Carmakers are investing to hike output as demand goes up

Article by Anita Panait, on August 10, 2013

Carmakers in the United States have announced plans to invest a total of $434 million to increase their capacity to produce vehicles and engines, in response to growing sales in the country. Chrysler Group LLC has disclosed will increase capacity and add nearly at an engine site in Michigan. Ford Motor Co., meanwhile, has said it is seeking to produce more vehicles from each of its plants in North America.

On the other hand, Japanese carmaker Honda Motor Co. has announced in a statement that will make a $215-million investment in Ohio, including around $180 million at an engine site. Carmakers are looking to hike output as vehicle sales gain traction. According to the Automotive News Data Center, car and light-truck deliveries in the US surged 14 percent in July to 1.3 million units, with the annualized industry sales rate was 15.8 million units. Strong results in July keep the US on pace to post its best ever year since 2007, when around 16.1 million vehicles were.

Jim Tetreault, Ford's vice president of North American manufacturing, remarked on the sidelines of the 2013 CAR Management Briefing Seminars that they still looking at how they could “get more out of every plant,” adding that will be the carmaker’s focus as strong as demand “is as strong as it is." Tetreault said that Ford may add more capacity for "some products."

Ford’s new Fusion sedan has been very popular, resulting to low inventories. To address this, Ford is adding a second shift of 1,200 workers at its Flat Rock assembly plant in Michigan to commence producing Fusions later this year. Tetreault remarked that if Ford’s sales and marketing demand for more Fusions, they might add a third shift at the Flat Rock site. [source: automotive news - sub. required]

Topics: production

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