SOUTHFIELD, MI – Harbour Results Inc. (HRI), a business and operational consulting firm for the manufacturing industry, conducted an in-depth analysis of the automotive value chain and found that although the industry is strong today, it is on an unsustainable path and must be prepared for another slowdown.
Several of the key points leading to this conclusion include the following.
- Although the North American automotive industry is predicted to produce more than 20 million vehicles in 2015, the industry will experience a plateau going forward to 2022.
- The Detroit 3 automakers have less than 45 percent of North American market share, down from 87 percent in 1962.
- Regulatory issues, customer demand, advanced technology and economic factors are putting automaker profits at risk. Factors that are eating away at profitability include increased complexity, high mix, low volume variants, increased capital investment, increased tooling costs, product development cost and timing, high launch costs, and warranty costs.
- With an unprecedented number of North American vehicle launches scheduled for 2017, 2018, 2019; 40, 49 and 39 respectively, resources will be constrained.
- A shift to low-volume vehicles with a high mix of product will result in 80 percent of the models being under 100,000 units in annual volume by 2018.
- Growing complexity and the demand for new and innovative technology coupled with automaker price pressures is putting a squeeze on Tier 1 supplier profitability.
- The tool and die industry continues to face increased challenges, including increased tool complexity, shorter lead times, lack of skilled labor, tooling jobs on hold, capital equipment needs and cash flow management. Looking to the future, there continues to be a capacity gap within the tool and die industry.
According to HRI President and CEO Laurie Harbour, “The automotive industry has reached an inflection point, and the entire manufacturing value chain will need to change the way it traditionally does business to remain profitable and prepare for a future downturn."
“As market forces make it more difficult for manufacturing companies to operate profitably, Harbour Results saw a need to provide data and information to help companies improve operational effectiveness and better plan for the future,” continued Harbour. “So we developed Harbour IQ, which unlocks the door to never-before-seen data and information critical to manufacturers in developing a successful long-term business strategy while managing the day-to-day business.”
Harbour IQ a source for performance benchmarking, financial, operational and trend data, and information for the tool and die industry. The tool provides users real-time access to relevant data and information that can be aggregated and queried into custom reports as well as manufacturing trend reports, white papers and various other technical reports.
Harbour IQ has a number of partners that support the tool by providing information, data and insights. These include:
- Executive Level – Tebis America Inc. and LMC Automotive;
- Pro Level – Clinton Aluminum, Expert Technical Training, Makino and American Mold Builders Association (AMBA); and
- Basic Level – Die Cad Group, Siemens, HRSflow, Mueller Prost, QuadWest and PolyOne.
For more information on HRI Automotive Industry Analysis or Harbour IQ contact Harbour Results Inc. at 248/552.8400.