First-Half Still Strong

Detroit's Big Three are doing a lot of shuffling and trimming, but production boosts at Honda Motor Co. Ltd.'s North American operations and to a lesser extent Toyota North America Mfg. Inc. are helping overall North American vehicle output maintain a steady pace.

In the year's first half, the Big Three are expected to account for 65% of North American production, compared with 70% in like-2004, while transplants will account for 33% vs. 28%. Heavy-truck output will account for the remaining 2%, same as year-ago.

General Motors Corp. is leaving its May-June production plans essentially intact, despite some shuffling of output between cars and trucks, but other auto makers have stepped up to the plate with adjustments, resulting in a 66,600-unit cut in second-quarter production, bringing the industry's second-quarter North-American output tally to 4,325,900 units.

That still is 0.7% ahead of year-ago's 4,294,000 cars and trucks and ranks sixth best in history, trailing 1996 production for the period by just 3,600 units. However, it is some 498,000 units, or 10.3%, less than the period output record of 4,823,816 notched in 2000.

Although first-quarter vehicle assembly is only eighth-best, the second-quarter plan remains strong enough to make the industry's January-June slate sixth-best, trailing year-ago's 8,543,350-unit output by 3.5% and the 2000 record of 9,634,837 vehicles by 12.6%.

The largest cut in second-quarter production comes from Ford Motor Co., which on April 21 slashed its April-June plan by some 35,200 vehicles to 843,400 units from 878,600 on the books a month earlier. That includes a shortfall of 14,600 units in April.

Chrysler Group also underbuilt its April plan by some 8,600 units, but so far has made no change for May and June. Some minor adjustments, however, may be forthcoming.

GM is keeping its second-quarter North American output, with some tweaks, at 1,186,500 cars and trucks, 10.3% below the 1,322,100 vehicles built in April-June 2004. There had been speculation GM might trim its May-June volume due to weakening sales.

Instead, the auto maker has shuffled monthly schedules so that a 3,500-unit April net overbuild mostly is offset by a cut of 3,000 vehicles in June. Car production in April came in some 19,800 units above plan, but that is offset by cuts of 9,000 in May and 10,000 in June.

On the flip side, 9,000 of the 16,300 truck assemblies pared from April have been moved to May and 7,000 rescheduled for June. Thus, the industry remains on target to build 4,325,900 vehicles in the second quarter, 0.7% more than the 4,294,000 units built in like-2003.

Normally, the industry would have provided a glimpse of preliminary third-quarter schedules by now, but given the amount of uncertainty over the strength of the U.S. economy, the Big Three this year are not expected to sign off on anything concrete until early June.

Meanwhile, several transplant producers are busy pumping up output in the second quarter.

Chief among them is Honda's North American operations, which have added 14,500 units to its April-June slate, including 500 vehicles in April, 4,000 in May and 10,000 in June. In the first six months, Honda is operating at nearly 112% of its year-ago pace.

Toyota North America has added 2,700 units to its April-June tally, most of it in June, mostly cars.

On the flip side, Volkswagen de Mexico S.A. de C.V. is cutting its second-quarter plan by 4,800 units; AutoAlliance International Inc. and Nissan North America Inc. also are trimming output somewhat for April-June