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Overview of the Automotive Tooling Market

Recent analysis from Wipfli suggests that the automotive tooling market is poised for a notable rebound, with projected expenditures rising to $5.6 billion in 2026. This is a significant increase from an estimated $4.3 billion in 2025. A primary factor driving this uptick is the launch of all-new truck models from major automakers such as Ford, General Motors, and Stellantis.

However, while the immediate outlook appears promising, the long-term view indicates that the automotive tooling industry may have reached a plateau. Wipfli's forecasts hint that spending on tooling may peak at around $6.2 billion by 2035, marking a stark contrast to the more robust levels experienced in the mid-2010s.

Industry Challenges

According to Laurie Harbour, a partner at Wipfli, the North American automotive sector is currently grappling with a myriad of challenges. These include:

• - Cost Pressures: Rising operational expenses impacting profitability.
• - Tariff and Trade Uncertainty: Regulatory changes affecting import/export activities.
• - Supply Chain Issues: Disruptions leading to unexpected production delays.
• - Labor Problems: Workforce shortages complicating production capacity and cost efficiencies.
• - Vehicle Affordability: Growing concerns regarding the pricing of vehicles for consumers.

Such pressures necessitate strategic decisions by automakers to drive costs down in vehicle development. This translates to fewer trim levels and reduced complexity, ultimately leading to a decrease in the quantity of tools required across the industry.

Shifts in Product Development Focus

The automotive landscape has been evolving, particularly since 2020, when the focus shifted from internal combustion engines (ICE) to battery electric vehicles (BEV). This transition has fallen short of expectations, resulting in fewer new vehicle launches. As demand for EVs fluctuates and broader economic concerns increase, many automakers have postponed BEV product releases, resulting in an estimated $3.4 billion in BEV-related tooling expenditures being removed from their plans. Additionally, around $1.3 billion in tooling expenses for BEVs has been pushed back to 2026 and beyond, further exacerbating volatility in the tooling sector.

Decision-Making Ahead

Harbour highlights that the path ahead is fraught with complex decisions for automakers concerning product mix and manufacturing strategies. The timing of vehicle launches will likely continue to be adjusted as companies react to market dynamics, leading to both additions and removals in their production schedules.

In a recent manufacturing pulse study conducted by Wipfli, 40% of manufacturers expressed optimism about the future, a slight increase from the previous year. Nevertheless, the industry is facing major concerns, including the high cost of doing business, raw material tariffs, and sustained inflationary pressures. Presently, tooling capacity is running at 66%, with expectations that it will close the year at 71% utilization.

Focus on Adaptability

As the manufacturing industry navigates these headwinds, Harbour underscores the need for tooling and production suppliers to emphasize adaptability and operational efficiency. Those who can identify opportunities and align their strategies to capitalize on them will likely emerge as leaders in the next cycle.

Wipfli's automotive tooling forecast provides vital insights for automotive OEM sourcing activities and program changes, offering crucial data for mold builders, die makers, and automation suppliers preparing for the anticipated demand in the market.

For more detailed insights into Wipfli's analysis and projections concerning the manufacturing industry, please visit wipfli.com/manufacturing.

About Wipfli

Wipfli is a renowned national advisory and accounting firm with nearly a century of experience serving ambitious mid-market organizations. We comprehend the unique challenges faced by our clients and strive to help them achieve success through a comprehensive range of services: assurance, tax, advisory, outsourcing, and technology. With over 3,000 associates and global partnerships, we merge national capabilities with local relationships. Learn more about us at wipfli.com or reach out to Alicia O'Connell at [email protected].