7/20/2009
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2009 Machine Shop Market Profile - Part Two
As we discussed in Part 1 of the Machine Shop Market Profile, engine builders continue to make adjustments they need to in order to participate in these exciting times. Some of those changes have been very difficult, for builders, suppliers and customers alike. Yet we continue to have the belief that many of the shops in business today have made or understand that they will soon need to make changes to remain viable in this tough market.
By Doug Kaufman
Our story so far:
• GM declares bankruptcy.
• Chrysler emerges FROM bankruptcy.
• Congress passes the Consumer Assist & Save Act of 2009 (Also known as H.R. 2346. Also known as “Cash for Clunkers”).
• GM emerges from bankruptcy.
• Ford pledges millions to help auto parts supplier Visteon emerge from ITS bankruptcy.
Just another month in the automotive industry, eh? Since we published Part 1 of the Machine Shop Market Profile back in June (Engine Builder, June 2009, page 28), there has been excitement on all fronts of this business. Unfortunately, “exciting” doesn’t necessarily mean “positive,” as the Chinese curse “May you live in exciting times,” ominously declares.
Of course, for the past 20 years, machine shops and engine builders have been dealing with exciting times. As engine technology has improved over the years, your business has likely been affected. But as we declared last month, opportunity still exists in this business because people need (and love) their cars and trucks and there’s really no better answer.
As we discussed in Part 1 of the Machine Shop Market Profile, engine builders continue to make adjustments they need to in order to participate in these exciting times. Some of those changes have been very difficult, for builders, suppliers and customers alike. Yet we continue to have the belief that many of the shops in business today have made or understand that they will soon need to make changes to remain viable in this tough market. There’s just no way to remain competitive in tomorrow’s industry using yesterday’s business model.
Part I of our annual Machine Shop Market Profile, presented information concerning all types of production data, looking at average monthly engine, head and crankshaft production, core sourcing, analysis of shop equipment ownership, previous equipment purchases and future buying intentions, as well as the percentage of production time spent in specific areas of engine disassembly, cleaning, machining and reassembly.
In this issue, we’re taking a look, at financial data, size of shop, years in business, employee information and customer-base analysis of the typical custom engine rebuilder (CER).
As we stated last month, we feel the numbers generated by the 2009 Machine Shop Market Profile are as pristine and reliable as possible. For more than 20 years, we have been surveying this same segment of the engine rebuilding population. Consequently, data contained in this study reflects the most accurate trending information available to CERs and their suppliers.
Information contained in our study represents data for production year 2008. Engine Builder audited circulation figures show a total of 17,859 engine builder/rebuilder/ remanufacturer locations. In our estimation, just under a third of these – or about 5,500 – are full-service automotive machine shops and engine builders capable of doing any type of machine work. The rest may be rebuilders with limited shop equipment, buying and installing parts, doing the machine work they can while jobbing out other service operations that they can’t easily perform.
To download the complete MSMP Part Two, click here for the PDF.