North American original equipment manufacturers (OEMs) have posted a profit of $12.5 billion in 2010 on a net margin of 4.6 percent and North American suppliers reaped $8.2 billion on a net margin of 4.3 percent.
After surviving a period of global financial tremors, the automotive industry now finds itself facing a whole new set of competitive challenges and decisions.
The firm estimates that unemployment and underemployment could cost the US auto industry up to 1.5 million in lost vehicle sales in 2011.
Meanwhile, according to an AlixPartners survey of 1,000 Americans regarding their views of the US economy and their personal economic situations, 83 percent said they had delayed or planned to wait at least a year to buy a vehicle.
The study predicts a 13 percent compound annual growth rate (CAGR) for small cars and a 7 percent CAGR for small crossover vehicles between now and 2015 in the US, as large cars, SUVs and pickups are expected to see a CAGR of just 2 percent, respectively, in that time.
The study finds that pickup-truck sales will be hurt by the continuing housing crisis. US pickup sales for 2011 are estimated to reach only 1.7 million units, well below the recent peak of 2.9 million in 2006. It also finds that the bulk of future sales growth globally has likely permanently switched to emerging markets.
John Hoffecker, managing director at AlixPartners and co-lead of the firm’s enterprise improvement practice, said: “It’s a cliche, but the auto industry really does face a brave new world, and the differentiators for winning in the world we are transitioning to will be significantly different from the past.
“The good news is that most of the US players now have their costs in line to capitalize on a slow, steady sales recovery. On the other hand, the industry is facing some truly momentous, and momentously expensive, decisions on everything from powertrain choices to emerging markets; and for OEMs to count on a US sales bubble like in the last cycle - artificially-induced to begin with - to help fund all that is wishful thinking at best.”
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