The North American auto industry is in the midst of a dramatic construction boom.
Five automakers are building plants in Mexico. Volvo Cars has chosen South Carolina for a new one of its own. Fiat Chrysler is eyeing Toledo, Ohio, for a new plant or a major expansion. General Motors is spending billions of dollars to improve and enlarge assembly plants across the U.S. and Mexico.
Have they lost their minds? Maybe not.
Automotive history is a story of boom and bust -- periods of rapid plant expansion as sales surged, followed by market downturns that burdened manufacturers with underused plants, saddled dealers with acres of excess inventory and idled thousands of workers.
Moreover, the U.S. market likely is now at its peak with annual sales of about 17 million cars and light trucks a year, and forecasters expect only modest growth over the next few years. The current building spree will increase North American production capacity by roughly a fifth over the next six years, according to market forecaster IHS.
But so far, it isn't setting off alarm bells.
"I don't want to say things are different this time around," says Joe Langley, an auto production analyst at IHS who knows well the industry's track record.
Yet that's essentially what he, other analysts and industry executives are now saying.
Globalization and Detroit's contraction during the Great Recession have changed the structure and nature of the North American auto industry fundamentally. As a result, even with seven new plants coming on line in the next half decade, they say, the risk of ending up with another capacity glut is low.