Auto suppliers now say they're eager to add capacity

David Sedgwick
AUTOMOTIVE NEWS

Published: November 18, 2013 10:34 am ET
Updated: November 18, 2013 10:35 am ET

Related to this story

Topics Automotive

DETROIT ‒ Automotive suppliers have been content to let their plants run around the clock rather than build new factories or assembly lines to meet high demand. Until now.

According to a September survey by the Original Equipment Suppliers Association, 84 percent of suppliers doing business in North America said they are "somewhat" or "very confident" that their companies will make capital investments in 2014 and 2015.

An additional 11 percent said they were "slightly confident" they would add capacity, and only 5 percent said they did not plan any capital expenditures.

Survey respondents were more willing to invest than they were in July, when 66 percent were planning for "significant" or "somewhat increased" capital investments.

The upbeat survey comes at a time when North American light-vehicle production is on course to hit about 16.1 million units this year, up from 15.5 million units in 2012, according to LMC Automotive, a consulting firm based in suburban Detroit.

In 2014, North American vehicle production is expected to rise 3 percent to 16.6 million units, says LMC.

As demand rises, automakers are planning to expand capacity in years to come. According to a Morgan Stanley study, carmakers in North America will add 864,000 units of capacity in 2014, plus 400,000 units in 2015.

So it comes as no surprise that the OESA survey, which drew 85 responses from OESA's 450 members, showed suppliers at their most optimistic since January 2012.

Sixty-four percent said they had grown either "somewhat" or "significantly more optimistic" about their prospects for the next 12 months. In July, only 44 percent of respondents were more optimistic.

The survey also suggests that suppliers are struggling to keep up with demand. One respondent said his company was "busting at the seams," while another said "our growth plans continue to be aggressive."

Asked to identify their most pressing needs, 29 respondents said they were focusing on personnel issues, such as hiring more engineers, retaining employees and attracting skilled trades.

Fourteen suppliers said capacity constraints were their most serious challenge, and 11 identified product launches as their top concern.

Neil De Koker, CEO emeritus of OESA, said in September that North American automakers couldn't add any more workers to existing assembly plants and now must build new ones. "Now it's bricks and mortar," De Koker said.

At the time he was referring to North American automakers. Now it's true for suppliers, too.


Comments

Auto suppliers now say they're eager to add capacity

David Sedgwick
AUTOMOTIVE NEWS

Published: November 18, 2013 10:34 am ET
Updated: November 18, 2013 10:35 am ET

Post Your Comments


Back to story


More stories

Image

Gurit wins carbon fiber auto contract using new processing technology

January 23, 2015 9:22 am ET

Switzerland-based composite materials group Gurit Holding AG has been selected as the supplier for carbon fiber based automotive body panels at a...    More

Image

ACC's 'Roadmap' gaining traction

January 22, 2015 1:56 pm ET

Nearly a year into the launch of the latest effort to promote greater use of plastics in automotive applications, a trade group behind the push says...    More

Image

Auto supplier Cooper-Standard to trim operations in Europe

January 22, 2015 11:08 am ET

Novi, Mich.-based Cooper-Sandard Holdings Inc. said Jan. 21 it plans to consolidate its operations in Europe, including reducing manufacturing in...    More

Image

Hyundai Mobis investing $24 million to expand in Slovakia

January 22, 2015 9:28 am ET

South Korean auto parts maker Hyundai Mobis has unveiled plans to invest about 21 million euros ($24.1 million) to modernize and expand the output...    More

Image

Buick concept makes waves with plastic

January 21, 2015 2:25 pm ET

Buick's newly-debuted Avenir concept car includes a large polymer dash panel that's making waves — literally. The panel, glossy and smooth to th...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events