The ongoing restructuring of the U.S. auto business will result in foreign automakers making more vehicles in North America than the Detroit Three by 2012, according to a Grant Thornton LLP study out Monday.
In the coming years General Motors Corp., Ford Motor Co. (NYSE:F) and Chrysler Group LLC are expected to reduce assembly capacity in North America by more than 4 million units to 7.5 million units, according to Grant Thornton research. The firm expects all other automakers, a group that includes Toyota Motor Corp., Hyundai Motor Co., Volkswagen AG and Honda Motor Co. Ltd. (NYSE:HMC), to increase their North American capacity by about 20% to 8 million units.
The projections are a reminder that while U.S.-based auto companies are restructuring, the overall auto manufacturing sector remains vibrant. But the shift would have profound ramifications for the U.S. supplier base, a group that is
in the middle of what is expected to be a painful restructuring.
Survivors of a supplier shakeout will need to court new business not just from the Detroit companies, but foreign automakers as well.
Kimberly Rodriguez, co-leader of Grant Thornton's global automotive practice,
said:
A new order is emerging where the Detroit companies may no longer be the volume leaders in their home market. Suppliers largely dependent on Detroit OEMs will have to present a new value equation to potential customers from Europe and Asia if they want to participate in the accelerated shift that is coming. Rodriguez's group said suppliers need to aggressively deleverage their balance sheets, and either become a consolidator or be consolidated. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
