OEM Operations in the U.S. in 2018

Automakers cope with trade tariffs and accelerating shift towards crossovers and SUVs

2018/12/19

Summary

2018 represented a year of both gains and declines for the U.S. light vehicle market. Light vehicle sales grew in the first half of the year due to the strength of the country's economy and consumer confidence. However, rising interest rates and increasing vehicle prices contributed to a decrease in sales in the second half of the year.

U.S. trade policy has also negatively affected automakers. In 2018, the U.S. implemented steel and aluminum tariffs against most of its trading partners and began a trade dispute with China, resulting in tariffs of USD 250 billion worth of U.S. imports from China, and Chinese tariffs of USD 110 billion worth of U.S. exports. These tariffs have hurt automakers, forcing changes in production shifts and model lineups. Ford cancelled its plan to sell the Ford Focus Active, manufactured in China, in the U.S. Volvo cancelled plans to export the S60 from its new U.S. plant, while BMW shifted a portion of X3 production out of its Spartanburg plant.

The sales trend towards crossovers and SUVs continued in the U.S., as the market share for light trucks (consisting of SUVs, crossovers and pickup trucks) continued to grow. Consequently, the market share for passenger cars dropped to record lows. This has led to strategy changes, especially for U.S. automakers, as both Ford and GM announced changes to their lineup, eliminating nearly all of their sedans from the U.S. market.

Cadillac CT6, a model which will be discontinued in the U.S.

Automakers also continued their commitment towards the technological trends of connectivity, autonomy, electrification and sharing in 2018. Toyota invested in Uber and agreed to collaborate with the ride-hailing company to develop autonomous vehicle technology as a mobility service. GM and Honda made agreements to develop advanced battery technology and an autonomous vehicle through GM's Cruise organization. Mercedes-Benz began construction on a new battery plant at its Tuscaloosa, Alabama facility.

This report provides a list of significant OEM activities in the U.S. during 2018, as well as a brief overview of the U.S. market and a sales forecast of automakers in the U.S. from LMC Automotive through 2021.


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