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.

North American Production Investment May-Jun 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.

This article is tagged to:
Sector: Autos
Geography: North America, North America, United States, North America, North America

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