Shifting dynamics in the industry are changing how capital investments are being made and measured as decision makers push for more sustainability.
The details: A new report by Global Location Strategies finds the auto industry is making fewer investments overall, but greenlighting bigger projects, Forbes reports.
Projects of $1 billion or more now account for 43% of all capital spending, up from 18% a decade ago.
The average capital project rose 24% on an inflation-adjusted basis between 2015 and 2024, the report says.
Bigger investments are being shaped by power availability, workforce delivery, permitting certainty, infrastructure scalability, and institutional coordination.
What they’re saying: Industry “capital deployment has remained resilient and increasingly concentrated in a limited number of high-stakes investments that now determine production capacity, supply-chain alignment, and long-term competitive position,” according to the report, per Forbes.
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Why it matters: Where OEMs place big money today influences tomorrow’s allocation strength, model mix, and pricing power. More capital flowing to retooling and next-gen platforms can mean faster product cadence, shifting trim availability, and uneven inventory positioning by brand and region.
Between the lines: The recalibration of capital is increasingly being directed toward next-generation platforms, including battery-electric vehicles (BEVs), hybrid systems, advanced battery manufacturing, and large-scale retooling of existing internal-combustion-engine plants, according to Global Location Strategies.
In September, Volvo Cars, which had already invested $1.3 billion in a South Carolina plant, announced it will invest more to add a hybrid model.
Toyota is investing $912 million to boost its multi-vehicle production strategy across plants in West Virginia, Kentucky, Mississippi, Tennessee and Missouri as part of its $10 billion commitment to the U.S. over the next five years.
Stellantis announced in October that it will invest $13 billion in the U.S. to expand production by 50% with five new vehicle launches and 19 product actions over the next four years.
Bottom line: Fewer, larger bets raise the stakes for which brands win on capacity and product flow. Dealers should watch where investment is landing, plan for faster mix shifts toward hybrids and retooled ICE, and align ordering and marketing to the plants and platforms most likely to deliver consistent supply.
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