U.S. Auto Sales Put Up a Big Number, but Show Signs of Strain
Beyond the domestic market, automakers face other potential challenges. The potential tremors from an economic slowdown in China became more palpable this week as Apple slashed its financial forecast, citing disappointing iPhone sales there.
Lower consumer spending in China could hurt G.M., Ford, Toyota and other automakers because they now depend on that country to drive global growth, and some reap considerable profits there. Ford is especially vulnerable because it has been losing money in China and is trying reorganize its operations there.
Those concerns seemed distant in the upbeat remarks of officials on Thursday.
Ford said any worries about a slowdown in China were not likely to be a factor in domestic demand. “It’s certainly something we look at, as a global company,” Emily Kolinski Morris, Ford’s chief economist, said of the China outlook. But as far as the United States market, she said, “I think consumers are looking at their personal financial situations.”
She added that unemployment remained low and that surveys showed strong consumer confidence.
Likewise, a Toyota executive played down the prospect of continued rate increases by the Federal Reserve — and tougher borrowing terms for car buyers.
“Interest rates are always going to be a concern at some level,” Jack Hollis, a group vice president at Toyota’s North American manufacturing arm, said in a conference call. “But it hasn’t slowed the industry to a point of concern.”
Still, Ford and G.M. are preparing for more difficult times. Both companies are cutting jobs and costs in North America. G.M. said in November that it was idling five North American plants and aiming to eliminate more than 14,000 blue- and white-collar jobs.
Earlier in 2018, Ford announced a plan to reorganize its worldwide salaried work force of 70,000 with the goal of having a leaner staff by the second quarter of 2019. The move is expected to eliminate several thousand jobs.