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NINETY EIGHT REGENCY

SUPPLIER CAPACITY COULD CAP GROWTH IN 2011

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SUPPLIER CAPACITY COULD CAP GROWTH IN 2011

By Drew Johnson

The United States auto industry may be poised for a rebound in 2011, but decreased supplier capacity could put a hamper on total growth. Suppliers greatly reduced capacity during the recession of 2008-09, which could impact production in 2011.

“It’s tragic. They survived the crisis, and now that food is available, they can’t manage it,” Martin Schueble, BMW’s North American vice president of procurement, said of some U.S. suppliers. “But it’s only a very, very few companies that are struggling.”

Schueble added that tight credit markets are still limiting the expansion of some suppliers. “These suppliers know what they have to do, but they can’t do it because they can’t get the money,” he said.

It remains to be seen how much the supplier issue could impact sales, but Nissan was forced to stop production of some truck and SUV models after a semiconductor supplier simply couldn’t keep up with increased demand.

The U.S. auto market is expected to total about 12.7 million vehicles next year – up from an expected 11.7 million this year – but some estimates have pegged next year’s output at over 13 million units.

link:

http://www.leftlanenews.com/supplier-capacity-could-cap-growth-in-2011.html

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