Nissan Motors (NASDAQ: NSANY) thinks that the US market will account for less than 15 million vehicles sales this year. Last year that figure was 16.1 million. The Japanese company says it is preparing for the worst. That is too bad, because Nissan tends to sell smaller, more fuel-efficient cars and not large pick-ups and SUVs. If it thinks the market for its products will get much softer, its says something about the entire industry.
According to Reuters, Nissan's CEO, Carlos Ghosn, said: "If we take the trend of the market in May and June it looks like we are going to be much below 15 million. Now I'm not sure if this is going to continue for the rest of year. We are preparing ourselves for the worst."
If a typical car sold in the US costs the consumer $25,000, Nissan's prediction indicates that total sales in the world's largest vehicle market will fall off by about $30 billion. That is nearly one quarter of Ford's (NYSE: F) annual sales.
Having a lot of small cars in the line-up has turned out to be a massive blessing for Japanese car companies. Honda (NYSE: HMC) and Nissan (NASDAQ: NSANY) did well in May US car sales. They have very few huge SUVs and pick-ups in their model lines. By contrast, Detroit's big auto companies have had their sales bolted to the sales of trucks. Consequently, their sales were murdered in May.
Honda's shares moved up a remarkable 8.6% overnight in Tokyo, a reward for being in the right place at the right time. But, that underestimates what Honda has done by sticking to selling small cars in America during the years when pick-ups were doing so well. Other Japanese car companies benefited, but to a lesser extent. Shares in Nissan rose 5.3% and Toyota (NYSE: TM) was up 3.2%. Honda and Nissan were the only major car companies that had sales increases in the US for May.
The news is more than a changing of the guard from Detroit to Japan. That has been going on for more than a decade. It is also a sign that Honda and Nissan are beginning to best Toyota, their larger rival, because their models mixes are more suited to a $4-per-gallon gas environment.
Toyota has been the major threat to US car companies. That may be changing.
Douglas A. McIntyre is an editor at 247wallst.com.
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There is never a shortage of jobs. Some people have two or three jobs. The classified adds have thousands of jobs all the time -- always. If someone is unemployed there is a reason and it is definitely not a lack of jobs.
Sometimes it is a regional lack of jobs, General Motors (NYSE: GM) and Ford Motor (NYSE: F) in the rust belt states of Michigan and Ohio have downsized, but foreign manufacturers Toyota (NYSE: TM) and Nissan Motors (NASDAQ:NSANY) in the Southeast have up sized. This does not help the states where jobs are leaving, and indeed causes other massive problems like weakening the tax base and pushing housing and other elements of the local economy down. However, from a national unemployment standpoint that does not count.
In our discussions of unemployment and the economic picture we attempt to understand the government figures and attribute some meaning. We know the government is prone to put things in their best light (lie) sometimes and there is discussion about what a true measure would be, but does that really matter? It is more important that whatever criteria is used remain constant so that we can use the data for comparisons, not that it be altered often as people become concerned about the exactness of the figures.
It might be time we need to account for a new set of metrics. What are the costs of retraining? How could these costs be distributed without expanding government -- not something I would support. We know that some people are not employable or are only marginally employable because they simply do not have the capability to do many jobs. I have numerous jobs, although generally speaking, I have created them myself over time. Clearly education and training are a factor, along with over all aptitude.
There is never a shortage of jobs. Some people have two or three jobs. The classified adds have thousands of jobs all the time -- always. If someone is unemployed there is a reason and it is definitely not a lack of jobs.
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