N. American Auto Suppliers Remain Bullish about 2018 Market

The auto industry’s North American supply base remains optimistic about 2018 in spite of uncertain federal policies on trade and tariffs, according to the Original Equipment Manufacturers Assn.’s Automotive Supplier Barometer.

The barometer’s index for April-June slipped four points from the first quarter but was two points higher than the same period a year ago. OESA attributes the bullish outlook to the region’s strong economic fundamentals and healthy production rates. The association says trade policy remains the industry’s largest threat.

More than half of the executives OESA surveyed plan greater capital investments over the next 12 months. More than 70% anticipate “dramatically” higher spending on product innovation, and the same proportion says leveraging partnerships is helping them reach their objectives faster.

Suppliers say they won’t need to add capacity unless sustainable production levels top 18 million unit, a scenario that auto analysts consider highly unlikely.