Study: Toyota, GM have best chance to gain market share
Toyota Motor Corp. and General Motors Co. are forecast to have the most redesigned or new vehicles over the next four model years and have the best chance to gain market share, according to an annual study by a Wall Street analyst that assesses the strength of carmakers’ vehicle pipelines.
The Car Wars 2018-2021 report from Bank of America Merrill Lynch found 85 percent of Toyota’s vehicles will be redesigned or new from model-year 2018 through 2021, with General Motors Co.’s at an 84 percent rate and Ford Motor Co. at an 83 percent predicted replacement rate.
Toyota has new versions of high-volume nameplates coming such as the Camry and RAV4. GM is launching new crossovers, its next-generation of full-size pickups and new SUVs. While Ford has a lull in 2018 model-year vehicles, its has debuts for the 2019 and 2020 model years with vehicles such as a new Bronco SUV and Ranger pickup.
Typically automakers that have the newest lineup of vehicles gain share, John Murphy, senior auto analyst for Bank of America Merrill Lynch Global Research, on Thursday told the Automotive Press Association in Detroit.
Murphy expects Ford and Honda Motor Co. Ltd. to see flat market share in 2020 vs. 2016, while Fiat Chrysler Automobiles NV; Nissan Motor Co. Ltd. and the Korean and European automakers would lose share.
But Murphy cautioned that market share growth could depend on what the overall U.S. sales market size is.
Bank of America Merrill Lynch has predicted the industry will sell 17.9 million vehicles this year in the U.S., which Murphy said may be too optimistic. Through the first four months of the year, the pace of U.S. industry sales is about 17.1 million vehicles. Last year, automakers sold a record 17.47 million cars, trucks and SUVs in the U.S.
Murphy has predicted sales of 18 million next year — down from an earlier prediction of 20 million vehicles. He expects sales to decline to 13 million to 14 million vehicles by the mid-2020s. But that decline could happen as soon as 2021 if the industry this year falls short of predictions in sales, especially because of an expected 3.5 million leased vehicles being turned into dealers this year. Murphy said there is risk to the industry to absorb those leased vehicles if automakers can’t sell 17.5 million vehicles in 2017.
“What we’re staring down the barrel of is the lease tsunami” that begins this year, Murphy said.
The number of cars returning off-lease is expected to hit a record nearly 5 million in 2019, given the higher-than-average lease rates the past few years. Last year, about 30 percent of new cars, trucks and crossovers sold were leased, which is about 10 percent higher than historical levels, Murphy said.
Industry-watchers will be looking to see where those lease buyers go, whether leasing again or shifting to a used car — and if automakers react by boosting incentives or cutting prices.
“I think the discipline will hold relatively well,” Murphy said. “So I do think we’re looking at pressure more on volume than necessarily price.”