OEM Operations in the U.S. in 2018

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



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.

Related Reports:
U.S. trade policy and tariffs under the Trump administration
(Sep. 2018)
FCA 2018-2022 Business Plan to renew portfolios of Jeep, Alfa Romeo, Maserati and Ram (Sep. 2018)
Ford to launch sixteen EVs by 2022; add partnerships for mobility and autonomous vehicles (Jul. 2018)
Japanese automakers: Future direction and plans based on recently announced financial results (Jun. 2018)
OEM Investments in the U.S. in 2017 (Dec. 2017)


Background of U.S. automotive industry in 2018

2018 continues sales trend towards SUVs and crossovers

According to LMC Automotive's sales forecast, U.S. light vehicle sales for 2018 will total 17.2 million units, remaining level compared to 2017 sales. The 2018 year-to-date (January 2018 – November 2018) results indicate that the trend of increasing market share of light truck sales and decreasing market share of passenger car sales is accelerating. August 2018 was the first month in which U.S. passenger car sales comprised less than 30% of the U.S. new vehicle sales. August was also the 26th consecutive month in which light truck sales (consisting of SUVs, crossovers and pickup trucks) surpassed 60% of the U.S. market share in new sales.

Analysts expect the trend of favoring light trucks in the U.S. to continue in the future. Bank of America Merrill Lynch forecasted in its annual Car Wars report that light trucks will make up 71% of vehicle introductions for the 2019 through 2022 model years. Jeff Schuster, president of LMC Automotive's operations in the Americas, said that light trucks could comprise between 75% and 80% of U.S. light-vehicle sales by 2025. This trend towards SUVs, crossovers and pickup trucks is caused by a number of factors, including low fuel prices, improved fuel economy on current models, recent strength in the U.S. economy, and the ease and relative affordability of borrowing money to finance car purchases in recent years. This trend, amplified by the fact that larger vehicles are more profitable, has influenced automaker strategy, as seen by GM and Ford's restructurings in 2018.

U.S. car and light truck ratio U.S. car and light truck ratio by OEM for 2018 YTD


Vehicle sales start strong in 2018, slump in second half

While new vehicle sales in the U.S. increased in the first half of 2018, weakening second-half sales are expected to cause full-year vehicle sales in the U.S. to remain level. The increase in first-half sales was attributed to factors including the strength of the U.S. economy, consumer confidence in the economy, and the tax reform package signed in 2017. Despite consumer confidence in the economy, increasing interest rates and gasoline prices, a growing inventory of used vehicles and increasing vehicle prices all contributed to decreased sales in the second half of 2018 to date. LMC Automotive forecasts that sales will decline in 2019 and 2020.

According to the Office of Transportation and Machinery, U.S. global exports of passenger vehicles and light trucks decreased by 2.0% in value and 5.8% in number of units for the first eight months of 2018 compared to the same period in 2017. If the trend continues for the rest of the year, 2018 will be the first year since 2015 in which U.S. global exports of passenger vehicles and light trucks decreased in value year-to-year. However, while U.S. exports of passenger vehicles and light trucks have been increasing in value each year since 2015, the U.S. has exported fewer units each year in that time frame.


Trade tariffs in 2018 force changes in automakers

Another area of concern for automakers in the U.S. involves U.S. trade policy. Thus far in 2018, the U.S. government has implemented import tariffs on steel and aluminum and has become involved in a trade dispute with China. While the U.S. and China agreed to postpone the implementation of new tariffs during the 2018 G20 summit, there are doubts to whether the truce will hold in the long-term. Furthermore, U.S. President Donald Trump has repeatedly suggested that he is willing to implement tariffs on automotive vehicles and parts from countries outside of North America.

Timeline of U.S.-China trade dispute updated through December 1, 2018

According to the Alliance of Automobile Manufacturers, if a 25% tariff on vehicles imported into the U.S. was implemented, vehicle costs would increase by an average of USD 5,800. The Peterson Institute for International Economics forecasted that the tariffs would cause a decrease in employment of 1.9% in the automotive vehicle and components market over a three-year period.

