CHICAGO Although a
recessionary climate in Europe will offset expected overall
gains in the automotive sector this year, Tier I suppliers to
the industry are relocating some capacity to meet growth
opportunities in other regions, with North America continuing
to be a bright spot for automotive demand.
Magna International Inc.
recently projected 2013 North American light vehicle production
at 15.8 million units, up from its January estimate of 15.3
"The vast majority of the
increased volume comes from Asian-based (original equipment
manufacturers)," Magna investor relations vice president Louis
Tonelli said during an earnings conference call.
Aurora, Ontario-based Magna,
which revised its projection for western European light vehicle
production downward by 100,000 vehicles to 11.9 million, is
restructuring its European operations over the next two
"We will have some plant
consolidations. (This) depends on the amount of business
were winning, but also, if customers are closing plants,
we have to react to it," Magna chief executive officer Donald
J. Walker said. "We have been working on moving our footprint,
either by building new facilities or shifting production to
Delphi Automotive Plc president
and chief executive officer Rodney ONeal echoed that
"We have implemented several
restructuring initiatives, primarily in Europe, and we continue
to rotate our footprint to lower-cost countries," he said
during the companys earnings conference call. At the same
time, "we continue to invest (in) strategic growth
initiatives," including acquisitions and organic growth in
China. "We are on track to double the size of our China
business over the next four to five years."
Asia accounted for 34 percent of
Troy, Mich.-based Delphis new business bookings in 2012.
Still, Europe remains a meaningful market for Delphi, and every
1-percent reduction in industry volume there equates to a
decline of about $60 million in revenue. ONeal expects
European auto production to be down 4 percent in 2013.
"Its clear (Europe) will
be a prolonged weak industry environment as the entire region
works through recessionary economic conditions," Tenneco Inc.
chief operating officer Hari N. Nair told investors recently.
"We continue to take actions that adapt our footprint and cost
structure to align with this environment." The goal is to align
operations "with what we expect future markets will demand
based on customers plans, industry forecasts and
expectations for economic recovery."
Meanwhile, Lake Forest,
Ill.-based Tenneco has leveraged higher volumes with its
position on strong selling platforms in North America,
especially with Ford Motor Co., General Motors Co. and
Volkswagen AG, and is ramping up programs at its new plants in
the Asia-Pacific region.
Maumee, Ohio-based Dana Holding
Corp. uses its diversification to manage hot and cold
"Our regional sales mix
continues to be balanced, with an expected shift in sales from
South America to North America and from heavy vehicle to light
vehicle," president and chief executive officer Roger J. Wood
said. "There are a lot of underlying dynamics going on in
almost every region of the world. In North America, the light
vehicle market overall will continue to be strong in 2013."