Readjusting to the New Normal of Automotive Tooling
“Control what you can control,” Laurie Harbour of Harbour Results says because on top of our current economic uncertainty, government volatility, tariffs and trade there also is a shift happening in the automotive industry that demands flexibility from today’s mold builders.
The shift in the process of manufacturing cars and the type of cars we are making is not going to happen overnight, but it is happening. This shift is towards electrified and autonomous vehicles, and the impact on mold manufacturers is already being seen, which is why controlling what you can, being flexible and managing your business is essential.
According to Laurie Harbour, president of Harbour Results, this shift is a call to action for mold builders to right-size their businesses to the new normal of automotive tooling demand. With every shift comes the good, the bad and the ugly. For data from the latest Harbour IQ in-depth study on the current state of the automotive vendor tooling industry and the future of tooling in North America, click here.
Harbour’s forecasted automotive tooling spend is between $6.5-8 billion as automotive OEMs restructure to cut costs, due to increased product complexity, and the move from sedans to trucks and SUVs as well as electrified and autonomous vehicles.
OEMs are working on designing common platforms and common parts that will reduce the number of required molds, tools and dies; cutting trim models and implementing reductive design (that reduces unnecessary design elements such as climate-control knobs and buttons that are controlled by flat screens).
However, I want to be sure to highlight a couple opportunities for mold builders that Harbour mentioned during its recent webinar, namely:
- The number of automotive OEMs that build vehicles in North America will continue to increase and hit 23 in 2026 with plants, sourcing tooling and building vehicles. This is available tooling to the North American tool supply base. This is a good story for mold builders if they work to capture these new OEMs and diversify themselves into these new markets.
- Product complexity in the market will increase with dropping volumes, however, tools and molds are still needed regardless of volumes.
- The increase in Battery Electric Vehicles (BEV) nameplates is projected to increase from 18 in 2017 to 133 by 2026, and all of these vehicles need molds, tools and components.
Mold builders can and should use technology, a sales strategy and a hiring plan to remain flexible and competitive despite the challenges in this marketplace.