August Output Robust

North American vehicle production in August is expected to continue at relatively high rates, with 1,545,130 units surpassing year-ago's 1,464,517 for a 5.5% gain, Ward's forecasts.

Mexico's 23.8% surge in passenger-car output will be a major contributor to the increase, followed by a 14.3% rise in U.S. light-truck production. Canada also will play a significant role, with car output climbing 4.8% and light trucks gaining 10.3%.

The robust forecast is due in part to this year's contract negotiations between Detroit's Big Three and the United Auto Workers union that formally opened in July and are considered crucial to the survival of the U.S. industry.

With the possibility of a strike looming over such key bargaining issues as health care and wages, auto makers likely will be looking to build up inventory.

However, a significant portion of the increased output is expected to come from full-month production of new models launched earlier this year or after August last year at lower volumes.

Ward's forecasts Chrysler Group will produce 285,484 vehicles in August, for a whopping 20.0% gain over year-ago's 237,811.

New vehicles added to the auto maker's roster since year-ago include the Dodge Avenger midsize car and Nitro SUV, and Jeep Patriot cross/utility vehicle, which combined account for 68.0% of Chrysler's total vehicle production increase.

Additionally, the next-generation Chrysler Sebring is in full production, compared with its low-volume launch at the same time last year. Consequently, the Sebring and Avenger build, combined, will drive a 45.2% increase in passenger-car output for August.

Chrysler's light trucks will top like-2006 by an estimated 17.8%, with the help of new minivan production.

General Motors Corp. is forecasting August output of 447,726 units, representing a 3.7% shortfall from prior-year's 464,888.

While the auto maker also has added new vehicles, such as the Buick Enclave, GMC Acadia and Saturn Outlook CUVs, GM's newer vehicles, unlike Chrysler's, all replace other production. Gone are the Pontiac Montana and Buick Terraza and Rendezvous.

Overall, Ward's is forecasting GM will see a slight 1.6% uptick in light-truck builds due to the strength of its CUVs. However, passenger-car output is expected to drop 11.2%, primarily due to the discontinued Saturn Ion and Chevrolet Monte Carlo.

Ford Motor Co.'s August production is forecast at 1.6% ahead of prior-year's pace at 278,402 units, compared with 274,064.

The auto maker this year replaced the Ford Five Hundred and Freestyle and the Mercury Montego with the Ford Taurus and Taurus X and the Mercury Sable. All are being built at higher rates than their predecessors.

Other new vehicles added to the roster and further bumping up production totals include the Ford Edge and Lincoln MKX CUVs and the Lincoln MKZ sedan, which replaces the Zephyr phased out last year.

Ward's forecasts Ford's light-truck production in August will jump 20.2% ahead of like-2006. However passenger-car builds are expected to fall 29.4% short of year-ago due to high-volume output last August of the Ford Focus and Fusion, both of which currently are seeing decreased demand.

Toyota Motor Engineering & Mfg. North America will increase August production 17.8% to 167,937 units, from year-ago's 142,753.

The 25,185-unit gain is due mostly to the new Tundra fullsize pickup truck, which will account for 72.6% of the increase and drive Toyota's light-truck build up 42.1% ahead of like-2006. Passenger-car output will see a slight 1.8% uptick.

Nissan North America Inc. and Honda of America Mfg. Inc. both are forecast to step up production in August over year ago.

Nissan will produce 4.3% more vehicles in the month, with a significant 19.7% jump in car builds, while light-truck output is expected to tumble 18.5%. Honda's total-vehicle production will see 2.7% growth, with modest increases for both cars and light trucks.

Detroit's Big Three are forecast to increase production 3.6% in August, while the combined foreign manufacturers will boost output 9.4%.

North American Vehicle Production Outlook