North American 2012 Forecast Production Gain Offset in 2013

WardsAuto is boosting its North American light-vehicle production forecast for 2012 from an earlier revision in May, while also trimming predicted output for 2013 and 2014.

LV production now is expected to rise to 14.96 million units this year from 14.92 million forecast earlier, due to underestimating May’s output.

Despite last month’s U.S. vehicle sales coming in below trend to a seasonally adjusted annual rate of 13.7 million units and the expectation for June of 14.0 million, WardsAuto’s sales forecast remains at 14.5 million for the year. Even if deliveries should fall below that mark by as much as 200,000-300,000 units, it would have little effect on the 2012 production forecast.

That’s because auto makers for the most part continue to ramp up capacity to keep pace with market growth and likely would be willing to absorb some extra inventory at year-end to ensure dealers have enough stock to meet increased demand in 2013.

As long as the economy continues to grow, North American LV sales will maintain their upward trajectory. Should deliveries finish at less than the 14.5 million units forecast for 2012, pent-up demand will drive the market next year. U.S. sales for 2013 are forecast to reach 15.4 million, while deliveries in Canada and Mexico also are expected to climb.

Nevertheless, WardsAuto is trimming its 2013 LV production forecast by 45,500 units to 15.32 million, up 2.4% from 2012. Cuts mainly are seen at Nissan’s Mexico operations as the auto maker faces capacity constraints on cars until it opens a new plant late in the year.

LV production for 2014 is forecast at 15.96 million, up 4.2% from 2013 but nearly 43,000 units less than forecast last month. Reduced output is expected by several manufacturers, including Chrysler, Ford, Honda and Hyundai.

However, Nissan is forecast to see a 35,000-unit increase, with added capacity from its new plant in Aguascalientes, Mexico.

By country, WardsAuto forecasts U.S. production at 9.83 million units for 2012, up 16.8% from 2011, 10.22 million for 2013, up 4.0%, and 10.51 million for 2014, up 2.8%.

Mexico will see output grow 6.9% in 2012, 2.8% in 2013 and 11.9% in 2014, when production tops 3 million units for the first time at 3.13 million.

Canada, which has suffered a decline in LV capacity from two plant closures since 2009 and is facing the loss of a third factory next year, will see output fall in 2013 despite industry sales growth.

Canadian production is forecast at 2.31 million units in 2013, down 4.4% from 2012’s forecast 2.42 million. But growth is expected to resume in 2014 with output reaching 2.33 million, up 0.8% from 2013.

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