Friday, September 08, 2006

GM forecasts 12 percent drop in 4-quarter production

Friday, September 01, 2006
GM forecasts 12 percent drop in 4-quarter production
Associated Press

DETROIT -- General Motors Corp. said Friday that it expects about a 12 percent decrease in North American production during the fourth quarter.

The world's No. 1 automaker said in its monthly sales report for August that it forecasts producing 1.13 million vehicles -- including 455,000 cars and 675,000 trucks -- during the quarter.

That would be down about 150,000 total vehicles, or approximately 12 percent, compared with the last quarter of 2005.

The estimate "does not reflect a reduction in GM's sales outlook but is consistent with our strategy to reduce low-margin daily rentals, and takes into account the plan to shift production of pickups to the next-generation pickups during the fourth quarter," the company said in a release.

GM North America expects to make 1.05 million vehicles, which includes 405,000 cars and 645,000 trucks, in the third quarter. In the third quarter of 2005, the region produced 1,146,000 vehicles, which included 423,000 cars and 723,000 trucks.

Last month, Ford Motor Co. announced that it would cut production by 168,000 vehicles, or 21 percent, in the fourth quarter to bring supply back in line with growing inventories.

DaimlerChrysler AG's Chrysler Group said it will cut production in the fourth quarter by an unspecified amount. The company earlier announced a 10 percent cut in third-quarter production, mostly in trucks and sport utility vehicles.

The Big Three, which rely more on light trucks for profits than their foreign competitors, have been hurt by declining sales of pickup trucks. For the first seven months of this year, overall pickup sales were down 15.7 percent from the same time last year.

The Chevrolet Silverado, the No. 2 seller behind Ford's F-series pickups, was off 20.1 percent through July compared to 2005 as the company changes production to a new model. Truck sales fell 31.2 percent in July alone.

Most truck sales are for personal use, as opposed to work use. Analysts say because of uncertainty about fuel prices, many pickup customers are leaving the market for more fuel-efficient vehicles.

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