September 2018: U.S. trade policy and tariffs under the Trump administration



In 2018, both GM and Ford announced significant restructurings to their product lineup with plans to stop sales and production of most of their sedan models. GM will discontinue sales and production of six models in the U.S., while Ford will stop sales and production of five models across North America. Notably, both automakers are choosing to stop sales and production of most of their sedans, likely due to smaller profit margins and decreasing demand compared to other segments. This is comparable to FCA's announcement in 2016 to discontinue production of the Dodge Dart and Chrysler 200 and focus on its Jeep SUVs, Ram pickup trucks, and electric vehicle investments.

Chevrolet Cruze, a model which will be discontinued in the U.S. Ford Fusion, a model which will be discontinued in the U.S.



Company 2018 announcements
General Motors GM restructuring and realignment of model lineup
On November 26, 2018, GM announced a major restructuring, involving the unallocation of several vehicle models and the closure of four U.S. plants and one Canadian plant as follows:
  • Production of the Buick LaCrosse and Chevrolet Volt at the Detroit-Hamtramck Assembly plant in Detroit, Michigan will end on March 1, 2019.
  • Production of the Cadillac CT6 and the Chevrolet Impala at the Detroit-Hamtramck Assembly plant in Detroit, Michigan will end on June 1, 2019.
  • Production of the Chevrolet Cruze at the Lordstown Assembly plant in Warren, Ohio will end on March 1, 2019.
  • Production of the Chevrolet Impala, Cadillac XTS and previous-generation Chevrolet Silverado and GMC Sierra trucks at the Oshawa Assembly plant in Oshawa, Ontario, Canada will end in the fourth quarter of 2019.
  • Production of six-speed transmissions for the XTS, Impala, Volt, Chevrolet Malibu and Buick Acadia, along with the Global Front Wheel Electric system for the Volt at the Warrant Transmission Operations plant in Warren, Michigan will end on August 1, 2019.
  • Production of full-size pickup truck transmissions for the T1 and K2 platforms at the Baltimore Operations plant in White Marsh, Maryland will end on April 1, 2019.
Ford Motor Ford realignment of model lineup
In its 2018 first quarter financial report, Ford announced that it would discontinue sales and production of most of its sedan lineup in North America, “Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford Sedans for North America.” The announcement would result in the discontinuation of sales and production for the U.S. market of the following models:
  • Production of the Ford Focus ended in May 2018
  • Production of the Ford C-Max Hybrid ended in mid-2018, while production of the Ford C-Max Energi previously ended in September 2017
  • Production of the Ford Taurus will end in March 2019
  • Production of the Ford Fiesta will end in May 2019 according to a Ford spokesperson; However, Ford Mexico expects that production of the Fiesta will end in August 2019
  • Production of the Ford Fusion is expected to continue at least through 2020, as the end production date has not yet been specified by Ford
In August 2018, Ford announced that it would halt plans to sell the Chinese-manufactured Ford Focus Active in the U.S. The cancellation was due to tariff concerns from the U.S.-China trade dispute. This leaves the Ford Mustang as the only model in the car and sedan segment in Ford's U.S. vehicle lineup.

In October 2018, Ford officials said that job-loss announcements would not be issued until the spring of 2019. In November 2018, shortly after GM's restructuring announcement, Ford announced that it would stop shifts at its Louisville Assembly plant and Flat Rock Assembly plant and move workers to the Kentucky Truck plant and Livonia Transmission plant, respectively, to focus on the production of SUVs. In December 2018, Ford announced that it would shift production by cutting 230 positions from its Van Dyke Transmission Plant in Sterling Heights, Michigan and offering those workers positions at other Ford plants. The move is expected to occur in the first quarter of 2019.
Investment into U.S. SUV production
On February 2018, Ford announced that it would increase production of its Lincoln Navigator and Ford Expedition SUVs at the Kentucky Truck Plant. The increased production of the two SUVs was in response to growing demand for both models. Ford would invest USD 25 million into the plant and has increased production targets for the Navigator and Expedition by 25%. The investment will be used to add 400 new robots, a new 3D printer and an enhanced data analytics framework.
Future lineup plans
In March 2018, Ford announced its plans for its future vehicle lineup, emphasizing electric vehicles and electrification as well as its truck and SUV segments. In 2019, Ford will launch the Ford Ranger mid-size truck and Super Duty line of F-Series trucks. Ford will also launch the high-volume Ford Escape and Ford Explorer, which combined formed 70% of the automaker’s SUV sales. In 2020, Ford will debut its next-generation F-150 with a new hybrid powertrain. Ford will introduce the new Ford Bronco and an unnamed off-road small utility vehicle by 2020.

