America’s Auto Industry Today: Behind the Numbers

If you look at the news and numbers focused around America’s auto industry, what you see, at first, is that it’s in a recovery phase, and that production is up.

This is true—July production was up by 10%, and overall production is up by about 7.5%.[1] However, as with anything, to get the full picture, you must really scratch beneath the surface. Major auto makers, such as Nissan and Chrysler, are seeing booming sales and therefore booming production. Likewise, if you’re a supplier working with them, then your business is booming accordingly.

But the fact is, these two companies make up a large part of the overall auto production, but they aren’t the only ones in existence. While their numbers contribute significantly to the statistics, there are plenty of other auto makers and suppliers that haven’t launched new models and seen sales skyrocket, and therefore are still in for a longer, slower recovery.

Articles such as this one point out that while Nissan is currently in the process of expanding its North American facilities, “the auto industry is in another, long-term disruptive phase” that can bring new opportunities, but other challenges as well. Mexico’s auto expansion, for instance, has “raised alarm bells.”

Additionally, while the auto suppliers, who are serving the needs of the few, highly successful auto makers, are therefore expanding, many others are “investing in new products and technological capabilities, not new bricks and mortar,” and are remaining cautious, as “history tells us that global political unrest or a sudden spike in fuel prices can put the brakes on sales momentum in a heartbeat.”[2]

The fact is, America’s auto industry is a great one, as are the numerous suppliers that keep it going. But while some can’t keep up with demand, plenty of others are still struggling, and it’s important to look beyond the surface numbers. It’s critical to examine all the facts and not assume that a few great success stories mean that everyone’s business is surging.

The hope is that we will all see continued recovery and success in the future, but we must also remain cautious and realistic, and not take everything at face value.

 

[1] http://www.industryweek.com/global-economy/strong-auto-production-spurs-us-factory-growth-july

[2] http://wardsauto.com/blog/wised-suppliers-expand-new-tech-not-more-volume