Auto OEMs ask suppliers to increase capacity


Looming potential parts shortages have automakers and Tier One suppliers pushing downstream to smaller suppliers to increase capacity. Will they respond in the affirmative?

A huge jump in retain vehicle sales in February is a good news/bad news scenario. The good news is that OEMs are revising their forecasts, predicting that the market will hit the high 12 million range and perhaps even break 13 million, according to a report from Supplier-Business, an IHS Global Insight Company. That raises the specter of a parts shortage, and fears that suppliers, many who cut back by reducing capacity and labor, won’t be able to keep up. “These fears have been accentuated recently, with parts orders from automakers surpassing production forecasts, leading to shortages that have hamstrung output of popular models,” said SupplierBusiness.

Coming off a big sales month, capacity issues of their suppliers continues to be worrisome to automotive OEMs and Tier Ones. SupplierBusiness said that automakers are looking for ways to encourage suppliers to boost capacity. While U.S. retail sales are “soaring” many suppliers are being cautious, and smaller parts makers are “hanging back,” the report noted....
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