Summary
From the auto industry's perspective, this economic typhoon isn't over until consumers get serious about buying new cars. At that point, the debate can begin about whether the economy has hit rock bottom and whether better times are on the way. Here's what we think will happen at that point.
Analysis
Once the recession ends:
- Four of America's top five auto makers, including Toyota, will lose market share by 2012. Only Honda will beat the trend by slightly growing U.S. share
- GM is the biggest loser among the top seven OEMs, falling from 35.5% of the U.S. market in 1989 to 19.8% in the first six months of 2009. After plant consolidation and aggressive dealer downsizing, GM should settle in at about 16% of the market.
- Toyota and Ford are expected to hold up to about a 16% share through 2012. No automaker is expected to reach 20% of the U.S. market for the next several years. Expect Ford, GM and Toyota to share the sales title from year-to-year.
- Volkswagen will nearly double its current market share to 5% but remain behind Nissan and Hyundai, each are expected to reach 8% market shares.
- The marginal players today will remain marginal players tomorrow. But if Chinese and Indian auto makers bring cars to the U.S. they will grab up to 2% of the market almost instantly, presumably with low-priced small or minicars.
- BMW which has logged solid market share gains since 1989, is positioned for continued growth when luxury vehicles become fashionable again. The same is true for rival Mercedes Benz, but to a lesser extent.
Unlike the past 30 years, no single light-vehicle segment is expected to dominate. The post recession U.S. market should show a remarkable ability to achieve balance, according to WardsAutoForecasts.
Light vehicle sales peaked at 17.3 million units in 2000. Those days are long gone.
For several subsequent years the U.S. hovered near that number until the bottom fell out in 2008 and drove the tally down to 13.2 million units.
This year the market should hit bottom at 9.8 million units before trending upward to 11.3 million in 2010, 13. 4 million in 2011 and 13.8 million in 2012.
Jack Sayer consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
