North American Auto Output To Drop 10%

Auropolis analysts expect vehicle production in North America to fall by 10 per cent in 2003 even is a war is avoided or short. The drop will continue even if current price-cutting is extended. Despite action to maintain volumes US sales fell for eight months in 2002 and showed lower year-on-year figures for the second straight year in a row.

In a market characterised by fears over some carmakers’ financial foundations, waning consumer confidence and a market which has been almost saturated with overly-cheap cars for three years, the prospects are poor. Past cycles in the US show, that when it comes, the market normally corrects sharply and quickly. Swings in sales of more than 20% from the highest point to the lowest over an 18 month period are typical says the firm.

The only reason that the situation might be better this time is because Mexico’s market should grow in 2004 thanks to price cuts anticipated there. Assuming a normal pace of recovery, Autopolis say the North American market will take until 2009 to have returned to its peak level again..