Production bottleneck? It's a good thing
David Sedgwick is a special correspondent for Automotive News.
TRAVERSE CITY, Mich. -- At an auto conference here this month, all the chatter was about production bottlenecks and suppliers that were running six days a week to keep up with demand.
Which was music to my ears.
It's always more fun to struggle with rising sales than with falling demand. Toyota is a case in point.
Robert Young, Toyota's North American purchasing chief, says his company is dispatching platoons of engineers to help laggard suppliers straighten out their production schedules.
At the auto conference, he predicted that Toyota would produce a record number of vehicles in North America this year, to be followed by record numbers next year and the year after that.
He also said that his purchasing team is studying every component shipped from Japan to see whether production could be transferred to North America.
Young clearly was urging nervous suppliers to stay the course. According to a July poll by the Original Equipment Suppliers Association, suppliers are less optimistic about business conditions than they were two months earlier.
But poll respondents said they are still hiring workers, buying tooling and looking cautiously for possible acquisitions. Their verdict: The North American market is still expanding, despite some recent wobbles.
Which is why I'm optimistic. I think the North American industry is going to muddle through this year. And if you are in the right segment -- say, infotainment computer chips, or turbochargers, or collision avoidance radar -- the market looks like a free-for-all.
Young seemed pretty eager to provide guidance to suppliers. So you might as well bet on the future. If you wait until the smoke clears, it will be too late.
You can reach David Sedgwick at email@example.com.