DETROIT — According to an annual study by AlixPartners, the global business-advisory firm, the North American auto industry’s performance has stood out of late compared with that of other industries. That status, they continued, is threatened by lingering low employment in the economy, fast-rising overhead costs at automakers and suppliers alike, and big generational demographic shifts in which Millenials and other young people care less about cars than past generations while aging Baby Boomers simply have less reason to drive.
As a result of these and other factors, the 2012 AlixPartners Automotive Outlook predicts there are 5 million fewer potential car-buyers today than five years ago, that U.S. auto sales will be a conservative 14.3 million units this year and that sales in the U.S. and Canada are not likely to exceed 16 million through at least 2015.
“It’s long been a truism that if people don’t have jobs, they don’t buy cars,” said John Hoffecker, managing director at AlixPartners and head of the firm’s automotive practice. Given lingering low employment in this country, plus the fact we estimate that in the last decade incentives ‘pulled ahead’ more than 18 million units of sales, we see true, underlying demand being a big issue for the industry going forward. Successful companies will be those that stop the old bad habits of yesteryear from creeping back into their systems while making aggressive, well-informed investments in product — all the while recognizing that they’re unlikely to get a whole lot of help from the economy.”
For more information visit www.alixpartners.com.