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It Is Industry Trend Season!

'Tis the season for bloggers of all industries and topics to write about expected trends for the New Year (or to comment on the trends that just happened in the last year). Here at the Dashboard we like to look forward, as though we are driving a vehicle into the future.  So here are the top three trends that we expect to see in the automotive industry in 2020.  Some trends have been written about extensively and will obviously continue. North American sales will fall in 2020.  Electrification of the industry will not slow down (and will likely speed up).  Here are some other trends to be on the lookout for.

Sedans Continue to Decline

SUVs, CUVs and pickups have been eating sedans for lunch for some time now. There is really no reason to think that this trend is going to slow down. We have every expectation that sedans will slowly become niche vehicles. Because, really, what is a CUV if not a different kind of sedan?  Consumers in North America are simply not as interested in their parents' four door sedan.  This is not a new trend at all as it has been written about for some time, such as in this Wall Street Journal article from 2018.  Not everyone agrees of course.  Bloomberg wrote a few months ago about Nissan betting on sedans.  But, all it takes is going to a parking lot, even in a major city, and seeing parking stalls built for sedans overflowing with SUVs, CUVs and pickups to know that the sedan is clinging to life.

Trade Keeps Everyone on Edge

It is no secret that businesses like predictability and loathe volatility. In the past year, we have written numerous articles about trade issues, trade wars, trade agreements, and the uncertainty associated with them. Just the other day we wrote about the U.S.-Mexico-Canada Agreement.  In November 2019 pretty much every presenter at an OESA panel talked about trade.  Even with the election coming in November 2020, there is no reason to think that trade between the U.S. and its North American partners, the U.S. and China, the U.S. and the EU, and perhaps (or even likely) the U.S. and Great Britain will not impact the Automotive Industry. How any of those trade issues are resolved or evolve in the next 12 months is unknown.  Such unknowns will definitely impact the Automotive Industry. In particular, it is difficult to price vehicles, choose where to invest in capital both large and small and determine with whom to partner around the world.

Transport Diversification Will Continue

Long gone are the days of having limited ways to get around. Not so long ago, a person could own/lease a vehicle, rent a vehicle, or take public transportation.  Such limited options almost seem quaint.  Want a vehicle on demand?  You can do that now.  Want a subscription for a vehicle?  Yes, there is that option as well.  Ride sharing? Check. Electric scooter to get around?  Done!  As we wrote about, transportation and autos are on their way out, mobility is on the ascent. Fewer and fewer people own a vehicle and that trend seems poised to continue in North America in 2020.

© 2020 Foley & Lardner LLP

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About this Author

Legal, Business, Jeffrey Soble, Class Action Attorney, FOley Law FIrm
Partner

Mr. Soble’s practice focuses on class action defense, post-transaction disputes, products liability, construction losses, and general contract and tort law. He is experienced in supply chain management and contract enforcement, in particular with limited or sole-source suppliers and just-in-time suppliers. He has further experience in the litigation of insurance coverage claims. Mr. Soble is a member of the Business Litigation & Dispute Resolution Practice and former co-chair of the Automotive Industry Team. He is the co-editor of Dashboard Insights, the Automotive...

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