Assembler investment announcements
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- Office of Automotive Vehicle Research Odette School of Business University of Windsor Windsor, Ontario N9B 3P4
- OFFICE OF AUTOMOTIVE VEHICLE RESEARCH
- Major Automotive Assembler Investment Announcements
- GLOBAL VEHICLE PRODUCTION BY REGION OF THE WORLD
- TABLE 2
- TABLE 3 NORTH AMERICAN SALES FORECAST (2013)
- TABLE 4 NORTH AMERICAN LIGHT VEHICLE PRODUCTION FORECAST (units)
- TABLE 5 NORTH AMERICAN LITE VEHICLE PRODUCTION FORECAST (percent)
- TABLE 6
- TABLE 7 TOTAL WORLDWIDE INVESTMENT ANNOUNCEMENTS BY ASSEMBLER - FULL YEAR (Canadian Dollars - In Billions)
- TABLE 8 TOTAL WORLDWIDE INVESTMENT ANNOUNCEMENTS BY COUNTRY OF INVESTMENT
- Total $12.779
Dr. A.J. Faria, Co-Director Office of Automotive & Vehicle Research Odette School of Business University of Windsor Windsor, Ontario N9B 3P4 (519) 253-3000, ext. 3101 (519) 973-7073 (FAX) E-mail: AD9@UWINDSOR.CA February 2013 INDEX INTRODUCTION 1 WORLDWIDE AUTOMOBILE ASSEMBLER INVESTMENT ANNOUNCEMENTS 2 Chrysler 11 B. Ford 11 C. General Motors 12 D. The Japanese Assemblers 13 E. South Korean Assemblers 15 F. Other Assemblers 16 SUMMARY 19 INVESTMENT DETAILS 23
The OAVR was formed in 1995 within the Odette School of Business at the University of Windsor and serves the management/marketing/forecasting needs of the Canadian vehicle, automotive and automotive parts industries. The OAVR serves as a research, consulting, data gathering, production and sales forecasting, engineering and testing, training and resources centre for all parts of the automotive and transportation industries. The goal of the OAVR is to support the management needs of the automotive assembly, vehicle transportation and automotive parts industries. The OAVR is prepared to help you study industry trends, determine new markets for your firm to enter, assess product sales potentials, assess your competitive landscape, develop management training programs for your company, assist in developing marketing plans, help you institute lean manufacturing systems, provide basic industry information and data, and provide overall management consulting services. The Co-Directors of the OAVR, Pete Mateja and Tony Faria, have many years of automotive, trucking and transportation experience. Pete Mateja, Co-Director Office of Automotive and Vehicle Research Odette School of Business 519-253-3000, ext 4943 pmateja@uwindsor.ca A. J. Faria, Co-Director Office of Automotive and Vehicle Research Odette School of Business 519-253-3000, ext 3101 AD9@uwindsor.ca
The following report presents an overview of major capacity growing investment announcements made by the Detroit 3, the Japanese assemblers, the South Korean assemblers, and other automobile assemblers around the world (European, Chinese, Indian, etc.). The investment announcements reported in detail cover the period from January 1, 2012 to December 31, 2012. The sources used to gather the investment information for this report included: (1) Press releases from the automobile assemblers; (2) An examination of automotive assembler websites; (3) Ongoing examinations of general automotive industry websites such as The AutoSource, Autonews, Wardsauto, AutosInsider, Automotivedigest and The Auto Directory; (4) Contacts with major automotive associations; (5) Ongoing contacts with major automotive publishers and automotive research organizations; and (6) An ongoing examination of all issues of major automotive industry publications. This report continues the series of Major Automotive Assembler Investment Announcements reports dating back to 1995. A three page report summary beginning on page 19 provides a quick overview of the major report findings. WORLDWIDE AUTOMOBILE ASSEMBLER INVESTMENTS ANNOUNCEMENTS Total worldwide production of light and medium duty vehicles in 2012 was approximately 81 million units, up 6.6% from the 76 million units assembled globally in 2011. As the North American market continues to recover, for the second consecutive year, vehicle assembly grew more in North America (17.6%) than global production growth. China remained the largest vehicle production and sales country in the world in 2012 and will clearly hold this lead for the foreseeable future. Total vehicle production for 2012, with a forecast for 2017 by region of the world, is shown in Table 1.
