The latest edition, "Car Wars 2014-2017," has just been published, and it contains some surprising conclusions:
--Big market share swings are over. Murphy sees the industry remaining remarkably stable over the next four years.
--Domestic market share erosion has slowed for the medium term. Scheduled product launches by General Motors and Ford should enable them to each gain a point of share by 2017.
--The Korean new model assault is losing steam. A slower pace of model redesigns points to a loss of share for Hyundai and Kia going forward.
Murphy's analysis is straightforward. He's found that the rate of product replacement and the age of models in the showroom drive market share: Faster turnover and younger product translates into more sales. So he determines the major model launches planned by each manufacturer, calculates the percentage of its total volume the launches represent, and then calculates how fast each manufacturer is turning over its product line.
Based on his estimates, Murphy believes that the large market share shifts that occurred over the last decade are unlikely to continue. Reason: Most manufacturers are turning over their product lines every two to three years, so they all have fresh product in their showrooms. However, he expects General Motors (Fortune 500), , Ford (Fortune 500), and , Toyota ( to gain fractions of share from smaller competitors. The gains won't be huge: one point of U.S. market share for GM and Ford, and eight-tenths of a point for Toyota. Korean and European brands are forecast to lose half-a-point apiece, but Nissan is the big loser, seen losing a point of share. That's largely because redesigns of the Altima and Sentra, its two highest-volume models, fall outside the forecast period, which may not sit well with )CEO Carlos Ghosn. He wants to double U.S. sales over the next few years,
The industry's pace of new product introduction is accelerating as manufacturers rush to enter new segments like crossovers and hybrids, and try to make up for time lost to economic factors like the 2008 Lehman collapse and the 2009 bankruptcies of GM and Chrysler. The peak years for new products are 2015 and 2017 when 50 new models are due; they are the second-busiest 12-month periods in recent history.
Murphy attributes the acceleration to the demands of competition. Auto companies, he writes, can compete on cost, product superiority, or product differentiation. "For most OEMs, the first strategy has been unachievable, and it is even tougher to differentiate on cost," he writes. "On the second strategy, there has been extreme convergence in quality as all automakers have improved to a relatively common level." That forces automakers to compete by differentiating their products.
The hottest product segment remains crossover utility vehicles that are stealing sales from traditional small and midsize cars. Murphy figures that of the 175 new models expected over the next four years, nearly one-third will be crossovers. Detroit is going especially crossover crazy. Ford and Chrysler have five new models apiece scheduled for introduction, while GM has eight. The shift to crossovers should help lift the dependence of the former Big Three on light trucks as the market shifts to more fuel-efficient vehicles. While light trucks represent 30% of industry production overall, GM, Ford, and Chrysler depend on them for around 45% of their sales.
For those who like to gaze deeper into crystal balls, Murphy makes some educated guesses about some all-new nameplates. He sees two new Lincolns, the MKM coupe and MKA sedan arriving in 2017. As for Chrysler, Murphy sees a sporty coupe called the Barracuda and a small Chrysler, the 100, coming out of Auburn Hills in 2015, though he adds, "It should be noted that many products appeared to have slipped from the pipeline." He identifies no new models bearing the Alfa Romeo or Fiat brands.
All of this new product comes at a high cost to manufacturers. They will need to leverage global platforms and simplify product offerings to remain efficient and competitive. For consumers, of course, it is a bonanza. Up-to-date products, rapid turnover, and the efficient workings of a global marketplace all work to their advantage.
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