CHICAGO The persistent
financial woes of some European nations have begun to move the
needle on how automotive suppliers are planning their
investments over the next couple of years.
Some will hew closely to their
North American base of operations, which presents a more
positive picture for vehicle demand, according to a survey of
members of the Troy, Mich.-based Original Equipment Suppliers
The OESAs sentiment index
increased to a near-neutral 51 in November from 46 two months
earlier, largely the result of an increasing number of members
who said their outlook was "unchanged" and a decline among
members who previously deemed themselves "pessimistic,"
according to David Andrea, the trade groups senior vice
president for industry analysis and economics.
The North American market
continues to be viewed as more stable with growth
opportunities, while the European economy remains a concern,
survey results indicate.
Asked how the European economic
crisis had affected North American business planning and
investment strategies, most global companies indicated some
level of concern, ranging from cautious monitoring of the
market to a more deliberate response of limiting
Some companies North
American operations arent affected, while others view the
European crisis as an opportunity to grow their business in
There is "more investment in the
U.S. due to relocation of business from Europe," one survey
respondent said. Several others discussed greater
"localization" of material and component sourcing within North
America not only for the Big Three domestic automakers but also
for Japanese and German transplants.
"Most believe Europes
recovery is a long-term endeavor," Andrea said. "Increasing
investments in North America is still a predominant strategy in
the areas of plant and equipment, product development, and
talent and training, with the majority of respondent companies
planning some level of increase."
The survey showed that Europe
will see declining investments over the next five years, South
American investment will decline at a slower pace than Europe,
and North America and Asia/Pacific likely will have stable to
increasing capital expenditures.
North American localization of
manufacturing and supply chain pull continues to rise, driven
by sourcing strategy, best-cost country sourcing, logistics and
foreign currency exchange risk, according to the survey.