Harbour Results, Inc. Predicts 2019 North American Automotive Vendor Tooling Spend to be $8 Billion
Drop in spending directly related to reduced launches from the Detroit Three Automakers
SOUTHFIELD, Mich., Oct. 31, 2018 – Harbour Results, Inc. (HRI), a leading authority to the manufacturing industry, recently released the results of the Harbour IQ in-depth study on the current state of the automotive vendor tooling industry. The analysis predicts 2019 automotive vendor tooling spend to be $8 billion.
The key factor driving decreased tooling spend is the decreased number of North American vehicle launches predicted between 2019 and 2021 – 155 vehicles – versus the number of vehicles launched in North America between 2016-2018 – 183 vehicles. Furthermore, 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. However, due to a number of vehicle cancelations and delays, we are predicting the year to be closer to $9.2 billion,” said Laurie Harbour, HRI president and CEO. “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/or 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.”
About Harbour IQ
Harbour IQ is an intelligence tool for the manufacturing industry that provides data and intelligence critical for companies to better understand the marketplace and make informed business decisions. Harbour IQ is available at two distinct levels to cater to businesses of different sizes. Harbour IQ Small Business is an affordable intelligence tool that provides up-to-date data and insights for small shops in the tool and die industry. Information is pushed directly through an easy-to-digest email format. Harbour IQ Enterprise provides real-time access to advisors, intelligence, expertise and data for large-scale manufacturers in the tool and die industry, as well as customized insights and information.
About Harbour Results, Inc.:
Harbour Results, Inc. a leading business and operational consulting firm for the manufacturing industry offers operational and strategic advisory expertise, and proprietary assessment programs to help optimize a business’s performance. Focused on small- to medium-sized manufacturers, many of which are family owned or privately held, HRI utilizes its knowledge, experience and relationships to build sound strategies and implement operational improvement. Headquartered in Southfield, Michigan, Harbour Results was founded in 2005 by industry analyst Laurie Harbour. Today, the Harbour Results team is comprised of manufacturing experts, and clients also have exclusive access to Harbour Results’ network of partner companies and worldwide resources. For more information, visit, harbourresults.com, Twitter or LinkedIn.