Automotive suppliers (Tier 1 and Tier 2) are facing a vote of 'no confidence' from the OEMs, stemming from concerns about the ability of suppliers to keep up with launches and handle a 16-million vehicle market in 2014. That's the latest from an editorial in IHS Automotive SupplierBusiness, supporting the findings of two other recent surveys, one from Booz & Co./Bloomberg US, and another from the Original Equipment Suppliers Association. [See blog: Automotive surveys show OEMs, suppliers still running strong - but for how long?]
While vehicle sales have rebounded in 2013, a trend that's expected to continue throughout 2014, automotive OEMs don't have a lot of confidence in their suppliers to meet vehicle launch dates and parts requirements. Many suppliers are at production capacity and there's a reluctance among some to invest in capital equipment to expand capacity as their customers would like to see.