North American production capacity will decline over the next four years, and Michigan will lose its title at least temporarily to Ontario, Canada, as the No.1 vehicle-producing state or province in 2004.
Based on actual data through October and Ward's estimates for the final two months of 2004, Ontario will end the year with production of 2.70 million vehicles, compared with Michigan's 2.61 million.
Flagging demand for some of the products built in Michigan is part of the reason for the state's drop to No.2 in 2004, but most of the decline can be traced to model changeovers that created long shutdowns for retooling. However, Michigan still will far outdistance Ohio as the top assembler in the U.S.
Michigan should regain the title at some point, if for no other reason than it has a lot more production capacity than Ontario. Michigan's 2004 capacity of 3.39 million units will fall to 3.27 million by 2008, while Ontario's will remain flat at 2.87 million.
Production leadership will hinge mostly on demand for the products each builds. Next year could be nip and tuck for the top spot even though Michigan should get a boost from retooled plants being in production for a full year.
| 2004 | % Share | 1994 | % Share | |||
|---|---|---|---|---|---|---|
| 1. | Ontario | 2,696,313 | 16.7 | Michigan | 3,433,604 | 21.9 |
| 2. | Michigan | 2,607,497 | 16.1 | Ontario | 2,113,701 | 13.5 |
| 3. | Ohio | 1,814,896 | 11.2 | Ohio | 1,844,201 | 11.8 |
| 4. | Missouri | 1,226,512 | 7.6 | Missouri | 920,094 | 5.9 |
| 5. | Kentucky | 1,170,928 | 7.2 | Kentucky | 800,356 | 5.1 |
| 6. | Indiana | 770,036 | 4.8 | Tennessee | 735,158 | 4.7 |
| 7. | Tennessee | 690,622 | 4.3 | Illinois | 690,421 | 4.4 |
| 8. | Coahuila | 400,148 | 2.5 | Delaware | 451,832 | 2.9 |
| 9. | Illinois | 395,298 | 2.4 | Georgia | 399,614 | 2.5 |
| 10. | Georgia | 387,747 | 2.4 | Indiana | 382,611 | 2.4 |
| Total Top 10 | 12,159,997 | 75.2 | 11,771,592 | 75.1 | ||
| Note: 2004 production based on actual output through October and estimates for November-December. Source: WardsAuto.com | ||||||
| 2004 | 2008 | % Change 2004-08 | Vol. Change 2004-08 | |
|---|---|---|---|---|
| Canada | 2,874,000 | 2,884,000 | 0.3 | 10,000 |
| Mexico | 2,030,550 | 1,870,550 | -7.9 | -160,000 |
| New England | 0 | 0 | 0.0 | 0 |
| Middle Atlantic | 150,400 | 16,900 | -88.8 | -133,500 |
| South Atlantic | 1,582,000 | 1,158,000 | -26.8 | -424,000 |
| East North Central | 7,205,500 | 6,992,700 | -3.0 | -212,800 |
| East South Central | 2,620,000 | 3,085,000 | 17.7 | 465,000 |
| West North Central | 1,580,000 | 1,484,000 | -6.1 | -96,000 |
| West South Central | 577,100 | 763,000 | 32.2 | 185,900 |
| Mountain | 0 | 0 | 0.0 | 0 |
| Pacific | 453,000 | 462,000 | 2.0 | 9,000 |
| TOTAL | 19,072,550 | 18,716,150 | -1.9 | -356,400 |
| Source: WardsAuto.com | ||||
Surprisingly, Mexico is predicted to lose production. Capacity is expected to decline from 2.03 million to 1.87 million over the next four years. The loss is based on Ward's projection that Ford Motor Co. will close its Cuautitlan plant due to overcapacity by 2008, and that there currently are no known products to replace some General Motors Corp. vehicles slated to end production at its Ramos Arizpe plant.
Except for some expansion in Texas, the bulk of North American vehicle production capacity, including new plants, will stay east of the Mississippi River, while more of it moves away from the Eastern Seaboard states.
Overall, North American straight-time capacity is expected to decline between 2004 and 2008 from 19.1 million to 18.7 million units.
Combined production capacity in the East South Central (Alabama, Kentucky, Mississippi and Tennessee) and the neighboring West South Central (Arkansas, Louisiana, Oklahoma and Texas) regions will increase by 651,000 units between 2004 and 2008. Their combined share of capacity will rise to 20.6% from 16.8%.
Increases will come largely from Hyundai Motor Co. Ltd.'s new plant in Montgomery, AL, which is opening early next year. The plant is expected to be at an annual capacity of 300,000 units by 2007 once all its products are in place. Also in Alabama, DaimlerChrysler AG's Mercedes plant in Vance will increase capacity as it adds new products in 2005.
In Mississippi, Nissan Motor Co. Ltd.'s Canton plant, which opened in 2003, will be at full capacity of 500,000 units for the first time in 2005.
The other big boost will come from Toyota Motor Corp. when it opens its new pickup plant in San Antonio, TX, in 2006. Projected annual capacity is 150,000 units.
Not incorporated into Ward's capacity outlook are possible other expansions in the South. Toyota has said it will add a new plant or expand an existing facility if demand for its products in North America continues to rise. That likely would happen either in the southern U.S. or at its operations in Cambridge, Ont.
Furthermore, if demand for the Odyssey and Pilot rises, Honda Motor Co. Ltd. is likely to expand capacity at its plant in Lincoln, AL.
Capacity losses in other regions are due both to closures and no new construction.
In the Northeast, there already is no production in New England, and by 2008, except for a lone plant building Mack trucks in Pennsylvania, there will be no production in the area comprising New York, Pennsylvania and New Jersey.
The South Atlantic — the area from Delaware to Florida — will lose more than 400,000 units of production capacity by 2008, thanks to three closures — Ford's Edison, NJ, plant earlier this year, GM's Baltimore, MD, plant in 2005, and Ward's projection that GM's Linden, NJ, plant will shutter by 2008, plus capacity cutbacks in two other plants in Delaware and Georgia.
Meantime, the East North Central region, although it will remain the dominant producing region, will lose some 212,000 units of capacity over the next four years — the equivalent of one assembly plant. Despite this setback, the region still will have the capability to produce nearly 7 million vehicles annually in 2008.
