MANUFACTURING TRENDS: MOTORIZED VEHICLES
Whether or not 2016 produces another record, the big gains of the past several years are coming to an end. For some, the outlook is a case of the glass being more than half full.
“Our underlying normative assumption is car sales are go- ing to be just fi ne in 2017,” Gregg Sherrill, CEO of automotive supplier Tenneco Inc. (Lake Forest, IL), said in an interview following a speech at the Detroit Economic Club. “We’re up there in those mid-17 millions,” he said. “Every- body is kind of talking is there going to be a downturn and I can’t predict that with any more accuracy than you could. We don’t see it. We still see consumer confi dence where it should be, the age of the fl eet where it should be. If it’s fl at- tish…everybody should be pretty doggone happy.” Outside the US, Sherrill said Europe is improving and China is still an expanding market. “The tier 1 cities are kind of parking lots right now, but tier 2, 3 and 4 cities are not,” he said of China. “There’s a lot of population out there, still a lot of room to grow.”
‘Stretched This Baby’
At the same time, the industry has been using leases and longer loans to maintain sales growth in the US. “We’ve
stretched this baby as far as we can,” said Sean McAlinden, former chief economist of the Center for Automotive Re- search (CAR, Ann Arbor, MI). He spoke while still at CAR. “We’re a cyclical industry. This is perfectly natural,” he said.
If it’s fl attish…everybody should be pretty doggone happy.”
The industry is better able to withstand a sales slowdown than on the eve of the Great Recession, he said. “Are we going to ride it out better? Sure,” McAlinden said. “This industry is a lot more effi cient than the last time.” The longer-term source of concern is meeting federal
standards for fuel effi ciency and emissions for the 2022 through 2025 model years.
Automakers have adopted lighter materials such as aluminum and high-strength steels (which are stronger than traditional steel, so less is needed for assembly) to reduce vehicle weight and improve fuel economy. Ford Motor Co. (Dearborn, MI) has introduced aluminum body F-150 and Super Duty pickups. General Motors (Detroit) brought out a Cadillac CT6 that includes a mix of aluminum and high
A Ford F-150 in production. One challenge for automakers is whether weight can continue to be cut from profi table trucks without harming sales.
10 TRENDS
AdvancedManufacturing.org | December 2016
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