AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


Auto suppliers remain moderately bullish

Keywords: Tags  automotive suppliers, sentiment index, Original Equiipment Suppliers, OESA, survey, market sentiment, Dave Andrea, expenditures budget priorities


CHICAGO — Automotive suppliers’ confidence dipped slightly in July compared with May, according to the latest survey of members of the Original Equipment Suppliers Association (OESA). The index dropped to 60 from 62 two months earlier.

Some of those surveyed indicated growth may be stymied by an inability to hire qualified personnel fast enough to keep up with new orders and new program launches.

Top budgetary priorities are purchasing capital equipment and hiring direct hourly-salary and temporary-contract employees. Footprint expansion is not considered a key action. As one survey respondent noted: "We already have the footprint, now we need people."

Sixty-three percent of OESA members surveyed plan to boost capital expenditures. Fifty-eight percent of respondents would consider acquiring companies over the next budget cycle, up from 42 percent a year ago.

Objectives prompting those suppliers to consider acquisitions include building market share, accessing new customers or following customers into geographic markets, and accelerating access to new technologies, according to Dave Andrea, OESA’s senior vice president for industry analysis and economics.

Some respondents said they’re seeking strategic opportunities across North America, while others mentioned the southern United States and Mexico. Some respondents looked to add value, while others wanted to enhance their geographical reach to support global vehicle build programs.

Others are more focused on Asia, but still developing their strategies for the region. Still others cited vertical integration as a goal.

As for the sentiment index, companies that expressed optimism cited consistent order rates, positive volume trends, an uptick in project quotation activity and new order entries, noting that capacity "is at a premium." Others said they had "growing confidence in the economy."

One respondent warned, however, that "We are still very conservative and now is not the time to get too bullish anywhere but perhaps China and North America."

The OESA July index of 60 compares with a low of 21 in November 2008 and a high of 73 in January 2010. Any number above 50 indicates a positive sentiment.


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends

AMM Events