North American production is slightly behind schedule for May and manufacturers are expected to finish the month nearly 21,000 units below plan, a 1.2% shortfall (see data p.7). That gap is not surprising considering the industry built to 102% of plan in April and 101% in March, and it is not significant enough to hurt overall inventory levels or indicate manufacturers are anticipating a slowdown in the next few months.
May North American output is projected to finish at 1.69 million units, or 98.8% of what was scheduled at the beginning of the month. May's estimated output also is 10.8% above same-month 1999 and one of the strongest months on record.
Each of the Big Three manufacturers is expected to finish below plan withCorp. and DaimlerChrysler Corp. (less Mercedes) both on track to build to 97.9% of their slates.
The downturn at DCC is not unexpected, as it recently decided to cut overtime at plants assembling the Dodge Durango and Jeep Grand Cherokee. At the same time, DCC is running regular overtime at its U.S. car facilities in order to stockpile inventory. Belvidere, IL, (Neon) has an early vacation shutdown tentatively slated to begin the last week of June, and Sterling Heights, MI, closes in mid-June for about one month for changeover to the company's restyled midsize sedans.
GM's under-build is due to a shortfall in truck output, which is more than offsetting an overbuild in cars. Nevertheless, GM continues to run steady overtime at nearly all its truck plants, with emphasis on full-size pickups and large sport/utility vehicles (SUVs). Also, its Mexico output, alone, is close to schedule, which likely means the production ramp-up for the new Pontiac Aztek at Ramos Arizpe is going smoothly following its April start-up. But GM needs to do some stockpiling, too, as its Arlington, TX, (large SUVs) and Flint, MI, (full-size pickups) plants will be down from July until late summer for changeover to the GMT 800 platform.
Motor Co. is tracking at 99.3% of plan, and it likely would have been closer to 100% if the May 22 Job One date for the new Ford Escape was not pushed back.
Meantime, forecast month-end inventory for domestically made light vehicles has been revised to 3.197 million units, 6.4% above year-ago and a 2.4% decline from the prior month. The projected days' supply is 56, compared to year-ago's 55 days' and April 30's 65 days'.
|Cars||Trucks||Total Vehicles||Net Chg. (Units)|
|Est.||% Sched.||Est||% Sched.||Est.||% Sched.||Car||Truck|
|TOT. NON-BIG 3||268,200||100.0||143,900||100.3||412,100||100.1||100||500|
|Est. is estimated output for the current month by Ward's. |
% Sched. is the percentage the estimate equals of scheduled production for the month. Trucks includes medium- and heavy-duty makes. Manufacturer totals include Mexico output.