Production achievements (PC+UV): USA 10 months 2016 and forecast 2017
- In the first 10 months of 2016, automotive production (Passenger Cars + Utility Vehicles) in the USA increased by 2.5% compared to the same period of 2015, whereas it had increased by 4% in 2015 compared to 2014. This is the seventh consecutive increase year since the 2008-2009 crisis.
- The US market remained stable in 2016 (+ 0.1%) after having grown by + 5.8% in 2015.
- Each year, 80% of car production in USA is sold in the USA, accounting for 60% of auto sales in this market. The level of the US market has therefore a great impact on the volume of local production. And this automobile market is dependent on the economic growth of the country.
In 2017, economic growth and the arrival of a new government are two significant factors which will impact the future growth of the US automobile market and production.
Two scenarios can be established:
In 2017, economic growth and the arrival of a new government are two significant factors which will impact the future growth of the US automobile market and production.
Two scenarios can be established:
• A first scenario of a positive market growth (>+ 1%) in 2017.
Such a growth scenario has for basis an assumption of an economic growth in 2017.
OECD projections suggest that fiscal policy should take a more expansionary stance with an increase in public spending and investment, while taxation will decline.
This would boost the economy and therefore the production. However it is to take into account that capacities in USA are currently saturated and it would take time to re-open some plants which were closed around 5 years ago (as a consequence of the crisis).
As a result, automobile production in this scenario is expected to grow moderately (+ 1.6%), according to local market demand assessed in this scenario and the capacities.
Such a growth scenario has for basis an assumption of an economic growth in 2017.
OECD projections suggest that fiscal policy should take a more expansionary stance with an increase in public spending and investment, while taxation will decline.
This would boost the economy and therefore the production. However it is to take into account that capacities in USA are currently saturated and it would take time to re-open some plants which were closed around 5 years ago (as a consequence of the crisis).
As a result, automobile production in this scenario is expected to grow moderately (+ 1.6%), according to local market demand assessed in this scenario and the capacities.
• A second scenario of market stability (+ 0.1%). This scenario takes into consideration the Trump administration's possible future tax measures on imported vehicles (40% of US sales). Setting up such measures will take time. But it may create uncertainty in 2017.
In this scenario, auto production in the US could stabilize in 2017 (+ 0.8%).
In this scenario, auto production in the US could stabilize in 2017 (+ 0.8%).
• Another factor is to note: the possible anticipation of imported cars at a time their prices is not yet impacted by taxes.
However such an anticipation should have only a small effect on 2017 production.
However such an anticipation should have only a small effect on 2017 production.
- It is also to note that Ford announced this Monday (January 3rd) that it would maintain production of the Ford Focus in Michigan (United States) and will no longer produce it in Mexico as announced a year ago. It is yet not certain at all that this measure has been taken consequently to Trump’s announced policy (except on a public relation level). An Inovev analysis of this Ford plant closing will be published soon.
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