Harbour Results, Inc. Predicts 2020 North American Automotive Vendor Tooling Spend to Decrease to $6.8 Billion

Drop in spending directly related to changing automotive marketplace and reduced vehicle launches from the Detroit Three Automakers.


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Harbour Results, Inc. (HRI), a leading authority to the manufacturing industry, recently released the results of the Harbour IQ in-depth study on the current state of the automotive vendor tooling industry. The analysis predicts that 2020 automotive vendor tooling spend in North America will drop to $6.8 billion from an estimated $8.7 billion in 2019.

The key factor driving reducing tooling spend is the decreased number of North American vehicles that will be sourced for production in 2020 – 45 total vehicles. Furthermore, the Detroit Three automakers, who source most of their tools in this region, are forecasted to source only 13 vehicles in 2020 representing approximately $3.1 billion in tooling spend. Further, Harbour IQ estimates North American tooling spend in 2021 to be $7.3 billion.

“This year – 2019 – was a culmination of significant change and instability in the automotive marketplace. From unique mobility models and new automakers to advancing electrification and autonomous technologies to uncertainty in the economy and global trade landscape, the only thing we are certain of is that the industry will continue to change at a rapid rate. This is impacting automaker profitability, which means platforms will be commonized, trim models will be eliminated, and OEMs will be leveraging reductive design to save money.” said Laurie Harbour, HRI president and CEO. “These factors are significantly impacting the health of the North American tool and die industry and resulting in reduced tooling spend.”

HRI predicts that the automotive tooling spend in the region will drop from an annual average of $8-10 billion to $6.5-8 billion for the next 3 to 5 years. Additionally, as a result of reduced tooling spend and economic instability, HRI forecasts up to 75 mold and die shops in the region will close during that same time frame.

“This forecast is difficult for us to share. We are passionate about helping the NA manufacturing industry remain competitive. However, the ongoing marketplace change and competition from low-cost countries – specifically China – has already impacted tool and die makers. In 2019 we saw at least 10 shops close and more than 2,000 workers laid off and we see this trend continuing,” said Harbour.

“As the tooling market contracts, it is important that shops position themselves for the future. Leadership needs to push for edginess and eliminate complacency and it also is important that tool shops continue to put plans in place to shore up weaknesses, maximize technology and talent, and control costs.”