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Saturday, 11 August 2012 10:18

CAR Report: Is the automotive industry speeding toward a 100-million unit year?

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ACME — If the automotive supply chain thinks the global car business is crazy now, they should wait until 2020.

In that year, analysts at Polk predict the global automotive market will reach the 100-million-vehicle mark thanks to growth in emerging markets and a return to pre-recession levels in mature markets, including North America.

So says Anthony Pratt, director of forecasting for the Americas at Polk, speaking at theCenter for Automotive Research 2012 Management Business Seminars held at Grand Traverse Resort in Acme.

Closer to home, the firm predicts sales of 14.3 million units in North America this year and 12-percent growth between now and 2014, when the industry will realize 16 million units on the continent. From there, the North American market will plateau through about 2017 and again fall into its familiar cyclical pattern, Pratt said.

“We believe growth will increase because of pent-up demand, but to achieve 17 million (units) is unlikely,” he said.

But IHS Automotive is more optimistic. The firm expects North American sales to top out around that 17-million unit mark around 2016.

Unlike in 2000 – when sales in North America hit 17.2 million units, which represented 31 percent of global sales – the 17.4 million-unit milestone in 2016 will look much different, said Michael Robinet, managing director of IHS Automotive Consulting. In 2016, North America will only account for 18 percent of global sales, and about half of the vehicles produced in-continent will be made south of Ohio. About 30 percent of those vehicles will be designed outside of the market, he said. Moreover, the top five OEMs will control some 70 percent of the market.

Suppliers will also need to get used to a much more fast-paced product environment, Robinet said.

“Technology is turned over faster and engineering and development staffs have to move faster and innovate more quickly,” he said. “It puts a lot of pressure on the supply base but it makes for a very interesting and innovative environment to go with it.”

While automakers pulled back on new products in the depths of the recession, they’ve ramped up considerably in the time since then, Robinet said. IHS Automotive predicts 133 vehicle launches this year and about the same number in 2013, which translates into considerable engineering and tooling volume in the 18 months or so leading up to each launch, he said.

“It will be a very active next couple of years for the supply base,” Robinet said. “(Suppliers) feel it now … and it’s not going to stop. It’s going to continue for three to four years before it shallows out in 2016.”

Additionally, he said those individual launches now share more common parts. Whereas a decade ago a platform may have been shared with two or three vehicles, now automakers have designed their platforms to be much more flexible and serve a matrix of vehicles – even between different size classes.

“Now, they share systems content and architecture between different sizes,” Robinet said. “That’s the Holy Grail automakers want to move to.”

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