Submitted by Mike Shedlock via MishTalk.com,
On May 3, industry analysts are pumped as April 2016 is the best April in history for car sales. Some analysts expect record sales for the entire year.
I doubted that then and I doubt that even more now.
Please consider an email from “FW” a 15-year electrician at Ford who chimes in with some relevant anecdotes and a more recently, a communication bulletin from the plant where he works.
On April 27, “FW” pinged me with these comments…
Hi Mish
Like I stated in my last email, I work for Ford. I work in a high volume assembly plant. We build Ford Escape and Lincoln MKC. We build over 700 vehicles a shift and work two 10 hour shifts a day. We also work a lot of Super Sundays (weekend extra production)
About month ago we went through model change. After the model change it is normal for the volume to go down in order to work out all unexpected problems. Also for the first 3 weeks of the new model we don`t ship any new cars to the dealers in case there is some issues discovered.Just now we starting back our normal volume and normal shipping.
I expected that once things go back to normal we will be working a lot of Super Sundays to make up lost production. I knew of at least 13 Super Sundays that were schedule in next few months. However I just learned from production manager that all 13 had been cancelled.
Maybe it is just the normal slow down and it will pick right back but I am not very confident.
Sincerely
FW
Letter From Plant Manager
Yesterday, FW forwarded me this.
Let’s Communicate!
Indeed, let’s communicate.
Sales are so hot, we need to cancel second and third quarter scheduled overtime.
US Auto Sales Back on Track? Another Record Year?
On May 3, I reported US Auto Sales Back on Track? Another Record Year?
Motor Vehicle Sales
“North American-made vehicle sales for April are running a little higher than March, at a 13.5 million annualized rate vs 13.3 million.”
Given that April had five full weekends, an extra selling day, and Easter came in March, is a 0.2% pickup over March for the big three such an amazing feat?
Record Sales?
Forget about it. GM sales were lower and Ford is canceling scheduled overtime shifts.
By the way, sales are recorded not when consumers buy cars and truck. Rather, sales are recorded when cars and trucks are shipped to dealers.
Inventory Piling Up
The lots are a cram packed with inventory piling up.
Not only are new car lots stuffed to the max, so are used car lots.
In case you missed it, please consider Peak Preowned: Used Car Inventory Hits Record Level; Congratulations, You Are Qualified.
To tie everything together, reader “FW” is the person who emailed me on April 10 asking How do I Short the Subprime Auto Sector?
Addendum:
I was not familiar with the term “door marmac losses”.
Here is the explanation: “It was a break down of the equipment that caused 8 hour shut down of the production.”
Plant Management seems to be macro-economically handicapped upstairs.
“The monthly auto sales data does, in fact, reflect sales to final customers, not wholesale sales to dealers”
http://fortune.com/2014/04/30/an-insiders-guide-to-auto-sales-reporting/
If that is right it ruins the current articles fear mongering.
Are sales to leasing companies considered as final sales or is there another category they are placed in?
Seems they would be final sales, but that doesn’t indicate an increase in individual purchase and ownership and the longer term economic impact would probably be different than for individual purchases.
“Are sales to leasing companies considered as final sales or is there another category they are placed in? Seems they would be final sales, …” ———– Anonymous
I would guess the opposite. Lease = rental …. doesn’t the leasor actually own the vehicle …. which is especially apparent when at the end of the lease, the leasee dumps the car back in their laps?
Stucky,
That’s sort of what I was wondering about, does a purchase of, say, 10,000 vehicles by a leasing or rental company count as 10,000 sales no matter whether or not they are actually leased out?
I would think it would, but that would present a different picture than 10,000 buyers going out to the dealerships and buying their own vehicle.
The fleet leases by rental companies and the government are counted in the car sales.
The leases by individuals are also considered a sale.
“The leases by individuals are also considered a sale.” ———– Admin
And when the person RETURNS the vehicle … what is that? An un-sale? Buyback?
Not arguing with you … I just don’t get it. Seems like fucking accounting tricks to me.
Channel stuffing is where car and truck sales are recorded when shipped to the dealers. Buyers and leasors are irrelevant in the BLS like calculations.
You might not be able to believe in those car sales so here’s something you can believe in:
“April Marks 12th Straight Month of Record Gun Sales”
AP
BY: Stephen Gutowski
May 4, 2016 4:03 pm
This April saw the most gun-related background checks of any April on record, making it the 12th month in a row to achieve a high water mark for gun sales.
The FBI ran 2,145,865 checks through the National Instant Background Check System last month, according to the agency’s records. That represents more than a 400,000 increase over the previous record set in April 2014. Though the numbers represent the best April on record, the month also saw the fewest checks of any month thus far in 2016.
The trend of record-setting months began last May. In that period the background check system has seen records set for the most checks in a day, month, and year. Thus far 2016 is on pace to pass 2015 as the best year on record for gun-related background checks.
The number of background checks is considered a reliable barometer for gun sales as nearly all sales made through licensed firearms dealers must by law include such a check. Some states also require a background check for gun sales between private citizens.
Such checks are not an exact metric for gun sales due to a number of factors. Most states do not require the checks for private sales. Many states require the checks during their gun carry permit processes.
“Based on varying state laws and purchase scenarios, a one-to-one correlation cannot be made between a firearm background check and a firearm sale,” the FBI noted on their background check report.
The record-setting streak has coincided with renewed calls by Democrats for new gun control measures. Both President Obama and Hillary Clinton, the presumptive nominee for the Democratic presidential nomination in 2016, have publicly expressed support for Australian-style gun confiscation regimes in the United States. Clinton has also told donors in private that she believes the Supreme Court is “wrong” about the Second Amendment.
Terror attacks on American soil and abroad may also be driving gun sales.
Gun rights advocates said calls for gun control from politicians such as Hillary Clinton have fueled the surging gun sales and believe the record levels will continue.
“This record setting firearm sales trend will continue all the way to Election Day,” said Alan Gottlieb of the Second Amendment Foundation. “If Hillary Clinton wins, firearm sales will really go through the roof. Gun owners and people concerned about personal security have lost trust in the political class to protect their rights.”
I can testify that every car lot around here, both new and used, is packed to the gills!