North American light-vehicle output to go up 5% in 1st qtr of 2012

Article by Christian A., on January 2, 2012

Production  of light vehicles in North America will increase by 5 percent in the first quarter this year, forecasters disclose, identifying a continued recovery from natural disasters in Asia as well as boost in sales as factors. The increases in output are also anticipated to continue for much of the year.

Analyst Tracy Handler at IHS Automotive estimates industry-wide production in North America for the first quarter at 3.6 million units, which would be an increase by 5 percent from the 3,392,532 a year earlier. Handler added that one needs "a little more" product in the system, as the sales rate is expected to grow this year. The increased production "is definitely to catch product up in the pipeline."

Among North America's biggest vehicle manufacturers, only Chrysler Group is anticipated to have a decline in production during the first quarter, with a 4 percent drop attributed to the end of the line for three Dodge models.

Various manufacturers have disclosed that they intend to boost production. On December 1, executives at Ford Motor Co. had disclosed that the company intended to increase first-quarter production by 3 percent. Meanwhile, internal documents of Daimler AG obtained by Automotive News revealed that the automaker plans to increase output at its Mercedes-Benz factory in Vance, Ala., up by 30 percent in 2012.

On the other hand, Asia-based carmakers continue to struggle to overcome shortages of crucial components brought about by the March 11 earthquake in Japan, as well as the massive flooding in Thailand last year. However, by boosting production, they are making progress to replenish dealer inventories.

IHS forecasts that output in Honda Motor Co.'s North American plants will rise 11 percent in the first quarter. Meanwhile, output in North American operations of Hyundai/Kia and Toyota Motor Corp. will also rise at a double-digit clip. Hyundai/Kia has struggled to be at par with the strong demand for its vehicle models.

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