A bad March for automobile sales, more pressure on US firms
Posted by: admin in Industry NewsFiled under: Forecasts, Bad news, Industry, Ford Motor (F), General Motors (GM), Economic data
March is expected to be another bad month for US automobile sales. Domestic manufacturers are apt to have the worst of it. According to Reuters, “A sharp decline in March sales could also heighten concerns that the world’s largest market for vehicles and trucks is on track for its weakest year since 1994.” JD Power and other analysts now anticipate US vehicle sales to be below 15 million units, well short of the 16.1 million sold last year. If the recession deepens, the number could move toward 14.5 million.
A very sharp drop in units sales could take $40 billion in automobile sales out of the market compared to last year if the average car costs $25,000. For Detroit, which now only has about 50% of the US market, that would be a disaster.
Despite money taken out of the automobile companies through factory closings, layoffs, and a new UAW contract, the Huge Three are still not set up for an extremely sharp drop in revenue. Ford (NYSE:F) and GM (NYSE:GM) trade about where they did just over two years ago when there were rumors of bankruptcies.
Those rumors will begin again, and for good reason.
Douglas A. McIntyre is an editor at 247wallst.com.
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