2014 MANAGEMENT BRIEFING SEMINARS

Center of North American auto industry moves further southwest, IHS says

Michael Robinet: “Don't let go of your engineers. You're going to need them.”

Photo credit: Greg Horvath
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TRAVERSE CITY, Mich. -- The geographic center point of the North American auto industry, which was located in central Illinois in 2000, has now crossed south into Arkansas from Missouri and moving southwest about 14 miles a year.

The calculation by consultant IHS Automotive is derived from the production data of North American assembly plants. Michael Robinet, managing director of IHS Automotive, said at the 2014 Management Briefing Seminars that the relentless move south and west best shows what is happening to automotive production in North America. Automakers are pouring investments into Mexico.

Meanwhile, automakers are planning a “sobering” number of product launches -- 161 -- worldwide in 2018, the result of a proliferation of global platforms, competitive pressures on their products and rising fuel economy regulations, Robinet said.

The “heavy lifting” for those new vehicles is being done now, and the efficiency demands being made on those designs are larger than at any time in the past.

For example, Robinet said, if a manufacturer plans to keep a vehicle in production for four years, the initial design must achieve a 20 percent gain in fuel economy over what it replaces just to keep up with the 5 percent annual fuel economy gains demanded of automakers.

Robinet said that efforts to improve fuel economy have so far focused on powertrain and aerodynamic gains, “but the heavy lifting is going to have to come from lightweighting.”

He said automakers are more disciplined about their product cadence and showing a greater willingness to intervene when sales show something is wrong.

“You just can’t sit on a vehicle for eight or nine years and think that people are going to continue to buy it,” Robinet said.

“Don’t let go of your engineers,” Robinet said. “You’re going to need them.” 

You can reach Larry P. Vellequette at lvellequette@crain.com.


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