Mexican Media Brands
Carmakers Cautious About Effect of Washington’s Fiscal Gridlock
Carmakers report mixed readings about the impact on sales of the federal government's shutdown and possible debt default, The New York Times notes.
#economics
Share
Carmakers report mixed readings about the impact on sales of the federal government's shutdown and possible debt default, The New York Times notes.
Hyundai predicted on Monday that U.S. car sales could drop as much as 10% this month, blaming consumer uncertainty caused by Washington's fiscal paralysis. General Motors agrees that "growing anxiety" among would-be buyers threatens the auto industry's spectacular sales pace.
Analysts expect car sales in the U.S. will reach about 15.6 million this year, up nearly 8% from 2012. Demand slipped 4% year on year in September, marking the first such decline since the beginning of 2011. But observers attribute the shrinkage to a quirk in the sales calendar.
Several other carmakers aren't yet concerned about Washington's wrangling. Ford and Chrysler tell the Times they don't yet detect any change in the country's overall sales activity.
Still, the Times notes that four carmakers Ford, Hyundai, Nissan and Toyota are offering payment deferments for as many as four months to government employees idled by the federal shutdown.
RELATED CONTENT
-
Ford’s $42 Billion Cash Cow
F-Series pickups generate about 30% of the carmaker’s revenue. The tally is about twice as much as what McDonald’s pulls in.
-
China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.
-
GM, Ford Evaluate Possible Economic Slump
General Motors and Ford say they have bolstered their cash reserves in case the trade war between the U.S. and China triggers a global recession.