You would think we were in the boom times for vehicle manufacturers instead of in the middle of a pandemic. And you wouldn’t imagine that as analysts are predicting 2020 sales will be down by over 25% of manufacturers are planning on launching 250 new models between 2021 and 2024. That’s over 60 new car launches a year. In normal times the number of new model launches averages out to be 40 since the 1990s.
Manufacturers have to look well into the future for product cadence. No one ever could have predicted a global pandemic for 2020. Or that we would be in a recession that started in February. So, will their plans from roughly three years ago fit the circumstances we are in now? Demand is way down and it has nothing to do with undesirable vehicles sitting on dealer’s lots.
Almost 50% of new car launches will be crossovers
We can break down what is coming down the pike to give you an idea of what to expect. Almost 50% of these new vehicles will be crossovers according to Automotive News. SUVs and pickups will make up about 30%. Only half of these new models will have internal combustion engines. The other half will be split between hybrids and electric.
Based on forecasts by Bank of America, while 2020 will sell under 13 million vehicles, 2021 will see a rebound of 14.5 million. The study suggests Honda, Hyundai-Kia, and Ford will be in the best position to increase their share of certain markets. That’s because they will have the newest products and new products usually gain market share.
Ford is in the best position of the Detroit 3 with the Bronco, Mach-E, and new F150
With the Bronco, Mustang Mach-E and all-new F150 pickup Ford is positioned the best of the Detroit 3. GM has switched its focus to EVs which tend to sell in lower volumes. FCA is a wild card because of the impending merger with the PSA Group. At this point, we don’t know what Fiat Chrysler’s product portfolio will look like.
Of the Japanese manufacturers, Toyota surprisingly will lag behind. Honda should increase its market share the most with Nissan not far behind. Nissan has let its lineup age with sales slowing the older each model gets. So it is now finally ready to launch a number of models that should have been replaced years ago.
Of the European companies, Daimler is in better shape than VW or BMW
Hyundai and Kia are best positioned to expand in the near term. That’s because they are pursuing the small car market that a number of manufacturers have abandoned. So their new small car models are in markets with fewer players which means larger shares. Of the European companies, Daimler looks to be in better shape than Volkswagen or BMW to capture more market shares.
There are a lot of question marks with the pandemic playing topsy turvy on anyone’s predictions. New vehicle sales are pickup up, but so is the coronavirus. While the numbers are flat many states in the south and west are seeing numbers spike up. Some are worried a second wave of infections is already beginning as has happened with other pandemics.
That could completely change any forecast and not for the better.