Looking Back & Ahead

Automotive Manufacturing & Production,  Jan, 2000  by Michael E. Robinet

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As North American light vehicle sales approach a record 19 million units for 1999, vehicle production is also slated to surmount 1997's all-time tally of 15.6 million units. CSM's latest setting for 1999 output resides at 16.9 million units, as every quarter in 1999 either set or matched the previous records.

As 1999 came to a close, a number of notable milestones were set. The year saw light truck production eclipse that of passenger cars in North America. The final split of 51.5% light truck is nearly 3 points higher than 1998, highlighting the ongoing shift and expansion of production capacity to the light truck arena.

Continued emphasis on stretching light truck capacity will be the watchword for 200CY. At General Motors, overall output of approaching 1.3 million units for the combined GMT800 pickup and SUV variants underscores the strong economies of scale and ability to spread development and tooling costs across more vehicles. When Ford's full-size pickups and SUVs are combined, volume reaches over 1.3 million units for 2000CY. This ability to pull variations from core platforms and focusing these variants on small, lucrative niches is the foundation for Ford's light truck strategy.

New Domestic Manufacturers are well positioned to add light truck capacity in key areas--positioning for high margin areas which allows their current buyer base options in the light truck arena. Gleaming examples are the Honda Odyssey compact van and Toyota Tundra mid-size/full-size pickup. By locating production in North America, both companies were able to stabilize currencies, better control costs, ease and quicken distribution, offer a more regionalized product, and the lower political friction that accompanies vehicle imports.

In total, light truck volume is forecast to contract year over year by 2% from 1999, though a slowdown is expected in several aging product lines. Passenger car capacity is slated to experience the same proportion of output decline and is not slated to return to 50% of overall production over the long-term future.