OEM Measures to Expand Sales of SUVs and Pickups in the U.S.

Light trucks exceed 70% of the U.S. market, EV launch plans are in full swing



  Looking back on the U.S. automobile market over the past year, although 2019 U.S. car (light vehicle) sales were down by 1.2% year-over-year (y/y) to 17.180 million units, the year was distinguished by a sustained low unemployment rate and favorable economic conditions symbolized by high stock prices, where the level of vehicle sales exceeded 17 million units for the fifth consecutive year. Even in 2020, GM’s recovery after the labor strike helped the market, and in January and February, the SAAR (seasonally adjusted annualized rate) of more than 17 million units sold continued to be maintained, demonstrating the market’s solidity. However, in March, production and the supply chain was disrupted due to the new coronavirus pandemic. Due to shrinking demand, vehicle sales fell sharply by 38.4% y/y to 990,332 units. In April (preliminary figures), the rate of decline widened by 46.6% to 710,827 units. The current situation is such that the future decline in production and sales due to the spread of the pandemic cannot be foreseen.

  Regarding the trade friction between the United States and China, which had been a source of uncertainty surrounding the automobile industry, the U.S. and China reached consensus on the provisional trade agreement (first phase agreement) at the end of 2019. After impacting the global economy for nearly two years, the “trade war” has entered into a truce for the time being. In addition, the USMCA (U.S.-Mexico-Canada Agreement), which replaces the NAFTA, was ratified by the Mexican Parliament in December 2019, signed by President Trump in January 2020 after being approved by the U.S. House of Representatives, and in March approved by the Canadian Parliament, paving the way for the implementation of the agreement within 2020. However, the spread of the new coronavirus pandemic, which hit the world shortly after the industry had enjoyed some relief, is not only hitting production and sales directly, but is also starting to once again adversely impact OEM product launch and development schedules.

  Looking at the demand structure in the U.S. market, the shift from passenger cars to light trucks (SUVs and pickup trucks) continues to advance, while in the meantime there is increased intensity in the competition surrounding development in the field of CASE technologies, including electrification, focusing on practical application and the market launch of new products. Also, specific market entry plans from the emerging automakers and different industries have been revealed. Against this background, OEMs have announced the reorganization of their product lineups and production systems centered on SUVs and pickups, which can be expected to contribute to improved sales and profit, as well as tie-ups within and outside the industry, and new capital investment plans.

  The focus of this report is on the light truck segment, which has become the priority of each automaker, including the results and announced plans for new product launches by the major OEMs in the U.S. over the past year.

  For details on the direct impact of the coronavirus pandemic beyond March 2020 and the measures being taken by each company, please refer to the LMC Automotive production forecast in the last section of this report, as well as the following content links.


Related reports:
Emerging U.S. EV makers: Full-fledged market entry from end-2020 (Apr. 2020)
Toyota: Expanding sales of light trucks and hybrids in the U.S. (Apr. 2020)
Tesla: Improved performance with growing Model 3 deliveries, launching Model Y SUV (Mar. 2020)
GM: Electrification, SUV portfolio enhancement, and autonomous driving (Mar. 2020)
CES 2020: Electrified vehicles and technologies (Feb. 2020)
FCA and PSA’s Merger (Part 2): Expanding CASE-related investment (Feb. 2020)
VW Group (Part 2): Investing EUR 60 billion in hybrid, electric and digital in 2020-2024 (Dec. 2019)
VW Group (Part 1): Expanding SUV lineup, accelerating NEV offensive in China (Dec. 2019)
U.S. OEM Electrification Strategies, Including EV Product Timelines (Sep. 2019)
Ford’s Corporate Transformation (Part 1): Partnership with VW on CVs, AV and EVs (Sep. 2019)
Nissan: Reducing global production capacity by 600,000 units and headcount by 12,500 persons (Aug. 2019)
OEM Operations in the U.S. in 2018 (Dec. 2018)


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