CHICAGO A clear majority of automotive parts and components manufacturers maintain a "guarded" but positive outlook for their industry, down slightly from Marchs measure but higher than a year ago.
Although fewer suppliers are upbeat than earlier this year, 60 percent of the manufacturers surveyed for the Original Equipment Suppliers Associations (OESA) Automotive Supplier Barometer index expressed a positive outlook in May, down from 64 percent in March and 66 percent in January.
"The stable sentiment driver is the growth in North American vehicle production volumes," Dave Andrea, OESAs senior vice president of industry analysis and economics, commented on the results of the latest survey.
Since the beginning of the year, little has changed apart from nagging worries over the instability of heavily indebted European nations and "pre-election stagnation," Andrea said. Concerns also center around finding an alternative to the resin nylon 12, a key input, the production of which was halted when an Evonik Industries chemical plant exploded in Germany in March of this year.
Despite the Evonik disaster, the sentiment index is still higher than it was one year ago following the Japan earthquake/tsunami crisis and associated supply chain disruptionsinterruptions that, since the first half of 2011, have forced the auto industry to look hard at supply chain risk management, Andrea pointed out.
"Strategies that companies began pursuing last May are part of the standard operating mode now," he added. Those strategies include building buffer inventory stocks, qualifying multiple suppliers where possible, and sourcing materials and components closer to the point of use.
Nearly 80 percent of the 108 companies responding to a section of the May survey asking suppliers to gauge impact and recovery efforts related to the resin shortage resulting from the Evonik plant disruption said they dont believe they have been or will be affected by the material shortage.
Four percent said they are now impacted by the Evonik disruptions, while 10 percent expect to incur a future impact. Seven percent of respondents launched work-around actions to avoid any supply-chain interruptions.
"Without a doubt, the industry has been expeditious in addressing a potential supply chain disaster. Even so, the situation clearly shows how dependent vehicle assembly schedules are to the weakest link in a supply chain," Andrea wrote.
Of the 15 companies who say they have been affected by the Evonik disruption, nine procure materials directly for their production, eight are concerned about component shortages and five companies are concerned about customer production schedule reductions.
One-third, however, said they were "very confident" that they will meet customer releases over the next three months.