GM, Toyota drive up auto production as economy rebounds
Auto sales have risen for 5 consecutive months
The coronavirus pandemic has fueled demand for cars and now some of the world's biggest automakers are ramping up U.S. production to meet that demand.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TM | TOYOTA MOTOR CORP. | 173.35 | +0.40 | +0.23% |
A Toyota spokesperson told FOX Business that the company has been "increasing manufacturing shifts at multiple locations to improve dealer inventory" particularly for SUVs and sedans. "Shift increases vary by location based on vehicle demand,” the spokesperson added.
Bob Carter, head of Toyota's U.S. sales, recently told The Detroit Bureau that the company is "refilling the pipeline as quickly as possible,” and its factories are running at about 93.7% of their capacity, which is down from 95.5% a year ago.
AUTOS HELPED DRIVE JUMP IN RETAIL SALES
In September, retail sales rose for a fifth straight month, according to the Commerce Department. The sales figures were helped by auto purchases, which jumped 3.6%, the third strongest category.
USED CAR PRICES SAW RECORD RISE IN SEPTEMBER DUE TO SHORT SUPPLIES
General Motors is also following Toyota's lead by running several of its manufacturing plants around the clock on three shifts of production.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 55.53 | +0.66 | +1.19% |
The plants include full-size pickup plants in Fort Wayne, Ind. and Flint, Mich., a midsize pickup and van plant in Wentzville, Mo., and a full-size SUV plant in Arlington, Texas, a GM spokesperson told FOX Business.
"In addition, we have several engine, transmission and metal stamping plants also running on [three] shifts to support the above-mentioned truck plants," the spokesperson said.
GMC HUMMER EV FIRST YEAR OF PRODUCTION ALREADY 'SOLD OUT'
Ford Motor Company, on the other hand, said it will not be adding additional shifts because the company has been operating at pre-pandemic levels since early July and there are "no plans to change that."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 10.82 | +0.10 | +0.93% |
Ford reported earlier this month that its F-Series and Ranger pickup sales were up 4% combined and delivered the brand’s best third-quarter pickup sales since 2005.
Ranger sales have increased 31.1% year-over-year through September, and the F-Series is down 11.1% as Ford begins transitioning to a new F-150 model for 2021. Ford and Lincoln's total sales dropped 4.9% for the quarter.
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The move by some of the auto industry's major players comes as the economy continues to bounce back despite the effects of the virus.
Used car prices spiked 6.7 percent in September, marking the biggest monthly move since February 1969. The jump came after a 5.4 percent increase in August, according to the U.S. Labor Department.
According to J.D. Power, prices have been on the rise since July and are up 10.3 percent year to date, while average new car prices increased just 0.3 percent in October and 1 percent so far in 2020 to a record high of $35,655.