U.S. Automotive Sector Coasts into 2016 on Strong Market, but Sales Could Hit Brakes Next Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. automotive sector, which is the largest and most closely followed of those in the Industrial Manufacturing Industry, has seen a remarkable recovery in the past few years, with domestic sales and production hitting an all-time high. David Pickering, Industrial Info's Vice President of global research for the Industrial Manufacturing Industry, said in a presentation that domestic sales likely would exceed 18 million units in 2016.

Click on the video below to listen to Pickering discuss the outlook for the U.S. automotive sector.


However, Pickering cautioned that industry leaders expect momentum to "slow down a bit" toward the beginning of 2017.

Since the end of the Recession, automakers have been ramping up spending at a stronger pace each year. But grassroot projects have largely fallen by the wayside, as the companies instead turn to modifications of existing facilities: expansions, upgrades, retoolings, etc.

Nonetheless, capital and maintenance spending in the U.S. automotive sector hit a record in 2015 and is slated to exceed $16 billion this year, although some of the projects included in that total could face delays. Pickering said the automotive sector is aware that sales could slow in 2017 and is doing what projects it can in the near term.

Geographically, the Mid-Atlantic, Southeast and Southwest regions have benefited economically from automakers shifting their facilities to non-union markets, Pickering said.

International players also have boosted the U.S. automotive sector. Last year, more than 50% of investment in the sector came from owners based outside the country. In addition to Fiat, which purchased Chrysler several years ago, automakers such as Volkswagen AG (Wolfsburg, German) and AB Volvo (Gothenburg, Sweden) have invested in new facilities.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.