Once upon a time in the land of the US economy, there was a period of slowdown and decline. The retail sales, which had been thriving for seven months, suddenly dipped in October, signaling a decrease in demand at the beginning of the fourth quarter [cabbfb79]. This decline, coupled with a significant drop in producer prices, led economists to believe that the current rate hiking cycle of the US central bank had come to an end [cabbfb79]. Despite the higher interest rates, the economy and job market showed resilience, giving hope for a soft landing in terms of inflation and economic growth [cabbfb79].
But the troubles didn't end there. The industrial production of the US also suffered a blow in October. It fell more than expected, with a decrease of 0.8% compared to the consensus estimate of -0.3% [cabbfb79]. The major contributor to this decline was the output of motor vehicles and parts, which experienced a significant drop of 10% due to strikes at major automakers [cabbfb79]. However, there was a slight increase of 0.1% in the manufacturing index, excluding motor vehicles [cabbfb79]. This downward trend in industrial production indicated a slow decline in the economy, unless external intervention occurred [cabbfb79].
Meanwhile, the Chicago Fed National Activity Index for October revealed that economic activity was expanding at a slightly slower rate than its historical trend. The index, composed of 85 economic indicators, showed declines in production, sales, orders, inventories, personal consumption, housing, and employment [9cf39155]. Despite the decrease, the index remained above the level that historically indicated economic contraction. Economists' outlook for the future improved, with most no longer expecting a recession [9cf39155].
As the economy faced these challenges, there was another blow to the manufacturing sector. Orders for durable goods, which were meant to last three years or more, fell more than expected in October. The decline was primarily driven by a drop in orders for motor vehicles and parts, as strikes by the United Auto Workers (UAW) union against major automakers took a toll [25ce5eb8]. Transportation equipment orders also plunged, particularly in the civilian aircraft sector [25ce5eb8]. The strikes and shortages caused by the UAW's actions had a significant impact on the manufacturing industry.
Amidst all these economic struggles, the holiday shopping season approached, raising concerns about the impact on consumer spending and the overall economy. Additionally, the article mentioned U.S. new vehicle sales and the producer of radars for the IRIS-T air defense system supplied to Ukraine, highlighting the interconnectedness of various sectors and industries.
In this tale of economic slowdown and manufacturing decline, the US economy faced challenges from declining retail sales, industrial production, and durable goods orders. Strikes, shortages, and external factors played a significant role in shaping the economic landscape. However, there remained hope for a soft landing and improved outlook for the future.
Car sales in the U.S. are also slowing down as buyers face sticker shock [e456601c]. Rising car prices, higher interest rates, and a shift in consumer preferences towards used cars are contributing to the decline in sales [e456601c]. Automakers are offering incentives and discounts to attract buyers [e456601c]. The slowdown in car sales is expected to have a negative impact on the overall economy [e456601c].
In January 2024, the production and sales of passenger cars in China amounted to 2.083 million units and 2.115 million units, up 49.1% and 44% YoY respectively. However, compared to December 2023, the production and sales of passenger cars fell by 23.2% and 24.2% respectively in January, possibly due to a short-term drop in market demand following the concentrated release of demand before the Lunar New Year [74fd3872].
According to a report from AASTOCKS.com, the market share of Chinese brand passenger cars in January 2024 surpassed 60% [10787fcc]. The sales volume of Chinese brand passenger cars reached 1.278 million units, a YoY growth of 68.6% [10787fcc]. The market share of Chinese brand passenger cars increased by 8.8 percentage points to 60.4% [10787fcc]. This indicates a significant increase in the popularity and demand for Chinese brand passenger cars in the Chinese market.
ACT Research has revised its 2024 Class 8 production and sales expectations upward in its latest North American Commercial Vehicle Outlook. January Class 8 net orders were up 45% year over year to 27,125 units. Total Classes 5-7 orders also rose by 14% y/y to 19,954 units. U.S. Class 8 tractor orders surprised to an above-replacement level of 16,765 units, up 44% y/y. The increase in demand is corroborated by industry leaders at ACT Research's semi-annual seminar. The U.S. economic current strength is also helping to boost the Class 8 outlook. Mexico-bound Class 8 production is expected to rise considerably in 2024. The largest piece of the North American market, U.S. for-hire truckload, is unlikely to be helpful in driving volume this year. [45cb101f]
Daimler Truck, a division of Daimler AG, a German multinational automotive corporation, has forecasted flat earnings as the global economy slows down [cf42cd92]. The company expects its earnings to remain unchanged due to the slowdown in the global economy [cf42cd92]. This forecast was made in March 2024 [cf42cd92].
Experts Andrej Divis and Steve Latin-Kasper believe that any market softening in 2024 will be shallow and short-lived. They presented at the Work Truck Week in Indianapolis, stating that the commercial truck business is in the final stages of a historical reset. Divis from S&P Global Mobility mentioned that the Class 6 market is returning to its regular market share positions after being delayed in rebounding from the 2020 recession. Latin-Kasper noted that the economic softening in 2023 and 2024 is a result of decelerating growth rather than contraction. Divis also mentioned that trailer registrations may contract in 2024 but rebound in 2025. He also highlighted that EPA 2027 emission regulations could increase the cost of a new Class 8 truck by $15,000 to $40,000, leading many fleets to order new trucks in 2026 to avoid the additional upfront costs. [ccbf72b0]