July 14, 2014 at 2:33 pm

Automakers speed up debuts to survive in tough market

Chrysler's 2015 Jeep Renegade. (Chrysler)

Get ready for a wave of new cars and trucks.

Automakers, in an attempt to survive in a hyper-competitive market, are introducing more new vehicles than at any point in the past two decades. The trend is powered by a desire to gain market share, capitalize on the popularity of segments such as subcompact SUVs, meet stricter federally mandated fuel requirements and entice new buyers with fresh products.

Automakers have launched an average of 38 new models per year for the past two decades, but over the next four years that number should balloon to an average of 48 new models per year, according to John Murphy, senior auto analyst for Bank of America Merrill Lynch Global Research.

“The model-intro activity is picking up pretty aggressively as we go through the next four years,” Murphy told automotive journalists in Detroit recently.

“The companies have had enough time to recover from the trough in sales in 2009, ramp up the product investment and pull some stuff forward a little bit, and what we’re going to see in the next four years is some great new products being launched in the showroom. And obviously new products should help bring consumers into the showroom to drive sales higher.”

The gearing up already is underway.

Among the American automakers, General Motors Co. intends to introduce five all-new Chevys next year alone; Ford Motor Co. is in the midst of launching 23 all-new or refreshed products this year, while Chrysler Group LLC’s introductions include the redone 200 midsize sedan, Jeep Renegade subcompact crossover and ProMaster City cargo van.

“I think that a lot of it is that cars are almost a fashionable commodity,” said Jessica Caldwell, senior analyst for California-based automotive research firm Edmunds.com. “Automakers are trying to find these popular niches and be ahead of the trend and find something consumers will want.”

Among foreign automakers launching new products in model year 2015, BMW has a B3 sedan, B4 coupe and X6 SUV, among other cars; Hyundai has a Genesis Coupe and Sonata midsize sedan; and Audi plans an A7/S7 sedan and TT coupe, according to automotive research firm AutoData.

“Everyone’s in a quest for market share,” Caldwell said. “In order to do that, you need to be the first shaker on trends. No one wants to be late to the party.”

In addition to getting a greater share of the U.S. market, Caldwell said automakers are looking to expand their offerings in emerging markets such as India, the Middle East and China.

Murphy predicts U.S. sales will hit 18 million by 2018. The U.S. auto industry sold about 15.6 million last year, and most industry experts are estimating this year’s sales at 16.5 million to as many as 17 million.

Ford's big launch

Analysts say Ford has been decreasing its number of vehicle platforms — the underpinnings of cars and trucks — while cranking out more new models for a number of years with its One Ford business model. This year is no different.

“We have the most aggressive product launch schedule in our history, with 23 all-new or significantly refreshed vehicle launches globally — more than double the 11 global vehicles launched in 2013,” Said Deep, Ford’s North America product communications manager, said in an email.

Ford said 150 percent of its lineup will change with new or major updates between 2014 and 2018. Those new vehicles include the North American launch of the Ford Focus, Focus Electric, Mustang, Transit Connect wagon, Transit Connect, Transit, F-150, Expedition, Focus ST, Edge and F650/F750, plus the Lincoln MKC and Lincoln Navigator.

Ford expects to have the lowest average age for global passenger vehicles in 2014, Deep said.

“Our push to keep our products fresh is a fundamental part of our future product plans. Customers expect and want to have more selection, and our plan is to deliver that with the industry’s freshest vehicle lineup.”

In the short run, GM’s 2015 Chevy lineup includes the Chevy Trax small SUV, Silverado 2500HD, Tahoe, Colorado and City Express cargo van.

Chrysler’s new products includes a first-ever foray into the small van market. Last month the Auburn Hills automaker introduced the 2015 Ram ProMaster City, meant to compete with the likes of Ford’s popular Transit Connect, Nissan’s NV200 and Chevrolet’s soon-to-be-released City Express.

It will go on sale early next year.

“Automakers are trying to do an ‘everything for everyone’ approach,” Matt Degen, editor for Kelley Blue Book’s KBB.com, said in an interview.

'Crossovers are hot'

The growth in new product offerings is being driven, in part, by the rise in popularity of crossovers.

In its “Car Wars” report this spring, Bank of America Merrill Lynch Global Research said that between 2005 and 2014, crossovers represented 25 percent of new models. That number will jump to 28 percent between 2015 and 2018.

“Crossovers are hot,” Degen said. “Nowadays, probably more than ever, people want something different.”

AutoData, in a June report, lists at least 17 crossovers and light trucks that will receive “major revisions” between now and model year 2018.

Even the luxury brands, in a quest to offer fuller lineups, are getting in on the SUV trend.

Lincoln just launched its new MKC, Porche will offer the Macan, and Mercedes has the GLA.

“It seems like the luxury brands are so eager to sell cars in the lower price brackets,” Caldwell said. “They see a lot of sales growth in those areas.”

Part of the rise of SUVs includes the wildly popular subcompact segment. IHS Automotive predicts that segment — including smaller offerings such as the Nissan Juke, Buick Encore and the soon-to-be introduced Jeep Renegade — will hit 500,000 in sales by 2019. In 2005, that market was nonexistent.

Despite the wave of new models, Caldwell and Degen think it’s inevitable that the trend will level off at some point.

“I think there has to be some sort of slowdown, but manufacturing is changing and it’s making it easy to diversify cars,” Caldwell said. “Automakers know people like to be different and unique.”

Melissa Burden contributed.
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