Ford Says Auto Sales Softer in Feb, Lowers Annual Forecast
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Ford Says Auto Sales Softer in Feb, Lowers Annual Forecast
I believe both GM and F have now come out and said auto sales softened in February. Sounds like we are being set up for some grim numbers next week. But the more interesting point is that they say we are currently running at about a 9M annual sales rate. If you go back to the bailout hearings, that is the range where all the players said they would be in trouble. Have to keep in mind that at the peak we were at about 16 to 17M units a year. Even company's that do it right, like Toyota, will have to adapt to rightsizing for this volume. What it means for GM, ChryCo, and F (which is going to burn through that cash quick) is even more dramatic. In about a month, the bailout is going to be a real game of hot potato the way things are going.
Reuters
Ford sees Feb U.S. auto sales near 9 million annual rate
Friday February 27, 12:52 pm ET
By David Bailey
DEARBORN, Michigan (Reuters) - Ford Motor Co (NYSE:F - News) expects U.S. auto industry sales to drop to about a 9 million unit range on an annualized basis in February as retail demand slipped, the automaker's chief sales analyst said on Friday.
U.S. retail sales for the industry likely fell about 40 percent in February from a year earlier under a decline in U.S. consumer confidence, Ford's George Pipas told reporters, adding that Ford's retail results could be slightly worse than that.
"The environment continues to be very challenging," he said.
Overall, the annualized rate of retail sales, which had remained relatively stable from October through January, appears to have taken "a step down in February," Pipas said, adding that sales to fleets remain difficult to predict.
In January, U.S. auto sales fell 37 percent overall from a year earlier. The annualized rate, a key measure for economists, fell to about 9.57 million vehicles, the lowest monthly rate since 1982.
Automakers will also face tough year-over-year comparisons in February. The U.S. annualized rate of sales was about 15.4 million units in February 2008, roughly the peak for the year.
Pipas said the U.S. annualized rate of retail sales was in the mid 8 million unit range in January for the industry and will likely be below 8 million in February.
Pipas said that while Ford still expects U.S. auto industry sales to begin to recover in the second half of the year, it is not building that assumption into its production plans.
Ford expects to build more vehicles in the second quarter in North America than the 375,000 vehicles it plans to assemble in the first quarter of this year, but that will be down overall from its second-quarter production in 2008, he said.
The automaker does not plan to increase production appreciably until it sees a rebound in sales, he said.
U.S. government stimulus programs should benefit auto industry sales, but more in the latter half of the year than in the near term, Pipas said.
On Thursday, Ford cut the lower end of its 2009 U.S. auto industry sales forecast to 10.5 million vehicles, but affirmed that it had sufficient liquidity to complete its turnaround plan without seeking government emergency support even if sales fell much steeper than that.
Ford expects the U.S. auto industry sales rate to be closer to the roughly 10.3 million annualized rate from the fourth quarter of last year than to the levels seen in January and expected in February, he said.
http://biz.yahoo.com/rb/090227/busin...ales.html?.v=1
Reuters
Ford sees Feb U.S. auto sales near 9 million annual rate
Friday February 27, 12:52 pm ET
By David Bailey
DEARBORN, Michigan (Reuters) - Ford Motor Co (NYSE:F - News) expects U.S. auto industry sales to drop to about a 9 million unit range on an annualized basis in February as retail demand slipped, the automaker's chief sales analyst said on Friday.
U.S. retail sales for the industry likely fell about 40 percent in February from a year earlier under a decline in U.S. consumer confidence, Ford's George Pipas told reporters, adding that Ford's retail results could be slightly worse than that.
"The environment continues to be very challenging," he said.
Overall, the annualized rate of retail sales, which had remained relatively stable from October through January, appears to have taken "a step down in February," Pipas said, adding that sales to fleets remain difficult to predict.
In January, U.S. auto sales fell 37 percent overall from a year earlier. The annualized rate, a key measure for economists, fell to about 9.57 million vehicles, the lowest monthly rate since 1982.
Automakers will also face tough year-over-year comparisons in February. The U.S. annualized rate of sales was about 15.4 million units in February 2008, roughly the peak for the year.
Pipas said the U.S. annualized rate of retail sales was in the mid 8 million unit range in January for the industry and will likely be below 8 million in February.
Pipas said that while Ford still expects U.S. auto industry sales to begin to recover in the second half of the year, it is not building that assumption into its production plans.
Ford expects to build more vehicles in the second quarter in North America than the 375,000 vehicles it plans to assemble in the first quarter of this year, but that will be down overall from its second-quarter production in 2008, he said.
The automaker does not plan to increase production appreciably until it sees a rebound in sales, he said.
U.S. government stimulus programs should benefit auto industry sales, but more in the latter half of the year than in the near term, Pipas said.
On Thursday, Ford cut the lower end of its 2009 U.S. auto industry sales forecast to 10.5 million vehicles, but affirmed that it had sufficient liquidity to complete its turnaround plan without seeking government emergency support even if sales fell much steeper than that.
Ford expects the U.S. auto industry sales rate to be closer to the roughly 10.3 million annualized rate from the fourth quarter of last year than to the levels seen in January and expected in February, he said.
http://biz.yahoo.com/rb/090227/busin...ales.html?.v=1
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Good find...wonder if the "annualized" takes into account Jan & Feb are notoriously slow months with March a sharp upward tick in warmer climates, then nationwide, NOT to mention people waiting for the budget AND stimulus AND (insert financial crisis of moment here) ... I think NEXT month's numbers will indicate true sales numbers and how bad things really are....
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Good find...wonder if the "annualized" takes into account Jan & Feb are notoriously slow months with March a sharp upward tick in warmer climates, then nationwide, NOT to mention people waiting for the budget AND stimulus AND (insert financial crisis of moment here) ... I think NEXT month's numbers will indicate true sales numbers and how bad things really are....
As we go forward from here the percentage drop will drop (no good way to put that) just because they will be comparing to months a year ago that weren't that good. The talking heads and other children will take it as a sign from the heavens that the downturn has ended when all that will have happened is just getting to those bad year ago figures. So the focus should shift from percentage drop from a year ago to that annualized volume number.
Either way, this is well under the point where F said they would be OK but they still keep maintaining that they can make it work without gov money even at this level. As for GM and ChryCo, they need to get a very quick dose of the reality of the car biz going forward.
#4
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I occasionally go over to the Ford dealer to get parts for my girlfriend's 99 Expedition (usually just small cheap things), but I often like to take a look in the showroom and it's depressing, even on Saturdays.
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