Wary Car Firms Plan Cutbacks In 4th Quarter --- Year-End Output Forecasters, Lowest Since '82, Reflect Fears of Possible Slump
DETROIT -- U.S. auto makers, in a mood of caution, are planning to build fewer cars in this year's fourth quarter than in any last quarter since the recession-plagued final period of 1982.</br></br>While a shift toward van and light-truck production accounts for some of the drop in car assembly, the factory schedules nonetheless indicate that the economy's "soft landing" hasn't yet erased fears of a slump in Detroit. "The other side of a soft landing is a soft recovery," said Mary Ann Keller, an auto industry analyst with Furman Selz Mager Dietz & Birney in New York. "We haven't created the pent-up demand," necessary for a sales boom, she added.</br></br>The Big Three's cautious year-end production plans sharply contrast with the aggressive production schedules they set and mostly kept earlier this year, despite criticism by analysts that those schedules were unwarranted. Meanwhile, foreign-based U.S. auto makers are continuing their trend of boosting car production.</br></br>The U.S. operations of Japanese auto makers continue to account for a growing portion of U.S. car production. Plants owned by foreign auto makers or operated as joint ventures with U.S. companies plan to build 312,609 cars in the fourth quarter, or 18.3% of the total, up from 205,875 cars, or 10.9% of the total a year ago.</br></br>Overbuilding earlier in the year caused auto makers to trim their bulging inventories of vehicles by sponsoring aggressive sales promotions, including cash rebates to consumers. That helped reduce inventories but, analysts say, it also prompted consumers who were considering purchasing later in the year to do so before then. The effect will be fewer car and truck sales in the coming months. Consumers also will be slow to purchase the 1990 models because some of the models carry the sharpest price rises in recent years.