North American Tooling Spend Forecasted to Reach $8.3 Billion in 2025

The automotive vendor tooling spend in North America will increase 13.4%/yr over the next three years, culminating in $8.3 billion in spending in 2025—significantly higher than 2022’s estimated spend of $5.7 billion. Those figures from industry consultant Harbour Results Inc. (HRI; Southfield, Mich.) and its recently released Harbour IQ study on the current state of the automotive vendor tooling industry.

HRI points to several factors fueling the growth in tooling spending. First, despite a drop in North American vehicle demand from 15.8 to 13.7 million units, most automakers are experiencing record profits per vehicle sold, with these additional monies funding investment in technology and new vehicles.

To wit: from 2023-2029 the number of vehicle nameplates in the region will grow 18% from 210 to 249. Additionally, battery electric vehicle nameplates will grow from 20% of the mix in 2023 to 46% of the mix in 2029. “New nameplates generate new vehicle launches, which require more tools,” Harbour notes. In addition, Harbour says the Detroit Three automakers, who purchase most of their tools in this region, are planning to source tooling for all new full-sized pickup trucks and SUVs in 2024/2025 and 2026, which significantly increases the tooling demand. The Harbour IQ study shows that the discrete number of tools will increase with a compound average growth rate of 14% from 2022 to 2025.

There’s a “bright future of the automotive tooling industry,” according to Laurie Harbour, HRI president and CEO, despite major changes in the market around shifts from internal combustion engines (ICE) to battery electric vehicles (BEV). “Although we are seeing growth within the industry, it is important to note that North American tooling spend per vehicle for BEVs on average is lower than ICE vehicles by about 30%, so although we are seeing the tooling spend and number of tools sourced go up over the next few years the average spend per tool is decreasing. So, it will be important for mold and die companies to focus on improved efficiency and throughput.”

HRI’s most recent Manufacturing Pulse Study, conducted in August, found that 45% of tool shops said they were optimistic or very optimistic about the future and predicted ending the year at 83% utilization. The industry’s top concern remains finding talent and the increasing cost of doing business.