Fueled by strong demand for cars and trucks, U.S. automakers are accelerating production and, in some cases, canceling the industry’s traditional summer factory shutdowns. According to LMC Automotive, all brands, except Volkswagen Group, are expected to increase manufacturing output, running production near 90% of capacity.
LMC forecasts total production in 2013 of 16 million vehicles, the highest since 2002, when the industry produced 16.5 million units. If true, the automotive sector will be one of the brighter spots in the otherwise lackluster manufacturing landscape in 2013.
On the other hand, if demand does not meet expectations, automakers will end up, not for the first time, with excess inventory. Initially, the extra production would boost revenue, because automakers book revenue when they ship a vehicle to a dealer, but in the long run they will have to make room for 2014 cars, and will be forced to offer discounts and incentives to the get cars off the dealers’ lots. If you are in the market for a new car, end of 2013 model year may be a good time to find a good deal.