Southfield — The likelihood that the U.S. auto industry returns to the days of 17 million in annual sales is largely dependent on increasing production capacity, analysts said Thursday.
Michael Robinet, managing director at IHS Automotive Consulting, and Jeff Schuster, senior vice president of forecasting at LMC Automotive, speaking at the WWJ Auto Summit at Lawrence Tech, said annual consumer demand could soon top 17 million — something that hasn’t happened since 2001 — but that dominoes must fall on the manufacturing side for the production to meet demand.
“It’s healthy and pricing is up,” Schuster said. “There’s a lot of money to be made right now. Arguably this is the sweet spot. (But) there’s no doubt we’ll get back to 17 million.”
But automakers are already running low on some of their most popular products in a year in which sales could reach about 16 million.
Many have or will increase production in an attempt to catch up, though that is difficult, particularly for domestic automakers, because of all the factories they shut during the auto crisis. Some, such as Nissan Motor Co., have shifted the manufacturing of some vehicles to U.S. plants from elsewhere in the world.
That is one of the reasons why 17 million annual sales may be more of a magical number and not necessarily a long-term sales “sweet spot.”
“The sweet spot continues to move because it depends on how much production you’ve got locally,” Robinet said.
And the manufacturing of more vehicles is dependent on how much more production automakers plan to squeeze out of their supply base, which is facing similar constraints.