Ford Motor Company (NYSE:F) sold 808,800 units in the first four months, a rise of 12.7% compared to the same period last year. As per Autodata, the second-largest American automaker’s market share moved up to 16.3% for the period from 15.4% last year. The automaker, in particular, is having a solid year and plans to enhance its production capacity by 200,000 units to 3.4 million vehicles. It proposes to do so by increasing its workforce and adding more factory shifts.
Similarly, Chrysler has also shortened its summer vacation. Only four out of its 10 plants in the U.S. would be closed for two weeks this summer. U.S. automakers want to sufficiently stock themselves with cars to avoid short supply and benefit from increased demand. Senior Vice President of LMC, Jeff Schuster, expects the second half of 2013 to be even stronger than the first half.
While the Detroit Three have shortened or modified their respite period to serve the solid demand, their Asian counterparts have no such plans. Toyota Motor Corporation (ADR) (NYSE:TM), Honda, and Nissan will shut down their plants for a week in the summer. Toyota’s April sales in the U.S. dropped 1.1%. Its Camry sales dropped 4.3% in the first-quarter of the year due to stiff competition from Ford Motor Company (NYSE:F) Fusion, Honda’s redesigned Accord, and Nissan Altima.
Prius sales also tumbled 8.4% for the quarter. Akio Toyoda has restructured the company’s management by giving more autonomy in the local region which is aimed at bringing about some radical changes. In North America, Jim Lentz, Chief Executive of Toyota Motor Corporation (ADR) (NYSE:TM)’s U.S. operations has been given the responsibility of handling the company’s manufacturing and sales in the region.
Looking forward
Automakers are working on enhancing their production levels this year in anticipation of higher demand in the second half. Summer shutdowns are usually a strategy to cut costs and deal with low demand during this period. However, skipping or reducing the shutdown increases the inventory cost and also increases the risk in case sales do not meet expectations. But, the demand for cars and trucks look quite decent. Also, growth in the North American auto market is helping auto players to compensate for their huge loss from the weak European market.
The article Robust Auto Sales Are Encouraging These Car Makers to Go on the Offensive originally appeared on Fool.com and is written by Rajesh Marwah.
Rajesh Marwah has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Rajesh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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