Harbour Report: Automotive Vendor Tooling Industry Sees Declining Sales

Harbour Report: Automotive Vendor Tooling Industry Sees Declining Sales

SOUTHFIELD – In yet another indicator that the automotive business is peaking, Harbour Results just published a report that said the automotive vendor tooling industry will spend $8 billion in 2019,  down from an estimated $9.2 billion in 2018, and $10.3 billion in 2017.

The key factor driving decreased tooling spend is the decreased number of North American vehicle launches predicted between 2019 and 2021 – 153 vehicles – versus the number of vehicles launched in North America between 2016-2018 – 183 vehicles. What’s more, the Detroit Three automakers, who source most of their tools in this region, are forecasted to source only nine vehicles in 2019.  

“The industry experienced a boom in 2017 with $10.3 billion in tooling spend and, based on the data, we expected 2018 to reach over $11 billion,” said Laurie Harbour, HRI President and CEO. “However, due to a number of vehicle cancelations and delays, we are predicting the year to be closer to $9.2 billion. The industry is $2.2 billion below forecast through first three quarters of 2018 resulting in a six-point dip in tooling shop utilization to 79 percent.”

HRI anticipates that some of what was planned for 2018 will spill into 2019 to help level out the tooling spend for the next three years. In addition to the 2019 forecast, Harbour IQ estimates future North American tooling spend to remain relatively stable with 2020 totaling $8.2 billion and 2021 at $9 billion.

“This forecast is based on current data and information, but issues like tariffs, automaker restructuring, and an economic recession could drastically impact the forecast resulting in a dip in tooling spend as much as $2 billion,” said Harbour.

“As the tooling market contracts, it is important that shops, specifically small shops that benefited from the increased outsourcing in 2017, prepare for the future. It is important that tool shops continue to focus on improving operations, smart investment in people and technology and strategic planning to remain competitive in the near and long term.”

For more information, visit, harbourresults.com

By |2018-10-31T18:15:30+00:00October 31st, 2018|Auto Tech, News|

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