North American automotive is ‘pedal to the metal’…again


Houston, TX —According to Industrial Information Resources (IIR), the bad news out of Detroit in recent months has obscured positive early indicators on the capital and maintenance outlays. Investment seems to be on the rise for this year as it was in 2005. Last year at this time the automobile industry’s expected spending was diffident according to IIR’s analysis, some $4.8 billion versus 2004’s level of $4.7 billion.

The shock came in evaluating actual 2005 expenditures, the industry plunked down $9.6 billion, flowing to the: U.S., 65%; Canada, 31%; and Mexico, 4%. The top five regions for investment were: Ontario, Canada ($3 billion); Michigan ($1.88 billion); Ohio ($0.60 billion); Illinois ($0.56 billion); and Indiana (0.56 billion).

Going into 2006 IIR is following 259 capital and maintenance projects valued at over $6.3 billion, a 131% rise over 2005’s initial spending estimate of $4.8 billion.

For 2006 the most notable shift is geographic, with $2.5 billion going to the U.S., $2.4 billion to Mexico, and $1.4 billion to Canada. For 2006 the top regional rankings are: Coahuila (Mexico), $1.50 billion; Ontario (Canada), $1.30 billion; Nuevo Leon (Mexico), $0.80 billion; Mississippi, $0.66 billion); and Tennessee, $0.49 billion.

Richard Phelps , senior editor, Control Engineering

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