First-Quarter 2018 North American Production Outlook Cut 50,000 Units

First-Quarter 2018 North American Production Outlook Cut 50,000 Units

Bucking recent trends, the reduction in the first-quarter 2018 production outlook will result more from cuts in trucks, as well as in total output in Mexico.

Nearly 50,000 units have been cut from the North American light-vehicle production outlook for first-quarter 2018.

Production for January-March has been pared to 4.39 million units, 2.6% below the same period in 2017. Production is forecast to rebound in the second quarter.

Fourth-quarter 2017 production is estimated to total 4.10 million units, 5.5% below year-ago. Including the estimate, production for entire-2017 will total 16.99 million units, 4.1% below 2016’s record high 17.73 million units.

Bucking recent trends, the Q1 reduction will result more from cuts in truck output, rather than cars. January-March light-truck output was shaved by some 38,000 units. Cars were cut by 12,000 units.

Light-truck production plans call for Q1 output of 2.92 million units, 0.5% above like-2017. Cars are pegged at 1.47 million units, 8.3% below January-March 2017.

The majority of the truck reductions were centered in pickups, as some manufacturers were expected to slow production ostensibly for inventory control, or perhaps to perform some early tooling changes for upcoming redesigns later in the year. Both FCA US and General Motors in 2018 begin phasing in production of redesigned versions of their fullsize pickups.

In FCA’s case, it begins production of the new ’19 Ram Pickup in its Sterling Heights, MI, plant, which has been closed since 2016, in Q1 while it continues production for most of 2018 of the current versions in Warren, MI, and Saltillo, Mexico. The re-start of the Sterling Heights plant, which built cars prior to the shutdown, will be a boost to total volume for FCA.

Other truck reductions were made in CUVs and in the Small and Large Van segments.

Most of the cuts in cars were in midsize models.

The Q1 reductions affected plants in Mexico the most. Q1 Mexico output was cut by 37,000 units to 992,000, but still 3.2% above like-2017. The U.S. outlook in January-March was pared by 18,000 units to 2.97 million, 2.8% below like-2017, but Canada Q1 output was increased by 5,000 to 531,000, 11.2% below the year-ago period.

The majority of Mexico cuts were in trucks, but it also accounted for a large portion of car reductions. U.S. plants also posted declines in Q1 plans for both cars and trucks. However, Canada’s car output was increased, while trucks remained nearly flat.

Including estimated production for December, U.S. output will end 2017 at 10.90 million units, 8.5% below 2016. Mexico’s estimated 2017 total is 3.92 million, 13.5% above 2016, and a record high for the country. Canada’s final 2017 output is estimated at 2.17 million, 8.0% below 2016 and lowest on record since 2011.

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