Ford plans to introduce hybrid options for the F-150, Mustang, Explorer, Escape and Bronco. In 2020, Ford will introduce a performance battery electric utility vehicle. The model will be the first of seven battery electric vehicles that Ford will launch by 2022 as part of Ford’s USD 11 billion investment in global electric vehicle development. In addition, by the end of 2019, all Ford models will feature standard 4G LTE Wi-Fi systems.
Creation of Ford Autonomous Vehicles LLC
In July 2018, Ford created Ford Autonomous Vehicles LLC, an organization that aims to develop the automaker’s autonomous vehicle business and capitalize on market opportunities. Ford Autonomous Vehicles LLC will manage operations including self-driving systems integration, autonomous vehicle research, the development of a transportation-as-a-service network, user experience, and business strategy and development. The company will be based at Ford’s Corktown campus in Detroit, Michigan. Ford expects to invest USD 4 billion in autonomous vehicle development through 2023, which includes a USD 1 billion investment in Argo AI.
Fiat Chrysler Investment into Michigan plant modernization
On January 2018, FCA announced that it would invest more than USD 1 billion into its Warren Truck Assembly Plant in Michigan to modernize the plant for production of the next-generation Ram Heavy Duty truck. Production of the truck will relocate from FCA’s plant in Saltillo, Mexico in 2020. This will be in addition to the production of the upcoming new Jeep Wagoneer and Grand Wagoneer. The investment was enabled in part, due to the U.S. tax reform legislation passed in late 2017. The investment is expected to create 2,500 jobs.
Future electrification plans
In its Capital Markets Day presentation, FCA announced its future model lineup, which included a number of planned electric vehicles across most of its brands. Most of these electric models are unlikely to be introduced to the U.S. market, though it is expected that some electric models will exist. FCA expects to invest approximately EUR 9 billion into electrification by 2022. By 2021, each Jeep model will offer an electric or hybrid option. Jeep will also introduce all-electric versions of the Renegade, Compass, Wrangler and Cherokee. In total, the brand will have 10 hybrids and four battery electric models by 2022. The Ram brand will also feature at least one hybrid model.
Magneti Marelli divestiture
On October 2018, FCA announced that it had entered an agreement to sell the automotive components supplier, Magneti Marelli S.p.A. to CK Holdings Co., Ltd., the holding company of Calsonic Kansei Corporation. The resulting business will operate under the new name of Magneti Marelli CK Holdings. The combined business of Calsonic Kansei and Magneti Marelli is expected to be the world’s 7th largest automotive components supplier based on revenue, at approximately EUR 15.2 billion. The transaction is expected to close in the first half of 2019 at a value of EUR 6.2 billion.
New Detroit plant
On December 6, the Detroit News reported that FCA plans to convert an idle engine plant in Detroit to an assembly plant that is expected to produce the three-row 2021 Jeep Grand Cherokee. The Mack Avenue Engine II plant had been idled since 2012. The new plant will create up to 400 new jobs. Construction on the plant is expected to begin in 2019.

Source: Company press releases and various news outlets


European OEMs

2018 featured a number of European automakers continuing their commitments in the U.S. Most notably, Volvo opened its new production facility in Charleston, South Carolina, its first plant in the country. Volkswagen announced a significant investment in its U.S. operations for new U.S. market models. The automaker also confirmed plans to build a new plant in North America for electric car production. While Volkswagen believes that its current location in Chattanooga, Tennessee is suited for the new plant, the automaker left the possibility for other locations open.

While having manufacturing operations in the U.S. is beneficial for both the country and company, it also leaves automakers more exposed to tariffs between the U.S. and other countries. This is particularly highlighted by the U.S.-China trade dispute and the shifts in production by BMW and Volvo in response.

