A Ten Year Strategic Outlook for the North American Automotive Market
£1,978
Description
Report insight
The North American light vehicle market is on the verge of confronting significant changes which will lead the industry to a very precarious condition. The once stable and evolving industry is now getting ready for a major overhaul which can simultaneously create threats and opportunities for the regional automakers. The US president Donald Trump made a number of pledges during his election campaigns related to trade and manufacturing. Some of his rhetoric was directly related to the automotive sector which included 35% tariffs on imported vehicles, bringing jobs back to the US, border adjustment tax and severe consequences for the auto investors outside the US.
Initially, the epicentre of automotive trade war rhetoric was limited to Mexico, though later on Mr. Trump also lambasted against Germany and Japan blaming for currency undervaluation. Before taking the oath, it appeared that his elections pledges would not materialise; now it is the inverse. So, taking the underlying premise of his rhetoric, the question is how much is achievable without disturbing the very fabric of the automotive industry. Unlike, the construction industry (where Mr Trump has quite extensive experience), the automotive industry is highly global and integrated, which depends on a very convoluted supply chain structure. Most of the auto parts cross the US borders few times before ending up in a Mexican/Canadian assembly plant. The same apply to the US car makers where a sheer portion of the auto parts is imported, which would also defy the government “Buy America” rule in strict terms.
The new US administration seems committed to supporting the country automotive industry, likely through protectionist measures, incentives and cajoling. This can help increasing the capacity utilisation domestically and lure further investment announcements. However, any non-market driven investment decisions by OEMs can bear significant consequences in the medium to long term. There would likely be some additional increment in the US production in the short term on the back of curbing imports, which may be at the expense of high marginal costs and distortions in the regional automotive supply chain.
Mexico sources most auto parts and automotive steel from the US, so any changes in duties on either side can impact the regional supply chain. Therefore, revising NAFTA through imposing tariffs on Mexico would take its toll on the automotive industry, regardless of whether these new tariffs are agreed mutually between the members’ states. We understand that Mexican vehicles’ exports to the US are dominated by B and C category cars, where the profit margins are already thin. So, any imposition of tariffs or taxes can directly be passed to end users. Moreover, there is also less scope for a significant rise in production of these categories cars in the US due to limited capacity. Buyers would also have less room for substituting B and C cars with high-end vehicles such as SUVs due to constrained consumer surplus. Consequently, there would be a substantial loss of sales and delay in buying decisions.
Commodity Inside ascertains that the overall US production utilisation is currently at high levels. So, beyond a certain threshold, any additional demand created due to trade diversion would be hard to meet without additional investment domestically. Building new assembly plants or relocation would not be feasible in the short run, and any such attempts would be untenable without understanding the long term dynamics.
Why this report is unique and a must read for the light vehicle market and automotive industry as a whole?
A Ten Year Strategic Outlook for the North American Automotive Market is a timely and valuable resource necessary for examining the state of the automotive industry in North America and its future direction. We have employed a very sophisticated and robust approach to assessing the automotive market by taking into account various demand and supply dynamics as well as various forecast scenarios based on the changes in NAFTA. The report covers the following key aspects:
- How will the light vehicle market perform over the next ten years in North America in the absence of protectionist measures by the US government?
- What will be the various scenarios for the regional demand and supply if the new US administration attempt to restrict imports from Mexico?
- How the import tax or tariff will affect vehicle prices and capacity utilisations?
- How can Mexico deal with the changing landscape and what options are available under Trumponomics?
- How OEMs outside North America will respond to any changes in the US stance towards Mexico?
- How the cost structure in the automotive industry will change in the wake of NAFTA revisions?
- Detailed analysis on demand, production and capacity dynamics in the
- North American light vehicle market under normal and alternative scenarios.
- Detailed discussions on vehicle trade restrictions and consequences.
- Analysis of the present and future performance of the North American Market.
Why should you read this report?
A Ten Year Strategic Outlook for the North American Automotive Market provides you with the following in-depth analysis:
- Analysis of production, capacity, trade and demand of the North American light vehicle market.
- Coverage of automotive trade among NAFTA members.
- An overview of potential investment in the regional automotive industry.
- Forecast scenarios for the regional automotive industry under normal and protectionist measures.
- Trumponomics and the automotive industry.
- Detailed discussions about the US Administration’ stance on the automotive industry in North America and its implications.
- Analysis of potential tariffs and border tax on B and C cars markets in the context of NAFTA.
- 51 tables, figures and charts.
- All supportive data provided in excel.
Who should buy this report?
