Post on 26-Jun-2020
Haig Stoddard, Industry Analyst
WardsAuto U.S. Automotive Industry Outlook – 2015
Federal Reserve Bank of Chicago
Annual Economic Outlook
Symposium December 5, 2014
Haig Stoddard, Industry Analyst
U.S. Light-Vehicle Sales – Vehicles to People
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
0
2
4
6
8
10
12
14
16
18
20
19
60
19
62
19
64
19
66
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68
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72
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80
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82
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84
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86
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88
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90
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92
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94
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96
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98
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00
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02
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06
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08
20
10
20
12
20
14
20
16
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18
20
20
Annual New Light-Vehicle Sales (millions) 10-Yr. Sales Roll (millions)
Parc (vehicles on road)/Driving-Age Population (right scale) New Vehicle Sales Per Household (right scale)
Dip due to scrappage
peaking after record
sales volumes in
1998-99
Vehicles-per-
driving age
peaked during era
of “subsidized”
sales
Sales growth continues
despite lower projected
household and parc
ratios
• Population still
growing
• A lot of vehicles on
the road will need
replacing
Source: WardsAuto and publically available sources .
Forecasts: WardsAuto and U.S. Census Bureau.
Haig Stoddard, Industry Analyst
• Assume economic growth averages between 2% and 3% annually through 2020.
• Assume interest rates stay in line with economic growth.
• Growing population in general - even though growth rates have slowed
• Used-vehicle prices could trend down but should remain relatively strong overall – good in long run for new-vehicle sales (trade-in value)
• Heavy lease replacement at least through 2018-19
• More content on lower-price vehicles – there is some blurring between premium-priced and non-premium
• Even if there is a cost penalty to meeting fuel efficiency mandates, there will be more smaller (or less robust) and lower-priced vehicles available - trucks from CUVs to full-size pickups already have undergone major improvements in fuel efficiency in just the last year, with more improvements to come
• THE BIG ONE: Replacement – the next five years will be a good time to be in the car and truck scrappage business; a lot of vehicles on the road for 10-plus years.
Millennials eventually will need vehicles (more will strike out on their own as long as economic and job growth continue)
More seniors, because they’re living and driving longer, will replace vehicles that would not have been replaced in prior times
U.S. Light-Vehicle Sales – Why Bullish
Haig Stoddard, Industry Analyst
U.S. Sales – Seasonally Adjusted Annual Rate (SAAR) (Light vehicles in millions)
15.7
16.5
16.8
16.6 16.6
16.8 16.9
17.0
17.2
14.5
15.0
15.5
16.0
16.5
17.0
17.5
14.5
15.0
15.5
16.0
16.5
17.0
17.5
Q1 Q2 Q3 Q4 (Estimate Q1 (Forecast) Q2 (Forecast) Q3 (Forecast) Q4 (Forecast) Entire Year(Forecast)
2014 2014 2014 2014 2015 2015 2015 2015 2016
Quarter 12-Mo Roll
Annual U.S. Light-Vehicle Sales
2013 Actual: 15.5 million
2014 Estimate: 16.4 million
2015 Forecast: 16.8 million
2016 Forecast: 17.2 million
Haig Stoddard, Industry Analyst
• There is still pent-up demand created from the recession that should last through 2016 – scrappage should accelerate.
• Economic growth expected to be good
• Off-lease volume will continue gaining steam
• Competitive pressure expected to push up retail incentive activity, though not necessarily to out-of-control levels
• Fuel prices expected to remain relatively low
• The specter of rising interest rates should not have much of a negative effect in 2015 or 2016 – subprime lending continues to expand
• New offerings and key redesigns in the fast-growing cross/utility segment
• Pickups and large sport/utility vehicles boost industry volume through fresh product and competitiveness – Last stand of the traditional truck?
Short-Term Sales Outlook – cont.
