The twenty fifth edition of the annual influential Bank of America Merrill Lynch Car Wars report sees most of the automakers holding on to their current market share quota, sales including the Detroit Three, seek but the victors and losers might be Honda and South Korea’s Hyundai, respectively.
Japan’s third largest automaker, Honda, could be in the best situation to profit from the rising sales across the US market through 2019, while Hyundai and its affiliate Kia have the highest risks, said the analysis, which is based on the strength of new products slated to appear through the 206 to 2019 model years. Honda stopped adding a percentage of the annual US sales back in 2012 and is now seen as having the youngest lineup from the 2016 to 2019 model years as it drives the replacement of the vehicles making up around 96 percent of its sales tally. The report on the other hand said the two South Korean carmakers are behind the average of the industry, as only around 70 percent of its vehicles are scheduled for updates or replacements. “The replacement rate drives showroom age, which drives market share, which in term drives profits and stock prices,” commented analyst John Murphy in the report, adding the same situation was seen between 2000 and 2015.
Consumers, now rising once more to have the necessary confidence, especially younger buyers, are seeking the best and latest technical capabilities in the new cars and trucks, with global powerhouses eager to burn billions of dollars to improve designs, update technology and bring more autonomous features to future models. The Bank of America study says the manufacturers are scheduled to bring an average of 48 new models each year between 2016 and 2019 – up 26 percent from the past two decades.