New Equipment Makes Auto Companies More Competitive

North American auto industry leaders say the top three benefits of investing in new plant equipment are a higher quality product (26 percent); increased throughput (23 percent); and lower overall operating costs (20 percent). And of those companies that use Italian-made industrial machinery, most say the biggest benefit they derive from it is help in meeting strategic and operational goals.

These findings are from a survey of about 200 engineers and executives at companies within the automotive supply chain. IndustryWeek and the Italian Trade Commission's Machines Italia campaign conducted the survey of subscribers to Ward's Auto World.

{pagebreak}

Praises for Italian-Made Machinery

While only 12 percent of respondents said their companies use Italian-made machinery, respondents in general had good things to say about such machinery:

  • 24 percent said Italian-made machinery is of high quality.
  • 23 percent said Italian machinery producers use the latest technology.
  • 19 percent said Italian machinery is reliable and has minimal downtime.
  • 17 percent said Italian machinery is scalable and comes with good service and support.
  • 15 percent said Italian machinery is competitively priced.

Italian machinery users in the auto supply chain primarily value how the equipment helps them to meet their strategic and operational goals (28 percent). ROI and the exclusivity of certain times of machines to Italy are the other top reasons respondent said their companies purchased Italian machinery.

 

{pagebreak}

 

Capital Investments on The Rise

The comeback in the North American auto sector is apparent in plans to invest in new machinery, according to the survey respondents. Forty-three percent of them said their companies will spend $1 million or more for industrial equipment over the next two years, and 41 percent said their company's most recent equipment purchase happened less than six months ago.

It's likely that most of these companies are or will be buying the equipment from representatives of the manufacturers as 60 percent of respondents identified these as the most reliable source for information about machinery. The remaining choices were distributors' sales reps (11 percent); leasing companies' reps (3 percent); none of these (20 percent); and no reply (5 percent).

 

{pagebreak}

Strategic Improvements

More than half of those surveyed said new equipment improves company performance up to 50 percent; 11 percent said they see improvement of greater than 50 percent.

Performance improvement goes hand-in-hand with the growth strategies of these auto-sector companies. Respondents said these strategies were either "very important" for "extremely important" for their companies in the medium term: becoming a global supplier (42 percent); making high value-added niche products (41 percent); increasing specialization of certain product(s) (36 percent); producing a wide range (35 percent); expanding production into other sectors (35 percent); becoming a certified supplier (35 percent); and establishing new plants (18 percent).