Fourth-Quarter North American Production to Rise 8.3%

WardsAuto is increasing its North American light-vehicle production forecast again for 2012, but growth still is expected to slow considerably in 2013.

Forecast output for fourth-quarter 2012 has been hiked by some 26,000 units from the month-ago figure to 3.714 million, up 8.3% from like-2011, as big increases for General Motors and Nissan more than offset parings at Chrysler, Ford and Volkswagen.

Production for the entire year is forecast at 15.30 million units, 16.9% above 2011’s 13.08 million.

However, there will be a leveling off of sorts in 2013, as growth in year-over-year demand slows from 2012 levels.

Inventory mostly is up to snuff from the several spot shortages that required production increases beyond what was needed to meet baseline demand earlier in the year, meaning 2013 output is forecast to increase just 1% from 2012 to 15.42 million LVs.

Hikes in fourth-quarter 2012 production at GM are centered on large pickups and SUVs, as well as the Chevrolet Equinox and Impala and Cadillac XTS.

Even though GM is losing an estimated 20,000 units of Silverado and Sierra fullsize-pickup production in October and November due to short-term plant closures to begin tooling for redesigned models due next year, inventory for those vehicles will remain on the high side as the auto maker does not appear to be planning any output cutbacks for the rest of this year.

GM’s U.S. large-pickup inventory stood at a 116 days’ supply at the end of September, while the combined days’ supply for its competition was a much lower 83.

On the plus side, sales of GM pickups should rise noticeably from recent levels sometime during the fourth quarter.

However, the high inventory, combined with robust production levels in the final three months of this year, is leading to a payback cut of close to 33,000 units in GM’s Silverado/Sierra forecast for 2013.

Lessening the blow for the auto maker next year are increases made to its large SUV and cross/utility vehicle production and small and midsize cars that reduced the overall cut to its 2013 forecast to just 7,300 units.

GM is forecast to build 3.26 million units in 2012, 5.4% more than last year. However, production is forecast to fall slightly in 2013 to 3.24 million, before returning to a robust growth rate in 2014.

Forecast fourth-quarter output at Nissan has been boosted 17,000 units. But most of that is to recoup lost production from September at its Smyrna, TN, and Canton, MS, plants that were in transition.

Output of the Frontier, Xterra and Suzuki Equator were switched from Smryna to Canton last month, and production of those vehicles, plus the Altima and Pathfinder also assembled at the plants, was slowed.

Reductions to fourth-quarter production include 10,200 units at Ford, 6,400 at Chrysler and 4,300 at Volkswagen.

Assuming the economy continues to grow, there is strong upside potential to the 2013 forecast.

U.S. LV sales could overshoot WardsAuto’s outlook for next year of 14.9 million, a 3.5% increase over projected 2012 deliveries of 14.4 million. Similar gains are expected for Canada and Mexico.

U.S. sales are forecast for a 15 million seasonally adjusted annual rate this month, the first time since 2008 the SAAR has reached that level. If deliveries maintain that momentum into first-quarter 2013, the outlook for the entire year likely will be raised, including production.

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