Volkswagen Jetta, a model representing Volkswagen's new product campaign in the U.S. Mercedes-Benz EQC, the first model of the EQ brand
Source: Mercedes-Benz


European OEMs

Company 2018 announcements
Volkswagen Investment into digital businesses and software
On August 2018, Volkswagen announced that it would invest approximately EUR 3.5 billion through 2025 to develop digital businesses and products including a cloud computing-based digital platform. This includes a new software operating system called vw.OS that will be in every Volkswagen-branded electric vehicle across the world starting in 2020. New Volkswagen electric vehicles will also feature a new electronic architecture designed for autonomous driving functions.
Investment to develop North American operations
At the 2018 North American International Auto Show, Volkswagen announced that it would invest more than USD 3.3 billion on the development and production of new models for its North American model lineup from 2018 through 2020. The investment includes USD 1.2 billion specifically invested in U.S. projects. This announcement was highlighted by the premiere of the Volkswagen Jetta at the show. Volkswagen aims to break even in operating profits in its North American operations by 2020.
Volkswagen confirms EV plant in North America, but not specific location
In September 2018, Volkswagen announced that it would open an electric vehicle plant in North America by 2022, though no specific location was confirmed. Volkswagen has speculated on its location in Chattanooga, Tennessee as being ideal, but has not yet made a final decision. The North American plant will be one of Volkswagen's 16 global production plants which will produce electric vehicles globally by 2022. Multiple news outlets have suggested that production versions of the ID Buzz and Crozz will be built in the U.S. Volkswagen will invest USD 40 billion during this time period for the development of the electric vehicle production plants, as well as electric vehicle, autonomous and mobility technologies.
Daimler Mercedes-Benz continues investment in Tuscaloosa
On October 5, 2018, Mercedes-Benz held a groundbreaking ceremony for a new battery plant at its facility in Tuscaloosa, Alabama. In 2017, Mercedes-Benz announced that it would invest USD 1 billion into its Tuscaloosa plant primarily for the production of electric SUVs under its EQ brand and the construction of a battery plant. The Tuscaloosa location will eventually serve as one of six production facilities for EQ models and one of eight production facilities for Mercedes-Benz’s battery network. The USD 1 billion investment announced in 2017 is expected to create more than 600 jobs.
BMW SUV production and price shifts
In July 2018, BMW said that it would move production of some of its SUV models from its plant in Spartanburg, South Carolina to China. The automaker signed an agreement with its partner in China, Brilliance Automotive Group Holdings, to increase its production in China to 520,000 units by 2019. BMW halted exports of the X3 from its Spartanburg plant, shifting production to its plants in Rosslyn, South Africa and Shenyang, China. BMW also announced that it would increase prices of SUVs exported from the U.S. to China as it could not fully absorb the costs from the tariff increase.

In early November 2018, BMW considered moving additional SUV production from Spartanburg to other locations, though no additional announcements were made to confirm or deny any changes. Since the tariffs were implemented, exports from the Spartanburg plant had decreased by 21.2%.
Consideration for second U.S. production plant
During the 2018 Los Angeles Auto Show, BMW’s CEO, Harald Kruger, said that BMW was considering the construction of a second U.S. manufacturing plant. The new plant would focus on the production of engines and transmissions for models made at the Spartanburg plant.
Volvo Charleston plant inauguration and change in strategy
On June 20, 2018, Volvo Cars inaugurated its first manufacturing plant in the U.S. at Charleston, South Carolina. Volvo’s Charleston plant began manufacturing the Volvo S60 sports sedan in the fall of 2018 and will begin manufacturing the XC90 SUV in 2021. Volvo invested a total of approximately USD 1.1 billion into the construction and development of the new plant. At the time of its inauguration, the Charleston plant was expected to create approximately 4,000 jobs, including 1,500 jobs by the end of 2018.

In November 2018, Volvo announced a number of changes due to the U.S.-China trade dispute. The company cancelled plans to export S60 models produced from Charleston to China. Instead, the S60 models produced at Charleston will be dedicated to the U.S. and European markets. Volvo will also stop imports of the XC60 SUV to the U.S. from China and will decrease the number of S90 sedan imports to the U.S. from China.

