near-record numbers of 17 million by as early as 2018.