Strattec Security Corporation anticipates that light vehicle production in North America in 2024 will be relatively stable with modest growth potential.
Strattec Security designs, develops, manufactures and markets automotive access control products, including mechanical locks and keys, electronically enhanced locks and keys, and passive start and passive entry systems, among other products, for automotive customers primarily in North America.
June 2023 projections from its third-party forecasting service, S&P Global, indicate that light vehicle production in North America will show increased demand in the coming years.
Preliminary 2023 model year vehicle manufacturing in North America was 15.1 million.
By model year, according to these projections, vehicle manufacturing in 2024 is expected to be 15.2 million vehicles, 16.1 million vehicles by 2025 and 16.6 million vehicles by 2026 and 2027.
North American vehicle manufacturing for Ford, General Motors and Stellantis reflects relative stability, ranging between 6.7 million and 7.1 million vehicles each model year from 2024 through 2027 without much fluctuation between each customer.
Vehicle production
Of course, all of these forecasts are subject to variability based on what happens in the global and North American economies in general, current employment levels, the availability of consumer credit, fluctuating fuel prices, among other factors.
Similarly, Strattec Security projects modest net sales growth based on a stable industry and the launch of several new programs in the model year.
From a cost of sales perspective, the company anticipates that some key challenges from fiscal 2023 will continue into fiscal 2024, in particular a strong Mexican peso relative to the U.S. dollar, the risk of another round of minimum wage increases mandated by the Mexican government in January 2024 affecting the cost of its Mexican operations, and higher costs of materials purchased from its suppliers.
In terms of positive cost trends, it anticipates a continued recovery in the cost of some key raw materials, a trend that began in the second half of fiscal 2023.