Passenger car sales in the USA rose by 4.2% in December to
688,960 from 660,881. That reduced the full year deficit to 1.2% with total sales of
8,186,089 from 8,289,116. Although the rise was modest it was still the best result for
the month for four years and coupled with the fact that sales in the final quarter rose by
1.2% overall to 1,895,613 from 1,873,406, it does suggest that the market has bottomed
out, at least for a while.
The WAIT forecast for 1998 had been 8.2 million, and that is more or less where the
market finished. For 1999 we still expect another slight decline, partly because we
believe the US economy is contracting marginally, and partly because the observed drift
away from passenger cars to light trucks will continue for the short term at least.
Eventually the legislators who successfully drove car buyers away from the monster engined
passenger cars will realise that by and large all they did was transfer them into macho
trucks. When the two sectors are operating on a level playing field, then we expect a
drift back towards passenger cars. For 1999 we expect light truck sales of about 7.5
million, but from time to time the truck sector could be higher than the car sector, as it
was in November 1998.
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General Motors had a miserable year, brought about mostly by the lengthy strike that
robbed them of popular models at a critical time. It is rare that a strike aids either
side in a dispute, and that would seem to be the case following the GM dispute. The
company lost sales and valuable market share, with not a lot of chance of claiming any of
that back, and the workers will eventually lose jobs because that is the nature of the
beast. With pressures mounting on a global scale following the collapse of economies in
the Far East and South America, we are entering the most competitive era yet in the motor
industry, and only the leanest and meanest are likely to survive. The entire industry has
been blighted with over capacity for the best part of a decade, but it didn’t bring
anyone from the West or the Far East to their knees because even so there were still
opportunities for those alive to them. But now the situation is totally different and the
long awaited shake out of the world’s motor industry is underway. The suggestion is
that it’s become a case of watch this space to see who will leave a space.
