Automotive industry executives should be singing the same old song in 1997 that they've hummed the past several years.
North American light-vehicle sales for 1997 are expected to settle in around 15 million cars and trucks sold, according to both industry analysts and carmakers. If that figure holds true, it will mark the fourth consecutive year that sales hovered around the 15 million level, after stalling out at 14.2 million vehicles sold in 1993.
While not an industry record — that would be in 1986, when auto sales hit 16.3 million — it is a sign of rare consistency for a market used to riding a wave of more extreme ebbs and flows.
``No longer can anyone say that if sales are up this year, they'll be down dramatically the next,'' said Ross Seymore, equity automotive analyst with First of Michigan Corp. ``That stability affords time for automakers to be more proactive and plan for the future, while bringing in suppliers as partners to help them meet targeted goals.''
Plastics parts and material suppliers, however, could be adding a few new verses in 1997 to an increasingly familiar tune. The expectations continue to mount: Carmakers want a complete systems package from suppliers that provides top-quality products with high performance at the lowest possible cost.
Of the mantra for success — price, quality and service — voiced by the auto industry, price could be the shoehorn opening the door for many suppliers. Due to low inflation, carmakers are trying to avoid giving customers sticker shock by raising prices in an ultra-competitive market. That trickles down to the production process, where automakers have an eye turned to reducing costs.
``Cost solutions are the means for suppliers to differentiate themselves from the competition and take advantage of opportunities,'' said marketing director Paul Brent of Delphi Interior & Lighting Systems, an auto supplier based in Warren, Mich. ``That means providing low-cost, innovative products that lead to the integration of systems into car assembly.''
Increasingly, many car companies contain costs by teaming with preferred suppliers during the design stage for products and to recast existing vehicles. Chrysler Corp. helped pave the way several years ago by bringing in suppliers while developing platform concepts for new vehicles. Chrysler economist Van Bussmann said platforming helped lead to 6 percent production growth per year by boosting assembly line efficiency and lowering materials costs.
Taking the teaming concept a step further, Ford Motor Co. opened the Technology Review Center in September to allow suppliers to exhibit their latest technologies to more than 10,000 Ford engineers worldwide.
``We recognize that it's a two-way street with suppliers, and our center is just a part of that,'' said Ford spokeswoman Cheryl Eberwein. ``We're analyzing the total cost of producing cars from design to showroom, and suppliers are involved in the entire process.''
But collaboration also has exacted its price on suppliers. During 1996, many processors were gobbled up by larger competitors as they jockeyed for position with carmakers. At the same time, many smaller companies developed alliances with larger processors to come up with new designs.
Those mergers and acquisitions should continue in 1997, said equity auto analyst Dean Gulis of Roney & Co. The next wave might see more backward integration, as Tier 1 suppliers consolidate with Tier 2's to boost business, Gulis said.
The news continues to be good for the use of thermoplastics in vehicles. DuPont Co. estimates that plastics use in vehicles will grow by 10 percent between 1997 and 2002. DuPont expects the volume to increase to 3.9 billion by 2005 from a base of 2.2 billion pounds used in 1990.
Much of that growth should come from under-the-hood and electronics/electrical applications, said Erik Fyrwald, DuPont's director of marketing and sales for engineering plastics and automotive engineering materials. Nylon already replaced aluminum in many air-intake manifolds because of its lower cost and weight; carmakers now look at putting similar molded components into other powertrain systems.
Thermoplastics also are increasing in use as connectors for electrical sensors and solenoids for such areas as power door locks, windows and seat adjusters, said Fyrwald, who is based in Troy, Mich.
``It's taken many years for the comfort level to grow with plastics materials,'' Fyrwald said. ``Now, we're in a period when many OEMs are willing to try new materials that drive down costs and lower car weight.''