Study predicts record-breaking automotive vendor tooling spending in 2018

Southfield, Mich.-based Harbour Results Inc. has released the results of its study on the current state of the automotive vendor tooling industry. The analysis predicts 2018 automotive vendor tooling spending in North America will reach a record high of $11 billion.

The key factor driving increased tooling spending is the high level of North American vehicle launches—177—predicted between 2018 and 2020. Additionally, 66 percent of these launches are SUVs and truck platforms, which require more tooling to manufacture than a car platform.

“In 2017 we are estimating tooling spend to be about $9 billion, which has resulted in high-capacity utilization among tool shops: 88 percent for die shops and 81 percent for mold shops,” said Laurie Harbour, HRI president/CEO. “This created a new tooling model of outsourcing. In fact, $1 billion to $1.5 billion of tooling was outsourced this year to help manage the growing demand. We can only expect this trend to grow in 2018.”

However, HRI projects a drop of 40 percent in tooling spending from the high of $11 billion in 2018 to about $6.7 billion in 2020.

“Our team looked at a number of factors and issues impacting the automotive industry in addition to vehicle launches—including the elimination of vehicle models, new foreign-owned plants and products, OEM profitability, political and economic climate, and the changing consumer landscape—and we developed an automotive vendor tooling spend forecast of $50 billion from 2016-2021 with 2020 being the lowest spend year during that time.

“Although the predicted dip in 2020 is not nearly as significant as we experienced in the recession, it is important that tool shops continue to focus on improving operations and investing in technology during the good times to remain competitive during the dip,” said Harbour.