Saturday, February 4, 2023

The pandemic has ended the auto industry’s age-old battle for market share

The pandemic could end the car industry’s old and brutal battle for market share.

Before COVID-19, car makers used to consider Market share as the key to your success,

GM and Ford dominate in the United States. GM held the top spot from 1931 until 2021, when Toyota regained the crown. However, GM reclaimed its title last year, thanks to its growth in key market segments such as trucks and SUVs, increasing its share in electric vehicles, etc.

Coronavirus changed things. Automakers managed to drive sales and profits even in a tough, pandemic market filled with price increases and inventory battles for new and used vehicles. it meant They didn’t need so many cars to make money,

Now, it seems, car companies are reevaluate your perspective,

“Market share comes at a cost,” Kristin Dziczek, a policy advisor at the Federal Reserve Bank of Chicago, said at the firm’s annual Auto Insight Symposium in Detroit. “A huge cost.”

Many companies, such as Ford, GM, Stellantis (parent of Fiat Chrysler and the French PSA group) and others, Will never reach market share level again Before the pandemic, according to Haig Stoddard, principal forecast analyst at Wards Intelligence.

Without a doubt, these companies have a healthy level of starting inventory at their dealerships compared to the last 2 years. But industry executives have said they will not go back to the 60-day supply of vehicles that used to be relatively standard.

low volume may mean sell fewer vehicles And, probably, that their market share is low.

Falling market share doesn’t worry GM and Ford

However, longtime industry leaders don’t seem too concerned about the growing market share of Hyundai and Tesla (with 10.6% and 3.8%, respectively, in 2022, according to Kelley Blue Book), which could mean that the market The battle for the stake is over.

Automakers like GM and Ford remain profitable, even with a shrinking market share, They had 16.3% and 13.3% of the market, respectively, in 2022, and Toyota 15.2%.

Since consumers have indicated they will wait – and pay more – for vehicles even they don’t necessarily have what they want, these car companies know they need to entice car buyers with discounts. No need to fight or encourage.

“GM and Ford in particular, and Stellantis as well, prefer not to give discounts at the end of the summer and at the end of the year,” Stoddard said at the symposium.

As long as the focus on Ford and GM continues vehicles that make moneyIt won’t be that bad for them if they don’t recover, although they still need to focus on vehicles that are profitable for them.

For car buyers, this dynamic could impact some of the annual sales, incentives and low-cost vehicles people use.

“There is a growing focus on high return vehicles,” Stoddard explains. “The plan is, at least strategically, to stay away from that bottom stuff.”

Nation World News Desk
Nation World News Desk
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