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 Feature Industry Articles 
Thursday, March 22 2018
Automotive's Amazing Race

By Dawn Baetsen, president of D.E. Baetsen & Associates LLC

The race for automotive market share is intense, while the race for mobility dominance is inspiring and spectacular. The mobility culture disrupts the automotive industry in every aspect. We are at a crossroads where the world needs efficient, safety-first movement by land as we travel increasingly more miles to transport people, goods, and services. The automotive industry is finding the paths where it can make a difference as new vehicle sales growth narrows. OEMs seeking to survive are leaping to further identify with, and reside in, the mobility economy where service revenues will be critical for survival. The genesis of the mobility economy evolves and transportation’s emerging alternatives away from personal ownership to mobility as a service (MaaS), rises demand for drivetrain fueling alternatives and movement to autonomous vehicles impact the industry and how it will operate in the future. Countless new, competing entrants bringing innovative technologies or providing service alternatives to traditional automobile ownership challenge the conventional industry business model.

Posted by: AT 09:25 am   |  Permalink   |  Email
Friday, March 24 2017
Driving the Future of Automotive - Update 2017

By Dawn Baetsen, president of D.E. Baetsen & Associates LLC

  The automotive industry enjoyed another year of growth; yet, the industry may face its most arduous task of effectively fusing rapidly-changing technology while providing product that satisfies the consumer experience, is built with the highest standards of safety and security, meets government standards, and is built to last while maintaining affordability for consumers. Government is in the driver’s seat regarding taxation, regulation, and protectionist policies all having tremendous long term effects on the industry. Relaxed regulatory standards and reduced corporate taxes encourage the industry; however, trade agreements and border taxes will have an impact and will increase the cost of automobiles. On the minds of all automotive executives is the effects of emerging political risks in the major markets of North America, the European Union, China, and Brazil. Social and economic disorder follows and regional market economies will significantly impact the global industry now and in the future. Despite overarching macro-economic risks, the industry is focused on the consumer driving markets while a new culture of vehicle access versus vehicle ownership emerges.

  The three major markets for automakers grew during 2016 with China sales growing by 15 percent or to 24 million units. The United States grew by 0.2 percent or 17.9 million units, while Europe posted an 7 percent increase to 15 million units. The Japanese market for a second consecutive year declined -1.5 percent largely due to a sluggish economy while emerging markets of Brazil and Russia continued to fall off -21  and -11 percent, respectively, as reported by Euler Hermes Economic Research. India’s demonetization policy took a toll on vehicle purchases declining 50 percent during 2016. Most automotive research groups suggest maintaining a global presence is critical to sustaining growth as shifts to a mobility culture, particularly in urban areas, will impact light vehicle demand for size and type depending on the market and regional demographic nuances. 

Posted by: AT 09:30 am   |  Permalink   |  Email
Tuesday, March 15 2016
Automotive Industry In Overdrive

By Dawn Baetsen, president of D.E. Baetsen & Associates LLC

The automotive industry is in a revolution that will change the traditional business model and industry structure as we know it. Despite global economic unrest, low oil prices, and stock market contraction, the automotive market is speeding forward, designing and producing cars that appeal to the masses, which are safer and increasingly safer for the environment. This movement is not without flaws as tensions intensified between automakers and government with unprecedented recalls and the fallout of “dieselgate.”

The automotive industry enjoyed a 6th straight year of growth in 2015, despite unruly economies and governmental stress. The major markets of North America, Asia/China and Western Europe fueled 2015 global sales growth for light trucks and cars. Scotiabank reports purchases in North America rose above 20 million units. The United States auto industry alone accounted for a sales record in excess of 17.4 million units contributing to the longest streak of annual gains since the 1920s and demonstrating an impressive come back. The Asian markets posted sales in excess of 33 million with China, the world’s largest automotive market posting sales of 19.75 units. Western Europe posted 5.6 percent growth in sales predominantly from Germany. India also saw an increase in sales by over six percent. Two of the BRIC markets, Russia and Brazil, experienced weakening economies resulting in declining sales. Russia in particular experienced nearly a 40 percent decline in sales. Brazil also had a decline in sales which is expected to persist into 2016. 

Posted by: AT 08:30 am   |  Permalink   |  Email
Thursday, March 19 2015
The Global Automotive Industry - Driven by Flexibility, Geographic Transition, and the Global Economy

By Dr. C. R. (Buzz) Canup, President, Canup & Associates

The final sales and production numbers are in for the global automotive industry for CY 2014, and, for the most part, the numbers look very good. As a matter of fact, many of the automotive  brands reached record breaking levels for both production and sales on both a regional and a global basis. Looking back for a moment to the crisis of CY 2009, the automotive industry has made a remarkable recovery. In CY 2009, the world was in the middle of the worst recession in history. Every business and industry was being impacted. Every country was being impacted. Hundreds of thousands of workers lost their jobs. Thousands of businesses closed their doors, many to never open again.

The automotive industry went through an unbelievable transition during and after the Great Recession. Ford sold off almost all of its portfolio of companies, including Jaguar, Land Rover, and Volvo, and down-sized or stopped production at many of its plants. General Motors down-sized its portfolio of brand names eliminating Oldsmobile and Pontiac, selling Saab, and closing the Hummer manufacturing plant and name plate. General Motors and Ford had both initiated plans to spin off their parts manufacturing companies of Delphi and Visteon respectively prior to the recession, and both continued with those plans. Daimler-Benz shed itself of the Chrysler acquisition. Thirty-percent of Chrysler was almost immediately acquired by Fiat with no upfront cash transactions (subsequently 100 percent of Chrysler was acquired by Fiat in 2014, and the merger has become known as Fiat Chrysler Automotive or FCA).  Additional domestic assembly plants had production levels decreased with associated layoffs for both full-time and contract employees. Toyota delayed the completion and opening of its new assembly plant in Tupelo, MS. 

Posted by: AT 09:42 am   |  Permalink   |  Email
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