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Market Report: Automotive Sector Prepares for Sales Uptick

After experiencing major bumps in the past few years, the automotive industry is retooling for a brighter future.

March 2011
The all-electric Nissan LEAF will be assembled in Smyrna, Tennessee.
The all-electric Nissan LEAF will be assembled in Smyrna, Tennessee.
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Some Opportunities
Meanwhile, other manufacturers are shuffling the deck as demand shifts become clearer, and that already has spelled opportunities on the manufacturing side. Kia has been building up its operations in West Point, Georgia, for example, and there has been speculation that General Motors could at some point bring assembly back to its idled lines in Spring Hill, Tennessee.

Nissan already has sent good news Tennessee's way, announcing that it plans to move production of its Rogue crossover SUV from Japan to its plant in Smyrna within a couple of years. Smyrna also is where Nissan plans to assemble its LEAF all-electric vehicle starting next year, and it's working now on a facility there to make LEAF's lithium-ion batteries. Ford, which weathered the downturn much better than its American competitors, has said it expects its manufacturing and assembly operations will add as many as 7,000 new jobs in the next couple of years. And Toyota has driven its Tacoma manufacturing to its San Antonio assembly plant.

In the major car-building hub of Ontario, thousands of automotive jobs have been created since 2009, and manufacturing numbers in 2010 were up 43 percent over the previous year. The new year marked the production launch of three new vehicles at Chrysler's Brampton Assembly Plant. Chrysler last year pumped millions of dollars into its Etobicoke casting plant as well. In Alliston, Honda is boosting production, adding a second shift and hiring 400 people. And General Motors, fresh from its restructuring, has recalled all of its laid-off workers in Oshawa and Ingersoll and created 700 new jobs, adding a total of 2,000 to the payroll.

Alternative-Energy and Other Vehicles
There's growing activity on the new frontier of alternative-energy vehicles, with the activity often involving small operations and unfamiliar companies. In Elkhart, Indiana, for example, automaker THINK has pumped $55 million into a facility that once housed an RV supplier, and last fall began assembling electric vehicles from parts brought in from overseas. It's still a small operation, making a couple of dozen vehicles a day and employing about that many people. But it's ramping up toward full production later this year, and the company hopes to eventually have 400 people on the payroll.

An automotive company to watch, according to Fortune magazine, is Indiana-based Carbon Motors. The company hopes to take advantage of the sunset of the Crown Victoria as a popular police vehicle, and is creating its own line of cruiser that it claims is America's first "purpose-built" police car. Production on the site of an old Ford air-conditioner plant is still a couple of years away, but the company claims more than 16,000 of its E7 cop cars have already been reserved.

All in all, there are lots of reasons to feel positive about the automotive business, says Hill of the Center for Automotive Research. "Given all the bad news, we were at the bottom of the trough not that long ago," he says. Many people deferred vehicle purchases during the past few years and are getting increasingly tired of driving around clunkers. "It seems now like everything is positive," Hill says.

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