Haig Stoddard, Industry Analyst
81% 79%
80%
66%
48%
71% 72%
86%
94% 98%
100%
40%
50%
60%
70%
80%
90%
100%
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(Estimate)
2015(Forecast)
U.S, Light Vehicle Production Annual Capacity Utlization (right scale)
U.S. Light-Vehicle Production vs. Capacity Utilization
Haig Stoddard, Industry Analyst
2.86
2.97
2.82
2.77
2.98
3.07
2.88 2.86
100%
103%
96%
94%
104%
105%
96%
95%
92%
94%
96%
98%
100%
102%
104%
106%
2.5
2.6
2.7
2.8
2.9
3.0
3.1
3.2
3.3
3.4
3.5
Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015
Production Production (Forecast) Capacity Utilization (right scale) Capacity Utilization (Forecast: right scale)
U.S. Light-Vehicle Production and Capacity Utilization by Quarter (Production in millions)
Source: WardsAuto
Annual U.S. Production/ Capacity Utilization
2013 Actual: 10.9 million/94.1%
2014 Estimate: 11.4 million/98.2%
2015 Forecast: 11.8 million/100.0%
Haig Stoddard, Industry Analyst
• Jan.-Feb 2014
inventory pushed up
because of the
winter-related crimp
on sales
• March 2014 sales
included holdover
from Jan-Feb, thus
inventory declined
month-to-month
• Q2 2014 sales
included some
holdover from Q1
80
70
64 66
59 61
55 53
60
71
74
64
0
10
20
30
40
50
60
70
80
90
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Volume 2014 (Unadjusted)
Volume 2015 (Unadjusted - Optimum, based on forecasted quarterly SAARs)
Optimum Days' Supply in a perfect world (right scale)
• Q3 2014 inventory
started to get ahead
of demand – some
inventory buildup for
upcoming tooling
shutdowns partly
why
• August 2014 surge
to 17.3 million
annual rate
alleviated much of
the overflow
• Q4 2014 inventory in
balance with demand –
sales growing largely
based on economic
fundamentals (though
retail and dealer
incentives are ticking up
2015 Forecast SAAR: 16.6mm
2014 Actual SAAR: 15.5mm 2015 Forecast SAAR: 16.8mm
2014 Actual SAAR: 16.5mm 2015 Forecast SAAR: 17.0mm
2014 Estimated SAAR: 16.6mm
2015 Forecast SAAR: 16.9mm
2014 Actual SAAR: 16.8mm
NOTE: End of Q1 2015/beginning of Q2 2015 inventory likely lower due to tooling shutdowns mostly at plants in
Canada and Mexico
NOTE: December 2015 should be highest
volume sales month of year, possibly including
SAAR
U.S. Light-Vehicle Inventory Assessment
Haig Stoddard, Industry Analyst
0%
5%
10%
15%
20%
25%
30%
SMALL CAR MID CAR LARGE CAR LUXURY CAR CROSS/UTILITY SPORT/UTILITY PICKUP VAN
2013 (Actual) 2014 (Estimate) 2015 (Forecast)
U.S. Light-Vehicle Sales by Segment Group
Haig Stoddard, Industry Analyst
U.S. Light-Vehicle Sales: % Share by Segment (Including projected segment best-sellers 2015 Calendar Year)
2009 2010 2011 2012 2013 2014 2015 2015 Segment Best Sellers SMALL LOWER 3.8 3.6 3.9 4.0 4.0 4.2 3.9 Nissan Versa, Kia Soul SMALL UPPER 15.3 13.9 13.7 14.2 13.8 13.2 12.8 Honda Civic, Toyota Corolla SMALL SEDAN TOTAL 19.0 17.4 17.6 18.2 17.8 17.4 16.7 MIDDLE LOWER 15.6 14.6 14.6 16.3 15.5 14.8 14.5 Toyota Camry, Honda Accord MIDDLE UPPER (near-premium) 3.2 3.2 3.0 3.0 2.6 2.4 2.4 Toyota Prius, Nissan Maxima MIDDLE SEDAN TOTAL 18.8 17.8 17.6 19.3 18.1 17.2 16.9 LARGE CAR 4.2 4.0 3.2 2.8 2.6 2.1 2.0 Chevrolet Impala, Dodge Charger LARGE SEDAN TOTAL 4.2 4.0 3.2 2.8 2.6 2.1 2.0 LUXURY LOWER 4.5 4.4 4.4 4.4 4.9 4.3 4.1 BMW 3-Series, Mercedes C-Class LUXURY MIDDLE 1.6 1.7 1.5 1.5 1.6 1.7 1.6 Mercedes E-Class, BMW 5-Series LUXURY UPPER 0.4 0.5 0.5 0.5 0.6 0.5 0.5 Mercedes S-Class, Tesla Model S LUXURY SEDAN TOTAL 6.5 6.5 6.4 6.3 7.1 6.5 6.3 SMALL