Most people complain about automobile factories outsourcing jobs to foreign countries, but the state of Alabama has enjoyed a growth in the industry. Automobile production in that state has risen by 14 percent through the first five months of 2012. Industry is continuing to build on recovery that began in 2010. Cars made in Alabama continue to climb up in the sales charts. While news might look bleak across the industry, this is a good reason to put a little more faith in the market.

Talladega County is host to a major Honda assembly plant. That particular facility is responsible for much of the industry’s local growth. Honda suffered a major setback last year because of the tsunami in March 2011. Facilities around the world were forced to scale back their operations. Part shortages were the order of the day. However, the plant is running wide open for the time being.

Pilot SUV product grew by 28.4 percent, but this pales in comparison to the 44 percent growth that production of the Odyssey minivan has seen. The most shocking gains at the Alabama facility came from a niche vehicle. Production of the Ridgeline pickup has grown by 52.6 percent. Increased sales of these vehicles would help to protect the future of this vital American plant.

Plant officials in Lincoln said that it produces more than 1,300 motor vehicles a day. By 2013, the plant could churn out close to 1,500 a day. This news comes after Honda announced a 47.6 percent increase in US sales. Domestic drivers may very well want cars made in the USA.

There is a Mercedes-Benz factory in Tuscaloosa County, though it has suffered through some mixed production figures. While production of the GL-Class SUV is up, the R-Class crossover has fallen considerably. Likewise, Hyundai’s factory in Montgomery has seen mixed results. Nevertheless, production of the Sonata has seen some gains. Employees at the Hyundai facility have actually been working overtime for two years to keep pace with increased demand for the Elantra and Sonata.

Growth across the United States is around 25 percent. Canadian motor vehicle factories saw a 14 percent jump. These numbers are promising for many automakers, especially considering previous slumps in the industry. Even Mexican factories have been seeing increased figures. North American production volume for the rest of 2012 is expected to be rather robust. This is especially true if sales keep up.

World events that shake a country often send rippling effects through economies around the world. The unexpected war in Libya and earthquake in Japan are both having a negative effect on automakers around the world.

Libya is a major producer and provider of the world’s oil with its reservoirs in the eastern portion of the country. The conflict that erupted between rebel and government forces essentially shut down much of their oil production. Prices of oil have risen as a direct consequence.

One in five microprocessors is made in Japan. That is not great news when considering the vast number of places a microprocessor is used in today’s automobile. GPS, diagnostic computer, fuel mix, and more; all make use of microprocessors. Analysts cite concerns over the effect of the hit in production of small plastic and rubber parts. Some manufacturers are reporting discontinuation of certain paint pigments that are now in tumultuous supply.

The infrastructure of Japan took such a sharp hit, that even now it is difficult for production to get back on track. Aftershocks and power losses make it impossible to resume normal production activity.

United States auto manufacturers have all put together emergency teams to figure out alternate ways to navigate this difficult time. Many are trying to avoid plant closures by taking the first step of cutting back scheduled overtime. Some manufacturers have already been forced to close plants. This comes at a time when the auto industry was beginning to make a rebound.

The effect these circumstances will have will be varied. Automakers are expected to start running out of their surplus inventories within 8 weeks. Many have begun to shift production to vehicles that do not require a lot of electronic subcomponents. Vehicles with higher profit margins are being given priority for available parts. The automobiles that do will see rising prices in the long run as demand tightens for sought after parts.

Weathering the storms of the world economy is something the automaker industry has done several times. The recent events in Japan and Libya really set the bar high for manufacturers while trying to handle the effects of these disasters. Even now they are working to find alternate suppliers and solutions to these problems.

Regardless of how one looks at any of this situation, a common economic principal will come into play. Less supply means higher demand and higher prices. If you are considering buying an automobile, prices are going to be increasing as the world feels the effects of these events and mourns the tragic losses.

With everything happening in the auto making industry, experts say that higher fuel economy has been overlooked by many. University of Michigan researchers have concluded in a recent report that increasing auto efficiency 30 to 50 percent could have yields as high as 3 billion dollars gross profit annually.
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