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Auto forecast strong, truck outlook uncertain

Keywords: Tags  Auto suppliers, light vehicles, heavy-duty trucks, Dana, Visteon, Cummins, Johnson Controls, TRW Automotive Holdings Chrysler Group

CHICAGO — Light vehicle sales and production in North America are expected to remain strong through the rest of this year, but the recovery of heavy-duty truck build rates from a sharp decline in the second half of 2012 is moving slowly, Tier 1 auto suppliers said.

"In North America, our guidance now assumes a 5-percent increase in year-over-year (light vehicle) production. That’s up over 1 point from our prior estimate," Delphi Automotive LLP chief financial officer Kevin P. Clark said during the Troy, Mich.-based company’s recent earnings conference call. "Commercial vehicle (production) was down significantly, but we are forecasting an improvement in the second half."

Detroit-based American Axle & Manufacturing Inc. is bullish based on its support of General Motors Co.’s next-generation full-size truck and sport utility vehicles, for which it has begun shipping components, president and chief executive officer David C. Dauch said, adding that his company also is helping Chrysler Group LLC’s launch of the new heavy-duty series Ram pickups.

"Market timing for these critical GM and Chrysler launches has been outstanding," Dauch said. "The full-size pickup truck market is red-hot."

Citing an estimated full-year industry production volume of 16.1 million vehicles in North America, Livonia, Mich.-based TRW Automotive Holdings Corp. chairman, president and chief executive officer John C. Plant said the forecast, up 5 percent from 2012, is spurred "by strong consumer demand and new product introductions."

Maumee, Ohio-based Dana Holding Corp. lowered its heavy-duty truck production guidance down slightly. "There is still a degree of uncertainty in the Class 8 market," president and chief executive officer Roger J. Wood said during the company’s earnings conference call.

Tenneco Inc. chairman and chief executive officer Gregg Sherrill agreed. "The global commercial vehicle market remains relatively weak. Inventory corrections are expected to impact production levels," he said.

Lake Forest, Ill.-based Tenneco is supplying a mix of light vehicle platforms and new programs, while maintaining its footprint in the fastest-growing markets, Sherrill said.

Milwaukee-based Johnson Controls Inc., which makes climate control products and batteries, said the automotive production environment for the remainder of the year is positive.

Columbus, Ind.-based Cummins Inc. adjusted its U.S. build rate forecast for heavy-duty trucks to 229,000 vehicles from a previous guidance of 233,000. However, chairman and chief executive officer N. Thomas Linebarger said Cummins expects to grow its share of the market.

"We reduced our Nafta (North American Free Trade Agreement) heavy-duty truck production estimate for 2013 down from 270,000 units to 260,000 units," Eaton Corp. chairman and chief executive officer Alexander Cutler said. "If you go outside the U.S., it’s a little stronger."

Product launches and a healthy order book are helping Van Buren Township, Mich.-based Visteon Corp. expand its light vehicle business base this half and beyond, president and chief executive officer Timothy D. Leuliette recently told investors.

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