Wednesday, January 19, 2011

European and Asian Automakers to Build More Cars than Detroit's Big Three in N. America by 2012

According to a new study from financial advisory firm Grant Thornton LLP, European and Asian automakers will churn out more cars in North America than Detroit's 'Big Three' by 2012. The study expects that after the completion of the restructuring of the domestic auto industry, the combined capacity of General Motors, Chrysler Group LLC and Ford in North America will fall by more than 4 million units or a 35 percent reduction compared to 2008, for a total of 7.5 million units in 2012.

At the same time, all other foreign automakers combined are expected to increase their North American production by around 1.5 million a year or 20 percent, to more than 8 million units.

"A new order is emerging where the Detroit companies may no longer be the volume leaders in their home market," said Grant Thornton LLP Principal Kimberly Rodriguez, co-leader of the firm's global automotive practice.

Grant Thornton LLP reports that Volkswagen and BMW will nearly double their combined production, increasing their output capability to around 1 million units a year while Toyota, Honda, Nissan and Hyundai are projected to expand their combined production by 20 percent, or nearly 1 million units.

The study finds that the dramatic shift in production will have a large impact on North American parts suppliers that will need to secure more business from European and Asian makers.

"Suppliers largely dependent on Detroit OEMs will have to present a new value equation to potential customers from Europe and Asia if they want to participate in the accelerated shift that is coming," said Kimberly Rodriguez.


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