Who could have predicted it, an 9.0 magnitude earthquake, Libya’s Gadaffi going rogue, and gasoline at over $4 a gallon? Sure, any of those are possible, even probable, but all at once?
That sucking sound you hear? That would be the air rushing out of the economic recovery. That’s a quote from a friend of mine that was astounded when he filled up his car at $4.12 a gallon.
And yet, Congress still can’t find the time to create an energy policy that gets us off the dependence of foreign oil. A whooping $115 billion is what we added to our trade deficit for motor refined gasoline – not oil, just gasoline, in 2010. Congress wouldn’t be fighting over the deficit if they could get rid of that deficit.
Sales for March amazingly stood straight up and gave us a Seasonally Adjusted Annual Rate (SAAR) of 13.1 million sales, says Automotive News. Behind the numbers we get a glimpse of where we are headed.
The U.S. Industry sales were up seventeen percent year-over-year.
Ford beat General Motors in sales in March, 2011. This is only the second time in the last thirteen years that Ford has beat General Motors in sales.
Is the consumer concerned about gasoline going up?
Over the last three months the two top selling vehicles have been Ford F-Series first and Chevrolet Silverado second. In March the number one selling vehicle was the Ford F-Series, but the second best selling vehicle was the Honda Accord.
Cadillac Escalades, Chevy Suburbans, GMC Yukons – lots of big truck sales were down in March, 2011.
Ford’s analyst George Pipas told automotive News that small cars went from 19% in December, 2010 to 25% in March, 2011. The entire small car segment was up 32%.
How is Chrysler doing?
Chrysler is still taking two steps forward, one step back. There are no real talks of going public.
Chrysler brand lost the most volume for the first three months of 2011. They were only saved by the good fortune of Dodge, Ram and Jeep.
Saab continues to have money problems. Saab’s sales had the highest percentage of increase (180%) for the first three months of 2011.
By the middle of May we will see the true effects of parts shortages.
Honda sales rose 24% year-over-year. Eighty-five percent of cars sold in the United States are produced in North America. Honda works with over 600 suppliers in North America.
But the big question is what lays ahead for sales. With suppliers in flux our automotive rebound may be as tenuous as our nascent economy. More bad manufacturing news comes to us from the Associated Press;
Chrysler Group LLC is cutting overtime at plants in Canada and Mexico to conserve parts from Japan.
Chrysler plants in Brampton, Ontario, and Toluca, Mexico, are affected by the change. The Brampton plant makes the 300 sedan, Dodge Challenger and Dodge Charger. The Toluca plant makes the Dodge Journey and Fiat 500.
It’s the first time Chrysler has linked production cuts to the March 11 earthquake in Japan, which damaged suppliers.
Ford Motor Co. closed a truck plant in Kentucky this week, and a plant in Belgium last week.
Shortages extend to the homeless as well. Boomberg reports that parts are causing Honda and Fuji Heavy Industry to stop production of home generators. Generators have been instrumental in keeping the homeless warm with warm food.
Expect incentives to go down, prices to go up and used car prices to increase as well.
Listen as John Batchelor & Larry Kudlow talk to Lou Ann Hammond: