Page 50 - MetalForming April 2016

Automotive Outlook
Expect automakers worldwide to produce 91.5 million vehicles in 2016, up from 88.6 million last year. China, North Amer- ica and South Asia countries will account for the lion’s share of that gain. By 2023, production may total 108 million units, with China, South Asia and Europe responsi- ble for most of the increase. Photo cour- tesy of Toyota Motor Sales USA.
expect slight growth, aided by mone- tary stimulus, currency depreciation and pent-up demand across various sectors, according to Wall. Russia and Brazil are two emerging markets that are slowly reversing negative GDPs, but aren’t expected to be in positive terri- tory until 2017.
Oil prices continue to affect the world and domestic economy, and also affect consumer and automaker choices. Expect oil prices to rise after bottoming out this year, but oil prices may not return to 2014 levels until about 2025.
Zeroing in on automotive, Wall reads the world market as flat heading into 2016, with weaknesses in emerging markets such as Brazil and Russia only temporary. He expects the market to lift 2.3 percent this year, with sales totaling about 100 million by 2020. Through 2023, according to IHS, sales in mature markets will decline by 1 percent, with China sales increasing by 33 percent and sales in emerging markets rising by 49 percent. Expect automakers world- wide to produce 91.5 million vehicles in 2016, up from 88.6 million last year, with China, North America and South Asia countries accounting for the lion’s share of that gain. By 2023, produc- tion may total 108 million units, with China, South Asia and Europe respon- sible for most of the increase.
U.S. and North America Holding Steady
Housing and business fixed invest- ment in the United States will gain strength, while consumer spending continues to grow steadily, IHS finds. A slight rise in oil prices will give a boost to the producer side of the U.S. econo- my, but not so much as to shock con- sumers into altering their driving habits
or vehicle choices significantly.
On the producer side, as Wall notes, falling commodity prices have reduced automotive production costs. Material costs in a typical 3500-lb. U.S.-pro- duced vehicle—including steel, alu- minum, plastic resins rubber, glass and iron−have dropped by 51 percent since
2011, to below $1200.
Given that general economic back-
drop, Wall offers a detailed forecast for U.S. automotive production and con- sumption. With the economy looking up, U.S. consumers are increasingly planning to buy new vehicles. The increase is not just based on need, according to Wall, but genuine want.
He notes the strong correlation between new housing starts and full- sized-pickup sales. As mentioned, housing is strengthening, with housing starts recovering though they aren’t expected to reach the previous peak of 2005-2006, when starts approached 2.5 million. In that same timeframe, U.S. sales of full-sized pickups topped out at nearly 350,000. By 2009 and into 2010, housing starts and pickup sales dropped below 100,000. In 2016, with housing starts expected to top 1.5 mil- lion, full-sized-pickup sales should reach 150,000. Sales are boosted by improving commercial-fleet sales, redesigned vehicle offerings and low gas prices.
Active Launch Schedule
Wall sees U.S. light-vehicle sales reaching about 18.2 million units in 2016, up from 17.5 million in 2015. Higher interest rates, legislated vehicle
content and urbanization of the popu- lation will combine to slow sales momentum. Compared to last year, the traditional Big Three—General Motors, Ford and Fiat/Chrysler—are expected to boost North American light-vehicle production by 2.5 percent to 9.5 million units in 2016. GM features an active launch schedule, including the Cruze, XT5, Acadia and Bolt, among others, while Ford rolls out new ver- sions of the F-250/350 and the Conti- nental. Chrysler introduces the all-new Pacifica to its production schedule. Toyota, Honda Renault/Nissan and Hyundai, tagged the Asian Four in IHS’s report, will increase North American production 6.1 percent to 6.8 million units. Look for new-domestic launch- es including the Honda CR-V and Ridgeline, and the Suburu Impreza. The German Three, Volkswagen, BMW and Daimler, will boost production 3.9 percent to 1.3 million units.
Captial needs are expected to increase with a new wave of launches on the horizon. From 25 North Ameri- can program launches in 2017, expect 40 in 2018 and 49 in 2019−quite a jump.
Mexico Production to Continue Rising
By country, from 2016 to 2023, expect Mexico to boost North American light-vehicle production by 5 percent, an increase of more than 1.4 million units. Production in Canada may drop 4.6 percent, representing a decline of 669,000 units. U.S. production is expected to decline by 0.1 percent, a drop of 86,000 units. These numbers
48 MetalForming/April 2016
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