November Auto Sales Scenario for American and Japanese Automakers
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November sales in the American auto industry give hints that car sales will not be good next year and even the coming ten years. Last Monday, as balance sheets have been done reflecting November car production, distribution and sales, automakers announced that there was a two percent industry wide decrease. Major factors to be blamed are troubles in the housing market and the continuously increasing fuel prices.
The Big three automakers of Detroit shall be responsive to the phenomenon. According to General Motors Corp. and Ford Motor Co. they will be cutting the scheduled production in the first quarter of 2008.
Meanwhile, Chrysler LLC with its new owner plans to make a weekly review of their production plans every week to combat 2008’s bad sales premonitions. “We are feeling it in our automotive business,” Chrysler’s vice president of sales Darryl Jackson said in a teleconference with media and analysts.
Although the year has not reached its end yet, analysts predict that if vehicle sales continue as it is, 2007 will have a total of 16.2 million vehicle sales. Compared to analyst’s forecast for 2008, this number is quite healthy. According to George Pipas, top analyst at Ford Motor Co., 2008 car sales could dramatically fall to 15.5 million vehicles only from January until June of next year. Pipas’ prediction however did not convince Aaron Bragman, an analyst at Global Insight, Bragman says it may be lower than that. “We’ll see what happens, but thus far it’s not looking like a very positive sales year next year,” Bragman said.
Some highlights for November include huge increases at the subcompact segment led by the Honda Fit, Nissan Versa and the Chevrolet Aveo. Crossovers also gained sales increase. The sales of Japanese automakers Nissan Motor Co. and Honda Motor Co. were boosted by their small cars and their remodeled sedans.
“Rising fuel prices and sliding home values delivered a one-two punch this month,” Jim Lentz, president of Toyota’s U.S. sales arm, said in a statement. “But the industry’s not down for the count. Demand for fresh, more fuel-efficient products continues to show strength.”
In general, falling demands for trucks greatly damaged the auto industry. The truck sales fall was due to decrease in home constructions in America. According to data from Autodata Corp., there was a total of seven percent decrease in sport utility vehicle and truck sales for November.
For November, even thou GM still has the biggest auto sales in America, the automaker posted an 11 percent sales decrease for the month while Chrysler LLC dropped by two percent. Toyota Motor Corp. and Ford Motor Co. announced that they have flat sales. Good fate was for Honda Motor Co. along with its Acura division (maker of genuine Acura accessories like Acura car cover) with five percent sales increase and Nissan Motor Co. with six percent sales boost.
Anthony Fontanelle is a 35-year-old automotive buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop.