Analysis
Total vehicle production in North America will set a new record by the end of this decade, based on a WardsAuto forecast through 2018.
The region’s auto makers will run assembly plants at more than 80% capacity utilization in first-quarter 2012 for the first time since second-quarter 2006, the forecast also suggests.
Production in 2018, including medium- and heavy-duty trucks is forecast at 18.1 million units and will break a record that will have held for nearly two decades of 17.66 million set in 2000.
The WardsAuto forecast is based on anticipated industry and economic growth that should become more in line with long-term historical trends that were disrupted by the debacle of the 2008-2009 U.S. financial collapse and recession.
Output is expected to be driven by pent-up demand following the 2009 trough, with solid year-on-year growth for six years through 2015, for the longest such string since the years following World War II. However, production is seen temporarily flattening out before resuming growth and hitting new highs by the end of this decade.
Meanwhile, the WardsAuto short-term light-vehicle production forecast is being trimmed for 2012 by 15,000 units, primarily due to some shuffling of output among manufacturers, and not because of a change in the outlook for overall demand.
This year’s forecast could be raised in next month’s update pending further analysis of U.S. sales results in January and February and how strong March appears to be trending.
The seasonally adjusted annual rate of sales surprised on the high side with a combined January-February tally of 14.5 million LVs, well above the initial WardsAuto 14.1 million-unit forecast earlier this year.
North American LV production now is forecast at 14.5 million units for 2012, 10.4% above 2011’s 13.1 million. On the basis of continued demand, LV output is forecast at 15.1 million units for 2013, an increase of 4.8% from 2012.
In addition to growing demand, capacity increases that will replace overseas sourcing of some vehicles will help spark a 6.5% year-over-year increase in forecasted LV production in 2014 to 16.1 million units.
Capacity utilization for total vehicles for full-year 2012 is forecast at 78.8%, compared with 70.7% in 2011 and well above the 44.8% to which the industry plummeted in 2009.
First-quarter 2012 is pegged at 83.4% capacity utilization, including 79.0% already on the books for January, 85.1% in February and 86.1% in March. It will be followed by 82.1% for the April-June timeframe.
The last time capacity utilization for any quarter topped 80% was 81.3% in second-quarter 2006, when annual capacity was 12% higher than what is projected for 2012.
Additionally, North American auto makers will have more available straight-time production in 2012 and the ensuing years.
Available straight-time output in 2012 of 16.7 million units is higher than the 16.2 million available in 2011. And it will continue to rise in 2013 and 2014 as more manufacturers increase the capabilities of existing plants and open new ones – much of that for import replacement and export volume.
