Automakers are rapidly adding manufacturing capacity in North America to meet growing demand.
By Morgan Stanley's count, 3.5 million units of capacity will be added from 2011 through 2015.
Some analysts say that that is too much too fast and that automaker margins are bound to fall as supply outstrips demand. Others argue that new production capacity is essential now but could become a problem later.
Both sides have valid points, but there is hardly an immediate crisis.
The crisis was in 2009, when production plunged to 8.6 million units. Manufacturers closed dozens of assembly, powertrain and components plants to survive.
During the recovery, capacity was added with great discipline. As demand grew, carmakers restored shifts and added overtime rather than permanent employees.
Next they moved to third shifts. Only recently did manufacturers start to build plants.
North American capacity utilization is rising and is expected to stay close to maximum through 2018 even as more capacity comes online.
Automakers and suppliers are well-positioned to handle any future demand falloff without closing new plants by eliminating overtime and third shifts.