SPECIALTY 0.9 0.6 0.8 1.3 1.2 1.0 1.0 Fiat 500, Volkswagen Beetle MIDDLE SPECIALTY 1.9 1.9 1.6 1.5 1.4 1.3 1.5 Ford Mustang, Chevrolet Camaro LUXURY SPECIALTY 0.3 0.3 0.3 0.3 0.3 0.5 0.6 BMW 4-Series, Audi A5 SPECIALTY CAR TOTAL 3.0 2.7 2.7 3.1 2.9 2.9 3.1 LUXURY SPORTS CAR 0.4 0.3 0.3 0.3 0.4 0.5 0.5 Chevrolet Corvette, Porsche 911 SPORTS CAR TOTAL 0.4 0.3 0.3 0.3 0.4 0.5 0.5 SMALL CROSS/UTILITY 2.1 2.1 2.7 2.1 2.6 3.0 3.5 Subaru XV Crosstrek, Jeep Patriot MIDDLE CROSS/UTILITY 14.2 15.9 15.6 15.5 16.1 17.4 17.6 Honda CR-V, Ford Escape LARGE CROSS/UTILITY 2.6 2.6 2.4 1.9 2.5 2.2 2.1 Chevrolet Traverse, GMC Acadia TOTAL NON LUX. CROSS/UTILITY 18.9 20.6 20.7 19.5 21.2 22.6 23.2 SMALL LUX. CROSS/UTILITY 0.2 0.2 0.2 0.3 0.4 0.4 0.9 Mercedes GLK, Audi Q3 MIDDLE LUXURY CROSS/UTILITY 2.6 2.9 3.0 3.1 3.0 3.1 3.2 Lexus RX, Cadillac SRX LARGE LUXURY CROSS/UTILITY 0.6 0.8 0.7 0.8 0.9 0.9 0.9 Acura MDX, Infiniti QX60 TOTAL LUXURY CROSS/UTILITY 3.4 3.9 3.9 4.2 4.3 4.4 5.0 SMALL SPORTS/UTILITY 1.7 1.5 1.7 1.6 1.0 1.1 1.0 Jeep Wrangler (only offering) MIDDLE SPORTS/UTILITY 2.0 2.4 3.3 3.3 3.3 3.5 3.3 Ford Explorer, Jeep Grand Cherokee LARGE SPORTS/UTILITY 2.2 2.1 2.1 1.6 1.7 1.8 2.0 Chevrolet Tahoe, Chevrolet Suburban TOTAL NON LUX. SPORTS/UTILITY 5.9 6.0 7.0 6.5 6.0 6.4 6.3 MIDDLE LUXURY SPORT/UTILITY 0.5 0.5 0.3 0.3 0.3 0.3 0.3 Lexus GS, Range Rover Sport LARGE LUXURY SPORT/UTILITY 0.5 0.5 0.5 0.4 0.4 0.4 0.4 Cadillac Escalade, Cadillac Escalade ESV TOTAL LUXURY SPORTS/UTILITY 1.0 1.0 0.8 0.7 0.7 0.8 0.7 SMALL PICKUP 2.6 2.3 2.3 1.9 1.6 1.5 1.8 Toyota Tacoma, Chevrolet Colorado LARGE PICKUP 10.7 11.6 11.7 11.2 12.1 12.1 12.0 Ford F-Series, Chevrolet Silverado TOTAL PICKUP 13.3 13.9 14.0 13.1 13.6 13.6 13.8 SMALL VAN (mostly minivans) 4.1 4.2 4.0 4.0 3.7 3.7 3.9 Chrysler Town & Country, Dodge Caravan LARGE VAN 1.5 1.7 1.8 1.7 1.7 1.7 1.6 Ford Transit, Chevrolet Express TOTAL VAN 5.6 5.9 5.8 5.8 5.3 5.4 5.5
Car share
will turn up
if pump
prices rise
(>$3.50 for
significant
turnaround)
Haig Stoddard, Industry Analyst
0%
5%
10%
15%
20%
25%
30%
SMALL LIGHTVEHICLES (Cars,CUVs, SUVs)
MIDDLE SEDANS
LARGE TRUCKS(CUVs, SUVs,Pickups, Vans)
LUXURY LIGHTVEHICLES
LUXURY SEDANS
LUXURY TRUCKS(CUVs, SUVs)
Small vehicles are sensitive to swings in gas prices; sales of cars are down but trucks (CUVs and Jeep
Wrangler – the lone small SUV now in the market – are pushing share back up. Small CUVs include new
luxury versions
Midsize sedans losing out the most to surge in CUV demand; also negatively impacted to small extent by
softening demand for hybrids
Excludng vans, share for large trucks would rise in 2015; new F-150, relatively new Chevrolet Silverado, GMC Sierra , will prime pickups; GM’s new big SUVs will pump the large SUV segment. Big vans losing
volume to onslaught of new small commercial vans
Luxury vehicles are undergoing some softening after strong growth – cars are the weakness; trucks,
including new small CUVs, will lead an increase in luxury share one more year
U.S. Light-Vehicle Sales by Selected Segment Groupings
Haig Stoddard, Industry Analyst
Monthly U.S. Sales vs. Gasoline Retail Price ($US per gallon)
$2.90
$3.10
$3.30
$3.50
$3.70
$3.90
40%
42%
44%
46%
48%
50%
52%
54%
56%
1/2
01
2
2/2
01
2
3/2
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2
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2
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2
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01
2
9/2
01
2
10
/20
12
11