As can be seen in Table 1, the Asia/Pacific region which includes China, India, Japan and Korea now accounts for over 49 percent of global vehicle assembly and will make up more than half of global assembly in 2017. In 2004, the Asia/Pacific region accounted for only one-third of global vehicle assembly. Western and Eastern Europe account for nearly 25 percent of global assembly but will lose a point of share by 2017 while North America accounted for 19.1% of global assembly in 2012, down from 32.2% in 1995. North America will fall under 19 percent of global light and medium duty assembly by 2017. The production forecast for 2017 shown in Table 1 indicates continuing production growth for North America with an increase in vehicle assembly over 2012 of 2.8 million units by 2017. In fact, the forecasted vehicle assembly of 18,291,000 light and medium vehicles for 2017 will be a new North American vehicle assembly record. While this is a positive for North American parts suppliers, vehicle assembly in the Asia/Pacific region will grow by over 11 million units from 2012 to 2017. Of the forecasted global increase in production of 19.5 million units from 2012 to 2017, 16.7 million units or 85.6 percent of the global growth in vehicle assembly is expected to be outside of North America. Total vehicle production in North America in 2012 was up 17.6% from 2011. Final 2012 North American vehicle production totalled 15,475,654 units (see Table 2 for production figures by country). By historical standards, 2012 was the best North American production year since 2006. From 1997 through 2005, North American vehicle assembly topped 16 million units each year peaking at 17,653,760 in 2000. Light vehicle production in Canada for 2012 was up 15.4% to 2,454,064 units while light vehicle sales in Canada for 2012 were up 5.7% to 1,677,990 units. Canadian light vehicle sales in 2012 were only 52,719 units short of the all time sales record of 1,730,709 units achieved in 2002. Light vehicle production in the U.S. for 2012 was up 19.5% to 10,140,812 units while production in Mexico for 2012 was 2,880,778 units, up 12.6% from 2011. For the fifth straight year, light vehicle assembly in Mexico exceeded assembly in Canada and, once again, established a new assembly record for Mexico. Light vehicle unit sales in the U.S. market, which is very important to many Canadian parts suppliers, were up 13.4% in 2012 to 14,492,398 units. Light vehicle sales in Mexico for 2012 were up 5.7% to a total of 956,618 units. Vehicle sales for all of North America for 2012 totalled 17,127,006 units, an increase of over 1.8 million units and 12.1% over 2011. For 2013, light vehicle sales in North America are expected to grow to approximately 18,340,000 units, an increase of over 1.2 million units or 7.1% percent over 2012 North American sales (see Table 3). According to the Office of Transportation and Machinery, U.S. Department of Commerce, the North American OEM parts market for 2012 grew to an estimated $288.1 billion. The U.S. parts market grew to an estimated $183.9 billion; the Mexican parts market grew to an estimated $55.6 billion; and the Canadian parts market grew to an estimated $48.6 billion. As auto production grows, as it is currently forecasted to through 2017, so will the OEM parts market. The Original Equipment Suppliers Association (OESA) estimates that the global automotive parts industry exceeded $950 billion in 2012. As such, the OEM parts market outside of North America is over three times the size of the North American market. Canada has no significant export markets for automotive parts other than the U.S. Canada exported an estimated $18 billion in automotive parts to the U.S. in 2012 and only $987 million to all other countries around the world (with Mexico accounting for more than half of that amount). More automotive parts are being exported to the U.S. from Mexico (over $33 billion) and Japan (over $19 billion) and China is now exporting over $12 billion in automotive parts to the U.S. As such, Canadian suppliers need to find export markets other than the U.S. North American light vehicle production for 2013 is expected to increase by 4.6% over 2012 to 16.2 million units. North American light vehicle production forecasts by home market of the assembler for 2013 through 2017 are shown in Table 4 with a percentage breakout in Table 5. Vehicle assembly in North America is expected to exceed 16 million units in 2013 and 2014 and exceed 17 million units from 2015 to 2017. The Detroit 3 accounted for nearly 60 percent of North American light vehicle assembly in 2011. This figure was artificially high due to limitations on assembly at Japanese plants in North America brought about by natural disasters in Japan and Thailand. Assembly at the Detroit 3, South Korean and European plants in North America is expected to be only slightly higher in 2013. There will be a significant increase in assembly at the Japanese plants in North America in 2013 as the Japanese continue to make up for lost assembly in 2011 and attempt to recapture market share. As well, capacity is being added