Automotive Prospects

Jan 29, 2013

A banner year for Kentucky’s automotive industry could carry over into 20-13.  For the first time since 2007, production inside the Commonwealth topped one million vehicles.  Recent renovations at the Louisville Assembly Plant have made it one of Ford’s most flexible, high volume plants.  Scott Ellis with the University of Kentucky’s Gatton College of Business and Economics says such flexibility translates easily into profits.

“It enables the manufacturer to likely produce at a lower fixed cost which, in turn, suggests that the facility might be able to run profitably at lower fixed costs,” said Ellis.

Scott Ellis says consumer demand remains strong.

“As cars get older, as people have held on to cars through difficult economic times, hopeful that there’s a refresh that happens over the next several years as people update from their older models to newer models,” added Ellis.

Toyota this week regained its position as the world’s number one car manufacturer.   Despite product recalls and the Japanese tsunami, Ellis says Toyota continues its –quote- ‘unrelenting focus on customer needs.’

“Their systems, which are based on sound philosophies, allow them to recover quite quickly.  To me, it’s not surprising,” said Ellis.

In Kentucky alone, the auto industry employs nearly 75 thousand people.