04 October 2013 16:52 [Source: ICIS news]
And even though new cars only account for about 20% of tyre sales, improved auto sales have also been a bright spot for butadiene (BD) and styrene-butadiene-rubber (SBR) producers. But should petrochemical firms that supply raw materials to the auto industry for body panels, interior trim and other components be worried about auto sales?
The short answer seems to be: Maybe.
Automakers reported September sales were down by 24% compared with a year ago, according to Autodata, a Woodcliff Lake, New Jersey, market research firm. The annual sales rate, or ?xml:namespace>
The downturn in September auto sales was expected due to an anomaly in the reporting calendar. Most of the Labor Day sales were included in August; the national holiday, a big weekend for car dealers, usually falls in September. But the calendar does not explain everything.
Ford was the only
It could be that September was simply an off month. Automakers and the petrochemical firms that supply them with raw materials continue to insist that October will be the single-biggest month for
Last month Chrysler announced that it had laid off the second shift of workers at the
"We have been producing vehicles since the end of June and have now built the critical number of vehicles we need to stock dealerships," Chrysler spokeswoman Jodi Tinson said in a statement to Automotive News. "We will temporarily idle the second shift so as not to put additional strain on our logistics partners to get these vehicles into the hands of customers as quickly and efficiently as possible upon release."
Sources said it is odd for automakers to add a shift to meet increased demand, which Chrysler did in the spring, and then announce layoffs, even if they are temporary.
Another concern among auto and petchem producers is the
In September, Ford sold more than 60,000 units of its top-selling F-150 pickup truck, an increase of 9.9% from a year ago. But GM sold just under 46,000 units of its newly designed Chevrolet Silverado and GMC Sierra pickups, a drop of about 8% from a year ago.
Auto analysts said Ford sold more trucks because it is still selling its older 2013 models and prices are anywhere from $4,000-8,000 (€3,000-6,000) less than the new GM trucks. GM, in the wake of the poor September sales numbers, said it will cut prices up to $1,500 on the new models.
Market sources said they will keep a close eye on pickup truck sales in the months ahead, as they are often an indicator of how well the overall economy is doing. But it will be tough to gauge the market over the next few months, several sources said. While October is, by all indicators, expected to be a good month for both automakers and petchem firms, many market participants expect a seasonal downturn in November and December as consumers focus more on Thanksgiving travel and Christmas presents.
Some sources expect that auto sales will return to the 16m unit annual rate in January, but others are starting to question whether the
"I just don't see it," said one source. "The market fundamentals are not there. Job growth is weak, wages are flat, and consumer confidence is not where we need it to be."
Several sources have said that what is fuelling robust auto sales now is pent-up demand from the recession. Once that demand is spent - and many feel it is close to being done - auto sales will drop sharply rather than taper off.
"We have a pretty good idea of what's going to happen the next few months," one source said. "After that, it's anybody's guess."
($1 = €0.73)
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