About Those Record Auto Sales… An Insider View

Posted: May 8, 2016 in Uncategorized
Tags: ,

On May 3, industry analysts are pumped as April 2016 is the best April in history for car sales. Some analysts expect record sales for the entire year.

I doubted that then and I doubt that even more now.

Please consider an email from “FW” a 15-year electrician at Ford who chimes in with some relevant anecdotes and a more recently, a communication bulletin from the plant where he works.

On April 27, “FW” pinged me with these comments…


Hi Mish

Like I started in my last email, I work for Ford. I work in a high volume assembly plant. We build Ford Escape and Lincoln MKC. We build over 700 vehicles a shift and work a lot of Super Sundays (weekend extra production)

About month ago we went through model change. after the model change it is normal for the volume to go down in order to work out all unexpected problems. Also for the first 3 weeks of the new model we don’t ship and new cars to the dealers in case there is some issues discovered. Just now we start back our normal volume and normal shipping.

I expected that once things go back to normal we will be working a lot of Super Sundays to make up lost production. I knew of at least 13 Super Sundays that were schedule in next few moths. However just I just learned from production manager that all 13 had been cancelled.

Maybe it is just the normal slow down and it will pick right back but I am not very confident.

Sincerely: FW

letter2016

Let’s Communicate!

Indeed, let’s communicate.

Sales are not so hot, we need to cancel second and third quarter scheduled overtime.

US Auto Sales Back on Track? Another Record Year?

On May 3, I reported US Auto Sales Back on Track? Another Record Year?

carreport2016

“North American-made vehicle sales for April are running a little higher than March, at a 13.5 million annualized vs 13.3 million.”

Given that April had five full weekends, an extra selling day, and Easter came in March, is a 0.2% pickup over March for the big three such an amazing feat?


Record Sales?

Forget about it. GM sales were lower and Ford is canceling scheduled overtime shifts.

By the way, sales are recorded not when consumers buy cars and trucks. Rather, sales are recorded when cars and trucks are shipped to dealers.

Inventory Piling Up

The lots are a cram packed with inventory piling up.

Not only are new car lots stuffed to the max, so are used car lots.

In case you missed it, please consider Peak Pre owned: Used Car Inventory Hits Record Level; Congratulations, You Are Qualified.

To tie everything together, reader “FW” is the person who emailed me n April 10 asking How do I Short the Subprime Auto Sector?

Addendum:

I was not familiar with the term “door tarmac losses”.

Here is the explanation: “It was a break down of the equipment that caused 8 hour shut down of the production.”

 

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