On May 3, industry analysts are pumped up April 2016 to be the best April in history for car sales. Some analysts expect record sales for the entire year.
I doubted that then and I doubt that even more now.
Please consider an email from "FW" a 15-year electrician at Ford who chimes in with some relevant anecdotes and a more recently, a communication bulletin from the plant where he works.
On April 27, "FW" pinged me with these comments ...
Like I stated in my last email, I work for Ford. I work in a high volume assembly plant. We build Ford Escape and Lincoln MKC. We build over 700 vehicles a shift and work two 10 hour shifts a day. We also work a lot of Super Sundays (weekend extra production)
About month ago we went through model change. After the model change it is normal for the volume to go down in order to work out all unexpected problems. Also for the first 3 weeks of the new model we don`t ship any new cars to the dealers in case there is some issues discovered.Just now we starting back our normal volume and normal shipping.
I expected that once things go back to normal we will be working a lot of Super Sundays to make up lost production. I knew of at least 13 Super Sundays that were schedule in next few months. However I just learned from production manager that all 13 had been cancelled.
Maybe it is just the normal slow down and it will pick right back but I am not very confident.
Letter From Plant Manager
Yesterday, FW forwarded me this.
Indeed, let's communicate.
Sales are so hot, we need to cancel second and third quarter scheduled overtime.
US Auto Sales Back on Track? Another Record Year?
On May 3, I reported US Auto Sales Back on Track? Another Record Year?
Motor Vehicle Sales
"North American-made vehicle sales for April are running a little higher than March, at a 13.5 million annualized rate vs 13.3 million."
Given that April had five full weekends, an extra selling day, and Easter came in March, is a 0.2% pickup over March for the big three such an amazing feat?
Forget about it. GM sales were lower and Ford is canceling scheduled overtime shifts.
By the way, sales are recorded not when consumers buy cars and truck. Rather, sales are recorded when cars and trucks are shipped to dealers.
Inventory Piling Up
The lots are a cram packed with inventory piling up.
Not only are new car lots stuffed to the max, so are used car lots.
In case you missed it, please consider Peak Preowned: Used Car Inventory Hits Record Level; Congratulations, You Are Qualified.
To tie everything together, reader "FW" is the person who emailed me on April 10 asking How do I Short the Subprime Auto Sector?