Survey suggests auto parts shortages loom in 2014

There would be reason to be happy if North American auto industry production exceeds 16-million vehicles in 2014, but if it does, a new survey of suppliers by IRN, Inc. concludes that automakers can expect spot shortages of parts, Automotive News reports. Electronics suppliers and chassis and suspension suppliers would have the most trouble keeping up with parts demand.

Out of the 100 suppliers surveyed in August and September, 26 percent said they had "difficulty meeting production expectations" in 2013. If the North American industry passes the 16-million mark, 28 percent of suppliers said they won't have enough capacity to meet expectations. That number rises to 38 percent for electronics suppliers and 30 percent for chassis and suspension suppliers.

"This suggests that the industry is maxed out. Among most suppliers, there is a fair amount of scrambling going on. It's not always pretty," says IRN Vice President Melissa Anderson.

The survey found Chrysler Group particularly vulnerable to supply woes. Forty-two percent of Chrysler suppliers said they had trouble meeting production expectations in 2013, though reportedly only 15 percent of the suppliers surveyed sell to Chrysler. But Chrysler seems to be a few steps ahead of the game, and has offered almost 65 percent of its suppliers new long-term contracts, compared to 55 percent industrywide.

Anderson says, "It's a good sign of the automakers' willingness to think long term. It's a sign of optimism about the future. Earlier, nobody wanted to lock anything in," which is what leads to bidding wars for the lowest possible price.

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