With Ford announcing it will increase production by 40,000 vehiclesat its North American plants this summer, it's clear automakers expect summer sales to remain relatively strong.
It also raises the question of whether GM will follow Ford and Chrysler's lead of limiting traditional summer plant closures to boost production of certain models.
For Ford and Chrysler keeping the summer plants going when they would normally be closed is not surprising. Right now, demand for new cars remains strong despite signs the economy appears to be growing at a slower rate. What's pushing people into showrooms? The pent-up demand created by people driving old cars and trucks.
A few weeks ago I talked with Ford executives about that pent up demand and from their perspective we have a long ways to before we clear out the older models people are driving. In other words, there's a natural flow of customers coming into showrooms and that should continue for some time.
The other factor is the easier, more widespread credit available for buyers. Automakers are selling a greater percentage of their new models to buyers with sub-prime and deep sub-prime credit scores.
There are people who will be worried about this trend, but those who analyze the credit of car buyers say the market is expanding naturally and there's little evidence dealers and creditors are pushing auto loans too far, too fast.
So could we see GM join Ford and Chrysler and increase its summer production in the U.S. Perhaps with some models in high demand (like the Chevy Cruze) as it tries to capture sales for proven winners.
Click on Ticker to Track Corporate News:
- General Motors
- Ford Motor
- Toyota Motor
- Honda Motor