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11/12/2018 | 1 MINUTE READ

North American Automotive Vendors Expected to Spend Less on Tooling in 2019

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Automotive tooling spending is lower than forecasted, meaning that smaller shops need to prepare for the future, says Harbour Results, which just released its study on the subject. 


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Harbour Results Inc. (HRI) recently released the results of the Harbour IQ in-depth study on the current state of the automotive vendor tooling industry. The analysis predicts 2019 automotive vendor tooling spend to be $8 billion, a contraction over previous levels.

The key factor said to be driving decreased tooling spend is the decreased number of North American vehicle launches predicted between 2019 and 2021 (153 vehicles) versus the number of vehicles launched in North America between 2016 and 2018 (183 vehicles). Furthermore, the so-called Detroit Three (General Motors, Ford and Fiat Chrysler), which source most of their tools in this region, are forecasted to source only nine vehicles in 2019.

“The industry experienced a boom in 2017 with $10.3 billion in tooling spend and, based on the data, we expected 2018 to reach over $11 billion. However, due to a number of vehicle cancelations and delays, we are predicting the year to be closer to $9.2 billion,” says Laurie Harbour, HRI president and CEO. “The industry is $2.2 billion below forecast through first three quarters of 2018, resulting in a six-point dip in tooling shop utilization to 79 percent.”

HRI anticipates that some of what was planned for 2018 will spill into 2019 to help level out the tooling spend for the next three years. In addition to the 2019 forecast, Harbour IQ estimates future North American tooling spend to remain relatively stable, with 2020 totaling $8.2 billion and 2021 at $9 billion.

“This forecast is based on current data and information, but issues like tariffs, automaker restructuring and/or an economic recession could drastically impact the forecast, resulting in a dip in tooling spend as much as $2 billion,” says Ms. Harbour.

“As the tooling market contracts, it is important that shops, specifically small shops that benefited from the increased outsourcing in 2017, prepare for the future. It is important that tool shops continue to focus on improving operations, smart investment in people and technology and strategic planning to remain competitive in the near and long term.”


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