- Conventional car manufacturers
- Electric vehicle manufacturers
- Hybrid and Plug-in hybrid vehicles manufacturers
- Component manufacturers
- Suppliers of materials to automotive
- Automotive technology vendors
- Mobility service providers
- Utility companies
- Financial institutions
- Government and policy makers
Table of Contents
Chapter 1 – Executive Summary
1.1 Developments in North American automotive industry
1.2 Key conclusions and recommendations
1.3 Methodology
Chapter 2 – Supply
2.1 Production overview
2.2 Capacity utilisation
2.3 Cost structure
2.4 Automotive investments
Chapter 3 -Demand
3.1 Regional sales overview
Chapter 4 – Trade
4.1 Trade agreements
4.2 NAFTA and the automotive industry
4.3 Automotive trade in the NAFTA region
Chapter 5 – North American Automotive Market Outlook
5.1 Production
5.2 Demand
5.3 Trade
Chapter 6 –The North American Automotive Industry under Trumponomics
6.1 Impact of the US protectionists measures against Mexico thorough tariffs or taxes
6.1.1 Regional production
6.1.2 Regional prices
6.1.3 Regional sales
6.1.4 Global spillover
Appendix A – OEM Assembly and Production Plants in North America
List of Tables
Table 2.1 North America light vehicle production 2005-2016 (million units, % change)
Table 2.2 The world top 10 light vehicle manufacturing countries by market share 2010-2015 (%)
Table 2.3 North American auto production, capacity and capacity utilisation by country 2005-2016 (million units, %)
Table 2.4 North American automakers’ total investments by country 2000-2015 ($ millions)
Table 2.5 Production by major OEMs 2011-2016 (‘000 units)
Table 3.1 North America light vehicle sales by country 2010-2016 (million units, %)
Table 3.2 North America light vehicle sales by country 2010-2016 ($ billions, %)
Table 3.3 Canadian light vehicle sales by brand 2011-2016 (units)
Table 3.4 Mexican light vehicle sales by brand
Table 3.5 The US light vehicle sales by brand 2011-2016 (units)
Table 4.1 Light vehicles exports matrix in North America by country 2011-2016 (million units)
Table 4.2 Light vehicles exports matrix in North America by country 2011-2016 ($ millions)
Table 4.3 Light vehicles imports matrix in North America by country 2011-2016 (million units)
Table 4.4 Light vehicles imports matrix in North America by country 2011-2016 ($ millions)
Table 4.5 The US light vehicle exports to top 10 countries 2011-2016 (million units)
Table 4.6 The US light vehicle imports from the top 10 countries 2011-2016 ($ millions)
Table 5.1 North America light vehicles production by country under business as usual scenario 2016-2027 (million units, %)
Table 5.2 North America light vehicles production capacity by country under business as usual scenario 2016-2027 (million units)
Table 5.3 North America light vehicles sales by country under business as usual scenario 2016-2027 (million units, % change)
Table 5.4 North America light vehicles net exports by country under business as usual scenario 2016-2027 (million units)
Table 5.5 North America light vehicles net exports by country under business as usual scenario 2016-2027 ($ billions)
Table 6.1 Production scenarios by country under various tariffs and taxes 2016-2026 (units)
Table 6.2 Capacity and capacity utilisation under various scenarios by country 2016-2026 (units)
Table 6.3 Prices scenarios by country under various tariffs and taxes 2016-2026 ($)
Table 6.4 Sales scenarios by country under various tariff and taxes 2016-2026 (units)
Table A.1 OEM vehicle assembly plants in North America by location and product range
Table A.2 Other OEM plants in North America
List of Figures
Figure 2.1 North American light vehicle production 2005-2016 (million units)
Figure 2.2 North American production and production capacity by country 2005-2016 (million units)
Figure 2.3 North American automakers’ total investments by country 2000-2015 ($ millions)
Figure 2.4 Production by major OEMs 2011-2016 (‘000 units)
Figure 3.1 North American light vehicle sales by country 2010-2016 (million units)
Figure 3.2 North American light vehicle sales by country 2010-2016 ($ billions)
Figure 4.1 North American light vehicle exports by country to the world 2008-2016 (million units)
Figure 4.2 North American light vehicle imports by country to the market 2008-2016 (million units)
Figure 5.1 North America light vehicles production by country under business as usual scenario 2016-2027 (million units, %)
Figure 5.2 North America light vehicles production capacity by country under business as usual scenario 2016-2027 (million units)
Figure 5.3 North America light vehicles sales by country under business as usual scenario 2016-2027 (million units, % change)
Figure 5.4 North America light vehicles production by country under business as usual scenario 2016-2027 (million units)
Figure 5.5 North America light vehicles net exports by country under business as usual scenario 2016-2027 ($ billions)
Figure 5.6 North America light vehicles net exports by country under business as usual scenario 2016-2027 (million units)
Figure 6.1 Expected production by major OEMs 2016-2022 (‘000 units)
List of Charts
Chart 2.1 Cost structure of light vehicles by country in North America 2016 ($, %)
Chart 2.2 New automotive plant investment announcements in North America by country, company, investment amount and start dates
Chart 4.1 List of Canadian free trade agreements
Chart 4.2 List of Mexican free trade agreements
Chart 4.3 List of the US free trade agreements
Chart 6.1 The US auto parts imports by top five countries in 2015
Chart 6.2 North America sales vulnerability by major OEM
Chart 6.3 Upside and downside risks specifically related to the NAFTA auto industry under protectionism
Chart 6.4 Upside and downside risks for the NAFTA auto industry facing from elsewhere under protectionism
ADDITIONAL INFORMATION
| Publication date | February 2017 |
|---|---|
| Number of pages | 60 |
| Report format | PDF with supportive data in excel |
| Single user licence | £1,978 (Single user) |
| Departmental licence | £3,495 (2-5 users) |
| Global licence | £5,829 (6 and over users) |
| Hard copy of the report | A hard copy can be purchased for an additional £250/copy |