Automakers will see little shift in market share over the next four years as the industry stabilizes, with Ford Motor Co. and American Honda Motor Co. Inc. expected each to gain a half-percentage point of market share in the U.S. by 2017, according to a Wall Street analyst’s report.
John Murphy, senior auto analyst for Bank of America Merrill Lynch Global Research, told the Automotive Press Association on Monday in Detroit that the industry’s new vehicles coming in the next few years are heavily tilted toward trucks and compact crossovers.
Murphy wrote “Car Wars 2015-2018 The U.S. Automotive Product Pipeline.” The annual report looks at industry product trends and automakers’ product pipelines in the United States.
Ford’s U.S. market share is forecast to grow from 15.7 percent in 2013 to 16.2 percent in 2017 on the basis of solid new rollouts. Honda’s market share is expected to grow from 9.8 percent to 10.3 percent over the same time period.
Murphy predicts General Motors Co. will hold onto its 17.9 percent market share. The Korean auto companies and Toyota Motor Corp. likely will maintain share, and Murphy also expects Fiat Chrysler Automobiles NV to maintain its 11.5 percent market share.
He called FCA’s CEO Sergio Marchionne’s expectations to considerably grow market share by 2018 a “pie-in-the-sky” target.
“I think Marchionne’s targets of gaining four points of market share in the U.S. market are pretty aggressive and almost unattainable unless they do something very aggressive on pricing to take market share,” he said.
European automakers overall will see a slight drop in market share. And Nissan Motor Corp., without a clear product plan, is at significant risk to lose market share, down to 7.8 percent from 8 percent, according to Murphy.
Market share is important because it “ultimately drives profitability in the marketplace by company,” he said.
Automakers in the U.S. are expected to introduce more vehicles on average through 2018. In 2015, Murphy expects 48 new models will be introduced, up from 36 in 2014. The average since the mid-1990s is 38 vehicles a year.
“The model-intro activity is picking up pretty aggressively as we go through the next four years,” he said.
Murphy predicts the U.S. seasonally adjusted annual rate of vehicle sales in the U.S. to hit 18 million by 2018 — a figure he expects could stick around for a number of years. The U.S. auto industry sold 17.4 million vehicles in 2000 and Murphy says the average age of a vehicle on the road today at 11.4 years is about 2.5 years higher than in 2000, and Americans are driving more miles.
“The idea that we can’t get to the prior peak or exceed it like every other cycle has doesn’t make any sense,” he said.