Due to the decrease in expected production at the Charleston plant compared to original projections, Volvo CEO Hakan Samuelsson noted that the plant has slowed its hiring rate. As such, the Charleston plant is not expected to reach the previously projected employment figures.

Source: Company press releases and various news outlets


Asian OEMs

As with their European counterparts, Asian automakers highlighted investments in their U.S. operations in 2018. These investments  focused on the implementation of advanced technology and market trends as well as the expansion of production in the U.S. For example, Toyota invested USD 500 million in Uber and will work with Uber in developing autonomous vehicles. The expansion of U.S. production facilities by OEMs such as Toyota, Honda, Nissan and Hyundai, serve as a precautionary measure to the possibility of additional automotive tariffs. Furthermore, Honda, in response to the U.S.-China trade dispute, shifted some of its production from the U.S. to China.

Toyota Corolla
Source: Toyota
Nissan Canton Mississippi plant
Source: Nissan


Asian OEMs

Company 2018 announcements
Toyota Investment in Blue Springs, Mississippi plant
On April 2018, Toyota announced that it would invest USD 170 million in its Blue Springs, Mississippi plant for the assembly of the new Toyota Corolla through the Toyota New Global Architecture (TNGA). The USD 170 million will be used to replace the plant’s production lines, enabling it to produce advanced vehicles more efficiently and improve its flexibility and adaptability. The investment is expected to create 400 jobs in one year and is part of Toyota’s plans to invest USD 10 billion in the U.S. through 2022.
Collaboration and investment with Uber
In August 2018, Toyota and Uber agreed to expand their collaboration to develop and commercialize autonomous ride-sharing as a mobility service. In order to accomplish this, Uber will integrate its self-driving technology with Toyota’s Guardian system into specially-built Toyota Sienna minivans which will then be deployed on Uber’s ride-sharing network. The Sienna models will utilize Toyota’s Mobility Services Platform (MSPF), an information infrastructure for connected vehicles. Toyota also announced that it would invest USD 500 million into Uber.
Honda Investment to expand Lincoln, Alabama plant
In July 2018, Honda announced that it would invest USD 54.8 million to expand its plant in Lincoln, Alabama. The expansion will add more than 50,000 square feet of area to the plant’s Line 2 operations and is expected to be completed in early 2021.
Nissan Investment in U.S. plants to support Altima production
On August 2018, Nissan announced that it had invested USD 170 million across its production plants in Smyrna, Tennessee and Canton, Mississippi to support production of the new 2019 Nissan Altima. The investment will provide new equipment for both plants including a new laser brazing system, an updated paint shop, and new calibration equipment.
Reduction in North American vehicle production
According to a Nikkei article in May 2018, Nissan said that it would reduce vehicle production in North America by up to 20% in a response to decreasing profitability in the region. The automaker said that this process was not based on any specific announcement, but was rather a shift in strategy from aggressive growth to sustained profitability.
Subaru Subaru to construct tech center in Michigan
In August 2018, Subaru announced plans to construct a tech center in Van Buren Township, Michigan. The automaker is expected to focus on autonomous vehicle technology at the new center. Subaru will use a USD 1.5 million grant from the state of Michigan to assist in the construction and development of the tech center, and invest USD 48.2 million itself. The tech center is expected to span between 150,000 and 200,000 square feet and will be open in 2022, creating up to 101 new jobs.
Hyundai-Kia Investment in Montgomery, Alabama plant
On May 2018, Hyundai announced that it would invest USD 388 million to construct a new plant in its Montgomery, Alabama location dedicated to manufacturing engine heads and supporting the production of Hyundai Sonata and Elantra models. The investment will result in a 260,000-square-foot building that will house engine head machining equipment. Construction on the new plant was completed in November 2018, with operations scheduled to begin in the middle of 2019.

