OESA Sees Sunny Skies for Auto Industry

14 April 2014 Dashboard Insights Blog

The Original Equipment Suppliers Association (OESA) recently released its 2013 Annual Report which includes an interesting and positive “State of the Industry.” Modest growth is projected for both 2014 and 2015, pushing expected annual North American Production levels over 17 million units. This is especially positive because OESA also notes that the “break-even point of the supply base is 12.7 million units.” Thus, the supply chain in North America should continue to be profitable and positive, even if it were to contract 25%.

OESA also noted that its Automotive Supplier Sentiment Index has been positive and maintaining favorable momentum from 2013 into the first quarter of 2014. After generally increasing throughout 2013, the Index eased down slightly heading into 2014. However, it is still positive. OESA sees it staying that way “[w]ith a sustainable North American market and a stabilizing European market, supplier sentiment is likely to remain in positive territory.”

Short-term Challenges for Suppliers

Not all was perfect in OESA’s State of the Industry. Some short-term challenges were identified for suppliers. The three issues identified were:

  • Human resource talent shortages for skilled labor and technical skills
  • Manufacturing constraints within their own plants and sub-tier suppliers
  • Cost pressures associated with incremental production requirements and product launches

Suppliers that are able to best navigate these challenges will put themselves in position to best take advantage of strong demand to grow their businesses and position themselves for long-term growth.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services