Autos Investment Round-Up: Keeping Up With Demand
In BMI 's regular round-up of production investments, we track the latest projects from the production side of the industry and analyse trends that we see developing on a regional basis. In doing so, we hope to build a picture of any potential hubs that may be developing, as well as company strategy in terms of production bases and export programmes. Our latest update reviews investments from late May to June 2013.
|Date Announced||Country||City/State/Region||Company||Value||Brief Description||Date Onstream|
|Source: BMI research; n/a - not available|
|May-13||US||Indiana||Fuji Heavy (Subaru)||US$400mn||Expansion of capacity to 400,000 units a year, while adding the Impreza to the line with 900 new jobs created.||2016|
|May-13||US||Ohio||Honda||US$70mn||Converting seat plant to production of Acura NSX model.||2015|
|May-13||US||Michigan||GM||US$44.5mn||Constructing a logistics centre to assemble parts for the Lansing vehicle plant, creating 200 new jobs.||2014|
|May-13||US||Marysville, Port Huron||Samvardhana Motherson Reflectec||US$40mn||Expansion of existing produciton facility in Marysville and addtion of a new warehouse in Port Huron, creating 350 jobs.||2013-2015|
|Jun-13||US||Georgia||ZF Industries||n/a||New plant for production of clutches and powertrain components for trucks.||2013|
|Jun-13||US||Tennessee||Magneti Marelli||US$54mn||New plant for production of headlamps and rear lights.||2013|
|Jun-13||US||Huntsville, Troy, Jackson||Toyota||US$200mn||Increasing machining capacity and production of parts for V-6 engines.||2015|
|Jun-13||US||Tennessee||Volkswagen||US$40mn||New logistics centre to cut delivery time of parts for US-built Passat.||2013|
|Jun-13||US||Missouri||GM||US$133mn||Adding stamping press to improve production flexibility.||2015|
|Jun-13||US||Michigan||Brembo||US$109mn||Expanding existing capacity of brake products.||2013-2015|
While some of the latest investment projects show that the trend of investing in fuel-efficient engines, shown in our last round-up (see 'Autos Investment Round-Up: Fuel Efficiency Brings in Investment', May 8) , is still a priority, supplying parts to meet growing vehicle demand in North America is also driving investment. Not only that, but there has been an uptick in investment in parts logistics, ensuring that both parts for vehicle production and spare parts for popular models, can be delivered more efficiently, increasing the competitiveness, which we have highlighted in the US autos manufacturing sector.
Toyota Motor's plan to invest US$200mn in three engine plants, in order to increase production of its V-6 engines, continues the theme of investing in powertrains. However, in contrast to some of the projects discussed in our previous round-up, which were new engine facilities or assembly lines, this is an expansion of its current capacity, in order to accommodate increasing demand for the vehicles powered by these engines as US sales stay strong. It also enables the company to be more localised in its production to avoid the effects of currency fluctuation.
Parts suppliers are also moving to keep up with growing vehicle sales, as Samvardhana Motherson Reflectec, ZF Industries and Brembo are all adding additional capacity. For Magneti Marelli, however, this is the first step into US production in response to increased business from vehicle manufacturers. The scale of the project suggests the company expects further growth, as it plans to increase the plant's workforce from an initial 90 workers to 850 over the next four years.
However, one notable trend among these projects is investment by carmakers in parts logistics. Both Volkswagen (VW) and General Motors Company (GM) have invested in warehousing and logistics facilities to cut down on the delivery time for parts. BMI believes this is an equally important part of increasing the competitiveness of US production operations. In the case of GM, the centre will ensure the timely delivery of parts for the nearby vehicle plant in Lansing, while for VW the centre will distribute parts around the world for US-built models. This means that sourcing spare parts in other countries will not be a barrier to producing in the US and increases its attractiveness as a hub.