Source: Company press releases and various news outlets


Joint OEM projects and agreements

The rapid progression of the automotive industry in the trends of electrification and autonomous vehicles combined with the unpredictability of the U.S. government's involvement, have led automakers to form partnerships and joint agreement between themselves. This has led to significant investments between OEMs for large projects. Honda will invest a total of USD 2.75 billion into Cruise, GM's self-driving vehicle technology organization to jointly develop autonomous vehicles. The two automakers also signed a joint agreement to cooperate on battery development. Other examples of joint projects include the construction of a USD 1.6 billion plant in Alabama between Toyota and Mazda, and partnership talks between Ford and Volkswagen.

Groundbreaking ceremony for Mazda Toyota joint plant in Huntsville, Alabama
Source: Mazda
Cruise autonomous test vehicle


Joint OEM projects and agreements

Company 2018 announcements
GM, Honda GM and Honda joint development on advanced battery components
In June 2018, GM and Honda announced that they would jointly develop advanced battery components, including battery cells and modules, for future battery-electric vehicles. The new battery system is expected to have higher energy density, smaller packaging and faster charging capabilities than currently available batteries. Based on the agreement, the two automakers will collaborate on developing a battery system based on GM’s next-generation design. Honda will source the modules for use on its vehicles from GM. The batteries are expected to be in electric vehicle models in the North American market.
Honda investment into Cruise and joint autonomous vehicle development
In October 2018, Honda announced that it would invest USD 2.75 billion into Cruise, GM’s autonomous unit. The USD 2.75 billion investment consists of a USD 750 million equity investment into Cruise, and a USD 2 billion investment across 12 years for joint projects. Honda will work with Cruise and GM to develop a high-volume autonomous vehicle that can be used in a variety of scenarios. The three companies will also explore potential opportunities for the large-scale deployment of autonomous vehicles.
Mazda, Toyota Toyota and Mazda invest into construction of Huntsville, Alabama plant
In January 2018, Toyota and Mazda announced that they would construct their joint venture manufacturing plant in Huntsville, Alabama. Each automaker will invest USD 800 million into the new plant. The new plant is expected to have an annual production capacity of 300,000 models, which will be divided evenly between a yet unrevealed crossover from Mazda, and the Toyota Corolla. Construction on the plant began in November 2018. The plant is expected to begin operations in 2021 and will create up to 4,000 jobs.
Ford, Volkswagen Speculation on partnership discussions between Ford and Volkswagen
Throughout much of the second half of 2018, Ford and Volkswagen have been holding global partnership discussions in regards to various joint development projects. Speculation about the scope of partnership between the two automakers ranged across a variety of possibilities, including Volkswagen’s use of Ford’s production facilities in the U.S., joint model development across various vehicle segments, and even a full merger between the two automakers.

In November 2018, Volkswagen CEO Herbert Diess confirmed that Volkswagen would partner with Ford in developing commercial vehicles, which would include the development and integration of electric and autonomous vehicle technologies. Diess also said that Volkswagen “identified other potential cooperation with Ford outside of commercial vehicles.” However, Diess at the time denied the potential of a full merger.

According to sources at one of the automakers, CNBC reported that Volkswagen and Ford could announce an agreement in January 2019 with specific details of the partnership between the two companies.

Source: Company press releases and various news outlets


Sales forecast by LMC Automotive: U.S. light vehicle sales to be lower than 17 million units after 2019

According to LMC Automotive's forecast, U.S. light vehicle sales volume is expected to be lower than 17 million units after 2019.

U.S. yearly light vehicle sales forecast
Source: LMC Automotive, "Global Automotive Sales Forecast (Q3 2018)"

Although not part of our base scenario, a trade war could lower sales as well. A new trade agreement between the US, Mexico and Canada requires North American - sourced content to increase to 75% from 62.5%, 40% of a vehicle's assembly must be at a minimum labor rate of USD 16 per hour. Vehicles produced in the region that do not meet these requirements would face a 2.5% tariff. However, for these rules to be implemented, the agreement needs congressional approval in all three countries. We forecast sales of Mexican vehicles to increase by 9% this year and represent 14% of sales. On the other hand, we expect sales of Canadian models to decline by 4%.

