China gets the lion’s share of vehicle production capacity investments in 2014

China once again captured the bulk of global investments for new or expanded vehicle production capacity last year, winning more than half of the auto industry’s total outlays earmarked to add or expand output.

The U.S. and Mexico followed China in planned investment but trailed far behind, according to an annual study that tracks outlays by automaker.

Automakers announced plans to spend $24.1 billion on new assembly plants or additional capacity worldwide last year, a 37 percent increase from $17.6 billion in 2013.

Plant investments in China, the world’s largest light-vehicle market ranked by sales, totaled 52.7 percent, or $12.7 billion, of global spending planned by automakers.

Planned outlays in the U.S., the second-biggest market, totaled $4.18 billion, more than double 2013 outlays and 17 percent of worldwide outlays, according to a report by the University of Windsor in Ontario.

The planned investments were unveiled from Jan. 1 through December 2014. The authors of the study gathered information from automakers, news reports and other auto industry sources and groups.

Mexico followed the U.S. with $3.4 billion in new capacity investment plans in 2014.

Mexico failed to generate any planned investments in 2013. In 2012, automakers detailed plans to invest $2.63 billion in Mexico, and, in 2011, $3.3 billion.

Nearly 60 percent of all spending for new or extra capacity made over the past four years have been in China, according to the report.

Total investment announcements in China over the past four years totaled $48.7 billion.

Production increases as sales rise, and with China’s middle class growing, the country’s boom will continue, said Pete Mateja, co-director of automotive and vehicle research at the University of Windsor’s Odette School of Business.

“China is going to be a leading center for investments for a number of years,” he said. “If you produce in a country that you’re selling to, you minimize your currency risk.”

Over the past four years, Mexico ($9.3 billion), the U.S. ($7.7 billion) and Brazil ($7.6 billion) followed China in new capacity investments.

Last year, only six countries, including China and the U.S., reported new capacity investments: Brazil, Mexico, Poland and Russia.

While the U.S. and Mexico continued to gain investment, Canada struggled to attract capital outlays. The last time Canada reported new investment was in 2012 with $180 million. In four of the past five years, Canada attracted no new investments.

Planned investments in Canada have been concentrated on existing operations, rather than new plants or extra capacity, the authors said.

“Unless that changes, the Canadian auto industry is at risk,” Mateja said. “We’re going to be fighting to hold onto what we’ve got.”

In 2014, new capacity announcements from Ford, General Motors and Fiat Chrysler were made in China, Brazil and the U.S.

Fiat Chrysler made one new capacity investment totaling to $1.8 billion and 250,000 units for a new plant in Brazil, where it will begin assembling the Jeep Renegade this year.

Ford made an investment of $80 million to add 40,000 units at its Louisville, Ky., truck plant and plans to add 1,000 jobs at its plant in Oakville, Ontario, which will build the Ford Edge. The automaker is looking to expand capacity in Brazil and Africa and has put plans to expand in Russia on hold.

GM announced plans for two new capacity investments in China during 2014, totaling $2.5 billion and 840,000 new units of capacity. GM also plans to invest $3.6 billion to expand assembly capacity in Mexico and $11 billion in China by 2018.

The report said the automaker is considering a truck plant in Thailand and an upgrade and expanded capacity in India.

You can reach Hannah Lutz at hlutz@crain.com

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