/20
12
12
/20
12
1/2
01
3
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01
3
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01
3
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01
3
5/2
01
3
6/2
01
3
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01
3
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01
3
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01
3
10
/20
13
11
/20
13
12
/20
13
1/2
01
4
2/2
01
4
3/2
01
4
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01
4
5/2
01
4
6/2
01
4
7/2
01
4
8/2
01
4
9/2
01
4
10
/20
14
11
/20
14
% LIGHT TRUCK OF TOTAL MARKET Gas ($) - right scale
$2.90
$3.10
$3.30
$3.50
$3.70
$3.90
2.5%2.7%2.9%3.1%3.3%3.5%3.7%3.9%4.1%4.3%4.5%
1/2
01
2
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01
2
3/2
01
2
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01
2
5/2
01
2
6/2
01
2
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01
2
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01
2
10
/20
12
11
/20
12
12
/20
12
1/2
01
3
2/2
01
3
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01
3
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01
3
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01
3
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01
3
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01
3
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01
3
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01
3
10
/20
13
11
/20
13
12
/20
13
1/2
01
4
2/2
01
4
3/2
01
4
4/2
01
4
5/2
01
4
6/2
01
4
7/2
01
4
8/2
01
4
9/2
01
4
10
/20
14
11
/20
14
% HYBRID/ELECTRIC OF TOTAL MARKET Gas ($) - right scale
34 42 46 49 54 56 58
Gasoline Prices: U.S. Energy Information Administration
Number of Hybrid/Electric Offerings on Sale
• Lower fuel prices help
total volume but are
having a greater effect
on the mix – MORE
TRUCKS
• Helping sales of pickups
and SUVs, but it’s really
the small and midsize
crossovers supplanting
small and midsize cars
that is pushing up truck
penetration
• Lower fuel prices is
capping demand for
alternative fuel vehicles
Haig Stoddard, Industry Analyst
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
GM FORD TOYOTA FIAT CHRYSLER HONDA NISSAN HYUNDAI/KIA VOLKSWAGEN/AUDI OTHER
2013 2014 (Estimate) 2015 (Forecast)
Forecast U.S. Light-Vehicle Market Share by Manufacturer
GM: share rises on sales of big
trucks – pickups, SUVs, CUVs
Toyota: temporary decline
while it transitions to
some new product and tries to fix Scion brand
Ford: share drops again –
transitioning to new pickup and
Edge CUV; higher gas prices would help share (cars)
Fiat Chrysler: share rise again as it
continues replacing old product and bringing another
new Jeep
Honda: One more year of softening until new Civic,
Pilot, HR-V in full availability in
2016
Nissan: Riding new product
wave and recent increases in
capacity to meet demand; pickups and SUVs cause
flattening in 2015
Hyundai/Kia: Kia brqnd will keep
share from declining;
Hyundai portfolio gets a jumpstart
in 2016
VW/Audi: All Audi – even bucking the
softening in luxury cars. VW brand
portfolio generally old and missing a
mid-CUV
Other: Increased share in 2015 mainly due to
Subaru; BMW and Mercedes helping with luxury trucks
Haig Stoddard, Industry Analyst
Thank You
Lisa Williamson Bus. Development Director
1-248-799-2642 lwilliamson@wardsauto.com
Amber McLincha Bus. Development Manager
1-248-799-2622 amclincha@wardsauto.com
Haig Stoddard
Industry Analyst
1-248-799-2619
hstoddard@wardsauto.com