On a different front, the trade war with China has been escalating, and the Buick Envision compact SUV is in jeopardy. Ford has scrapped plans to import the Focus Compact Car from China, thus exiting the car market completely. Volvo, meanwhile, has announced plans to switch the XC60 Compact premium SUV back to Europe, instead of importing it from China.

Regardless of a change in tariffs, we project volume contractions for 2019 and 2020, with the culmination of the pressure from 2018 - interest rates and used vehicle prices. Also, economic growth is anticipated to slow down in 2020. Yet, sales are expected to start rebounding after 2020, as more of Generation Y reaches the “sweet‐spot” for a first vehicle purchase and tech savvy consumers look for the latest trends in vehicles.

We expect the rollout of autonomous vehicles to start at selected markets early next decade, with initial launch for testing. At first, the impact would be positive, as they will possibly have low penetration and consumers are likely to keep their vehicles until they become comfortable with the new technology. The major impact is forecast beyond 2025 and could cut sales by 2030 by as much as 500k units. We estimate that vans would be one of the most affected body type because we expect autonomous vehicles to be used mainly as non‐stop delivery vehicles.


U.S. light vehicle sales forecast by make


2015 2016 2017 2018 2019 2020 2021
Total   17,446,906 17,515,866 17,189,410 17,197,462 16,958,654 16,648,215 16,785,563
General Motors Group  Chevrolet 2,188,156 2,169,958 2,147,854 2,107,226 2,035,985 1,928,055 1,910,013
GMC 558,697 546,628 560,240 524,941 532,191 542,585 543,165
Cadillac 175,267 170,006 156,440 153,224 154,196 168,525 184,581
Buick 155,506 143,913 125,512 100,577 84,301 73,982 83,715
Opel 0 7,153 5,684 16,022 12,661 10,284 8,356
Holden 4,740 4,034 4,748 86 0 0 0
General Motors Group sub-total 3,082,366 3,041,692 3,000,478 2,902,076 2,819,334 2,723,431 2,729,830
Ford Group  Ford 2,474,924 2,455,710 2,424,530 2,331,207 2,216,918 2,238,500 2,228,034
Lincoln 101,227 111,724 111,159 99,929 101,682 100,846 82,961
Ford Group sub-total 2,576,151 2,567,434 2,535,689 2,431,136 2,318,600 2,339,346 2,310,995
Toyota Group  Toyota 2,114,631 2,082,130 2,129,118 2,129,897 2,020,099 1,966,525 1,956,768
Lexus 344,601 331,228 305,129 285,003 306,647 295,795 310,133
Scion 40,081 36,229 264 2 0 0 0
Toyota Group sub-total 2,499,313 2,449,587 2,434,511 2,414,902 2,326,746 2,262,320 2,266,901
Fiat Chrysler Automobiles  Jeep 865,028 926,348 828,522 1,002,734 1,020,067 1,034,891 1,077,847
Ram 451,116 485,621 492,668 491,259 512,709 558,116 570,153
Chrysler 328,068 231,980 188,545 167,970 179,899 203,925 212,403
Dodge 517,153 506,847 446,996 471,993 442,328 166,819 123,355
Fiat 81,879 89,220 82,559 68,098 60,827 56,653 55,120
Alfa Romeo 663 516 12,031 24,469 22,159 21,689 34,140
Maserati 11,700 12,534 14,046 11,227 9,223 8,322 15,856
Fiat Chrysler Automobiles sub-total 2,255,607 2,253,066 2,065,367 2,237,750 2,247,212 2,050,415 2,088,874
Renault-Nissan-Mitsubishi  Nissan 1,351,420 1,426,130 1,440,051 1,334,122 1,314,308 1,320,796 1,356,234
Mitsubishi 95,342 96,267 103,686 124,767 112,779 125,501 130,298
