Is the North American auto industry shifting gears?
One major difference with previous crises is the fact that no infrastructure has been damaged. “The plants were still there, the lineside inventory was still there, just people left the plants”. There was a much “smoother” restart and ramp-up than expected, and Q2 results have beaten many firms’ expectations.
As well as providing estimates for production and sales in the US this year, the specialist outlined how long it could take the industry to get back on track: “We show the recovery back to pre-COVID, to 2019 levels, coming in 2024.” This was based partly on high unemployment figures, which don’t look set to improve – and “people who are unemployed are not buying vehicles”.
Zoning in on how different models have fared, “pick-up trucks have done much better than the overall market so far.” While still recording a decline, it is about half as much as the decrease for all models. CUVs also took a hit, but the specialist noted that they represent 40% of all cars sold in the US: “It’s just a much more usable vehicle for most people.” The specialist also explained how preferences could shift in line with different driving habits resulting from the pandemic.
The specialist also focused on individual players, including Ford, which has just named a new CEO. “I think he’s getting a lot of comparisons to whether he can bring back the Mulally magic at Ford and have that more of an outsider view to their culture and to restarting and reinvigorating their business.”
To access all the human insights from Third Bridge Forum’s North America Auto Industry – Demand Outlook 2020 Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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