May Output Up

North American auto makers were slated to build 7.3% more vehicles in May than they did a year ago, but it likely will be one of the few gains the industry will see for the remainder of the year.

Both capacity utilization and manufacturers' use of their available straight-time production went up in May.

Ward's estimates May vehicle production, including medium- and heavy-duty trucks, at 1.505 million units, 7.3% ahead of year-ago.

Although most assembly plants had an extra workday this year, compared with May 2005, the estimate still represents a gain of some 102,000 units.

All three countries — the U.S., Canada and Mexico — were slated to record gains over year-ago, with Mexico's 32.5% increase to 182,000 units leading the pack.

Mexico is benefiting from 3-shift output at Ford Motor Co.'s Hermosillo plant, plus the Chevrolet HHR output by General Motors Corp. and, to a lesser degree, the increased output by most of the country's other auto makers.

Indeed, the total 2006 production should come close to Mexico's record year in 2000, when manufacturers assembled 1.92 million vehicles.

U.S. production, which accounts for more than 70% of North American output, was slated to rise 4.7% in May to 1.075 million units. May's U.S. seasonally adjusted annual rate of production was 11.5 million vs. 11.6 million in both the prior month and year-ago results.

Canada's May output was estimated at 249,000 units, 3.9% above year-ago.

All the major auto makers, including joint-venture output for each, expected to see gains over year-ago. Ford has the highest increase of 10.3%, lifting the Top Six total 5.8% over year-ago.

Production by the rest of the industry, roughly 7.8% of the total vs. prior-year's 6.5%, was slated to rise a whopping 29.4%.

The estimate brings the year-to-date total through May to 7.05 million units, 2.0% ahead of like-2005's 6.91 million. However, that gap will narrow in June when production is forecast to fall 3.5% from like-2005, with a few exceptions and continue to slow through year's end.

Year-to-date North America output is forecast to be roughly flat with prior-year at the end of the third quarter, and finish the year 1.7% below 2005.

May's estimated output of 1.62 million units equals 93.1% of the industry's available straight-time production for the month, an increase over prior month's 91.8% and year-ago's 92.3%.

Capacity utilization — output measured against full 52-workweek capability — is estimated at 83.6%, compared with April's 81.5% and May 2005's 83.0%. Year-to-date through May, capacity utilization is expected at 84.6% vs. like-2005's 83.2%.