Infiniti 133,498 138,293 153,415 135,489 122,191 132,745 126,296
Renault-Nissan-Mitsubishi sub-total 1,580,260 1,660,690 1,697,152 1,594,378 1,549,278 1,579,042 1,612,828
Honda Group  Honda 1,409,385 1,476,860 1,487,408 1,480,781 1,400,529 1,333,146 1,336,532
Acura 177,165 161,091 154,021 159,532 155,153 152,738 153,947
Honda Group sub-total 1,586,550 1,637,951 1,641,429 1,640,313 1,555,682 1,485,884 1,490,479
Hyundai Group  Hyundai 761,710 768,057 664,943 665,746 682,534 690,984 720,963
Kia 625,818 647,598 589,668 622,844 650,269 632,700 644,789
Genesis 0 6,948 20,612 16,867 48,215 59,717 62,877
Hyundai Group sub-total 1,387,528 1,422,603 1,275,223 1,305,457 1,381,018 1,383,401 1,428,629
Subaru Corporation Subaru 582,675 615,126 647,956 688,721 706,106 719,639 704,309
Subaru Corporation sub-total 582,675 615,126 647,956 688,721 706,106 719,639 704,309
Volkswagen Group  Volkswagen 349,440 322,948 339,676 356,815 352,470 343,789 358,475
Audi 202,202 210,213 226,915 229,598 240,813 234,095 226,241
Porsche 51,756 54,280 55,420 57,797 65,538 69,486 66,141
Bentley 2,686 2,581 2,405 2,637 3,226 2,822 2,955
Lamborghini 1,009 963 1,095 1,411 1,671 1,454 1,221
Volkswagen Group sub-total 607,093 590,985 625,511 648,258 663,718 651,646 655,033
Daimler Group  Mercedes-Benz 372,977 374,282 372,196 327,418 344,280 375,305 390,097
Smart 7,484 6,211 3,071 1,259 856 685 537
Daimler Group sub-total 380,461 380,493 375,267 328,677 345,136 375,990 390,634
BMW Group  BMW 346,023 313,174 305,685 299,543 318,353 340,011 328,459
MINI 58,514 52,030 47,102 46,523 42,423 41,240 37,240
Rolls-Royce 1,078 1,200 1,175 1,120 1,383 1,304 867
BMW Group sub-total 405,615 366,404 353,962 347,186 362,159 382,555 366,566
Mazda Motors Mazda 319,184 297,773 289,470 314,012 292,666 287,920 296,475
Mazda Motors sub-total 319,184 297,773 289,470 314,012 292,666 287,920 296,475
Tesla Motors Tesla 25,616 40,515 47,275 129,861 157,900 162,724 189,267
Tesla Motors sub-total 25,616 40,515 47,275 129,861 157,900 162,724 189,267
Geely Group  Volvo 69,791 82,593 81,507 98,752 113,293 111,843 102,493
LYNK & CO 0 0 0 0 3,860 12,853 17,326
Polestar 0 0 0 0 0 1,883 4,221
Lotus 147 47 144 119 102 87 189
Geely Group sub-total 69,938 82,640 81,651 98,871 117,255 126,666 124,229
Tata Group  Land Rover 70,582 73,861 74,739 84,088 78,489 74,195 72,786
Jaguar 14,466 31,243 39,594 28,361 29,874 28,122 24,812
Tata Group sub-total 85,048 105,104 114,333 112,449 108,363 102,317 97,598
Other  SF Motors 0 0 0 0 724 4,061 6,738
Rivian 0 0 0 0 0 516 6,169
Lucid 0 0 0 0 0 580 4,571
Workhorse 0 0 0 0 2,067 3,119 4,111
Karma 0 0 21 100 98 405 3,056
Ferrari 2,258 2,417 2,749 1,946 2,507 1,982 2,539
Faraday Future 0 0 0 0 0 1,783 2,262
Aston Martin 821 633 849 939 1,640 2,063 1,760
Dyson 0 0 0 0 0 0 1,387
McLaren 422 753 517 430 445 410 323
Other sub-total 3,501 3,803 4,136 3,415 7,481 14,919 32,916

Source: LMC Automotive "Global Automotive Sales Forecast (Quarter 3, 2018)"
(Note) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
For more detailed information or inquiries about forecast data, please contact LMC Automotive.


U.S., GM, Ford, FCA, VW, Daimler, Mercedes-Benz, BMW, Volvo, Toyota, Honda, Nissan, Subaru, Hyundai, Kia, Mazda

<Automobile Industry Portal MarkLines>