at a number of Japanese plants in Canada, the U.S. and Mexico as the Japanese continue to shift more assembly to North America from Japan. From 2012 to 2017, light vehicle assembly at Detroit 3 plants in North America will grow by slightly over 600,000 units; assembly at South Korean plants will grow by over 100,000 units; assembly at European plants will grow by over 190,000 units; and assembly at Japanese plants in North America will grow by nearly 1,270,000 units. As a percent of all North American assembly, the Detroit 3 will decline from 54.5% in 2012 to 51.2% in 2017; the Japanese will grow from 32.7% in 2012 to 35.8% in 2017; while the South Koreans will continue to account for just under 5 percent of North American assembly and the European companies will continue to account for approximately 8% of North American assembly. As recently as 2000, the Detroit 3 accounted for 75.6% of North American production share. For 2012, the light vehicle sales market share of the Detroit 3 in North America declined to 43.4% from 46.6% in 2011 (see Table 6). Detroit 3 market share was artificially high in 2011 due to shortages of Japanese vehicles in the market. The Japanese companies regained lost market share in 2012 (up to 37.3%) with the European companies also growing slightly and the South Koreans remaining unchanged. While the global automotive market has still not fully recovered, assemblers are continuing to invest in new capacity based on each individual company’s sales expectations and on each company’s forecasts of where the market will be growing. The total announced worldwide capacity investments of the major automotive assemblers (see Table 7) over the January 1, 2012 to December 31, 2012 period documented in this report were $16.13 billion (Canadian). This is a decrease of 32.5% from the $24.136 billion (Canadian) reported in 2011 and very close to the $17.112 billion of new capacity investments announced in 2010. As can be seen in Table 8, the countries receiving the largest new capacity investment announcements over the past four years have been China ($40.222 billion), Brazil ($7.966 billion), Mexico ($7.363 billion), Russia ($2.816 billion), India ($2.265 billion) and the U.S. ($2.082 billion). Over 57 percent of all new capacity investment announcements made over the past four years have been in China. Table 7 summarizes new capacity investment announcement totals by major global assemblers for the past four years. Table 8 summarizes new capacity investment totals by country of investment for the past four years. For all of 2012, total worldwide new capacity investment announcements were down over $8 billion from 2011 reflecting the heavy announcements in 2011 and the ongoing poor light vehicle market in Western Europe. As with past reports in this series, only investments in new assembly plants or to increase capacity at existing plants are included. Investments to upgrade plants that have no effect on capacity are not included. As well, investments by the assemblers in OEM owned parts plants are not included. Complete details on all new capacity investment announcements made in 2012 are shown in the appendix to this report beginning on page 23. The majority of investment announcements reported by the assemblers were in U.S. dollars. Some announcements, though, were in euros, yen, won or other currencies. Appropriate exchange rates as published in the December 31, 2012 issue of The Globe and Mail were used to convert to Canadian dollars. The information provided at the back of this report includes the date of each investment announcement, details of the new capacity being added, the dollar amount of the investment, the additional units of capacity or total new units of capacity at the facility, the date that the new capacity is expected to come on-line, the number of new jobs created, and the location where the new capacity will come on-line. As can be seen in Table 7, most of the major global automotive assemblers made new capacity announcements in 2012. As can be seen in Table 8, the countries receiving the largest investment announcements during 2012 were China (by a large margin), Mexico, Russia and Brazil. China alone accounted for 59.6% of all the investment announcements made in 2012. There were two new capacity growing announcements made for Canada in 2012, both by Toyota (in Woodstock and Cambridge). New capacity announcements from the Detroit 3 in 2012 were made for China, Mexico and Russia. TABLE 2 NORTH AMERICAN VEHICLE PRODUCTION (2012) Percent Country Unit Production Change United States 10,140,812 +19.5% Canada 2,454,064 +15.4% Mexico 2,880,778 +12.6% Total 15,475,654 +17.6% _____________________ Source: Automotive News Data Center 
TABLE 3 NORTH AMERICAN SALES FORECAST (2013) Sales
Country Forecast (Units) U.S. 15,534,000 Canada 1,742,000 Mexico 1,064,000 18,340,000 _______________________ Source: OAVR
TABLE 6 NORTH AMERICAN LIGHT VEHICLE SALES MARKET SHARE
TABLE 7 TOTAL WORLDWIDE INVESTMENT ANNOUNCEMENTS BY ASSEMBLER - FULL YEAR (Canadian Dollars - In Billions)
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