This year has been good for the auto business in the North American markets. In fact it’s been more than good; it’s been exceptional, to the point that 2014 total light vehicle sales are set to record their second-highest level ever.
According to estimates from the AutoNews Data Center, full-year production for the United States, Mexico and Canada will reach 17.24 million, an increase of 7 percent compared to last year and just 53,000 units below the 2000 record 17,297,498.
Moreover, 2015 could be even better than 2000 and set a new record. LMC Automotive raised its 2015 light vehicle production forecast by 200,000 units, to 17.4 million, mainly due to low fuel prices and job growth.
The weekly production rates, over the year’s 49 working weeks, averages 352,000 vehicles. In fact, this growth may too big for suppliers: a study by the IRN consulting firm showed that 42 percent of parts makers polled would struggle to keep up with 2015’s demand.
Among the three countries, Mexico has posted the biggest year-to-year increase, by 12 percent, topping 3 million units for the first time ever (3.3 million), while US and Canada production increased by 5 percent each, to 12.7 million and 2,996,289 respectively.
More telling is that, since 1999, Mexico’s production has more than doubled, while US and Canada have fallen by 9 and 17 percent. Lower labor costs are one reason, but analysts also say that logistic costs, overseas-based manufacturers looking to minimize currency exchange fluctuations and the fact that Mexico has also made free-trade agreements with other countries play a big role in this rapid increase.
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