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'Car Wars:' A peek into the automotive future

'Car Wars:' A peek into the automotive future

2009年07月28日

????A new Merrill Lynch report sees big gains for Hyundai and Ford; slowdowns at GM, Chrysler.

????By Alex Taylor III

????Most forecasts of future performance in the auto industry tend to be variations of tea-leaf reading. Analysts take a look at what companies are planning in the way of future models, make a guess about sales volumes, and lay that over a macroeconomic outlook. The results are compromised by too many hard-to-quantify variables.

????However, one study, Merrill Lynch's "Car Wars," which has been produced annually for a decade, has proved remarkably accurate in forecasting future trends.

????Its premise is a simple one: The percentage of a manufacturer's sales volume to be replaced with new models drives market share, profitability, and stock price. In other words, new models equal success. Manufacturers with the youngest showroom age relative to the industry will perform the best.

????The results have been consistent. For at least ten years, General Motors, Ford (F, Fortune 500), and Chrysler have been slower to renew their fleet, and they have lost the most share. Japanese and Korean manufacturers have more rapidly turned over their fleets and gained the most share.

????The latest edition of Car Wars that looks at new models due in 2010 through 2013 tells a similar story -- with one glaring exception. Once again, the Asians are at the head of the pack. Hyundai and Kia lead in new model replacement, with Honda in third place, Toyota (TM) in fourth, and Nissan ranked fifth.

????The big surprise is the company in second place: Ford. It gained three-tenths of a point of market share in the first half of 2009 to 16.1%, and Merrill Lynch expects it to build on those gains because of a burst of new models.

????Ford is adding the small Fiesta, along with the Focus, to its lineup in 2010 and a new crossover known as the C-Max in the 2012 model year. A long-overdue replacement for the Ford Ranger small pickup is also coming in 2012.

????The news isn't so good at GM and Chrysler. GM's lagging rate of model renewal means that market share losses "are likely to be greater than expected and more severe" this year and next, according to Merrill Lynch. It believes that GM's 18%-19% market share target is too optimistic, and that a more realistic range is 15% to 16%.

????Despite GM's burst of new models like the Cruze and the Volt, it is replacing only 9% of its volume in the 2010 model year and 12% in 2011. The Koreans, by comparison, are replacing 15% of their volume next year and a stunning 44% in 2011.

????If GM looks like it's lagging, then Chrysler's condition looks perilous. It is replacing only 5% of its volume next year, 9% in 2011, and 3% in 2012. Merrill Lynch calls this "an ominous sign," adding: "This is a result of a lack of investment by Chrysler's last two owners [Daimler and Cerberus] and the dubious potential for Fiat products in the U.S. market."

????Merrill's bottom line: "We anticipate that Chrysler will be roughly half its current size in a few years creating room for other automakers to gain market share."

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