GLTAAC attended OESA and Harbour Results’ 2019 Automotive Tooling Update last week. Good event. Troy Nix (from AMBA) was enthusiastic and uplifting in the morning (as usual). However, in the afternoon, the forecast provided by Laurie Harbour (Harbour Results) was sobering.
While she doesn’t expect a full-blown recession next year, Harbour forecasts a total NA spend of only $6.8 billion in 2020 (down from $8.7 billion in 2019). Furthermore, LH anticipates the market will stay at just $6-8 billion for next several years due to cyclic factors and structural changes in the auto industry. These include major cost-containment initiatives by the OEMs (needed to facilitate significant investment in EV and AV development), as well as growing import competition from China (intensifying already severe price pressure on tooling).
As a result, Ms. Harbour believes 50-75 shops are likely to go out of business in the next 5-7 years, with smaller shops in the greatest peril. For more info, American Machinist published a good summary of Harbour’s forecast here.
