Lang Aftermarket iReport: Shrinking ‘new domestic vehicle share’ expected
“General Motors and Ford have announced that they will significantly reduce the number of car models they sell in the U.S. during the next few years. Fiat Chrysler Automobiles (FCA) has already cut back its car offerings.
“This near exit from the new U.S. car market by the Big Three will accelerate the loss of new vehicle sales share by domestic nameplates.”
– Jim Lang, publisher, Lang Aftermarket iReport
Changing New Vehicle Market
A number of important changes have taken place in the size and mix of the new light vehicle market in the U.S. between 2013 and 2018.
The 12% increase in 2018 vehicle sales compared to 2013 was not generated equally by cars and light trucks.
Shrinking Car Sales in the U.S.
Despite a 1.7 million surge in 2018 new light vehicle sales compared to 2013, car volume was significantly lower in 2018 than five years earlier.
All of the new light vehicle sales growth over this five-year span (2013 to 2018) was generated by light trucks, which climbed more than 51% in annual sales.
At the same time, cars fell from nearly 50% of the 2013 new light vehicle market in the U.S to 32% of the 2018 market.
Domestic and Foreign Nameplate Sales Share
Foreign nameplates (Imports and Transplants) climbed from 68% to over 75% of the declining new car market in the U.S.
Despite their new car share increase, foreign nameplates fell in 2018 car sales compared to 2013.
This foreign nameplate car sales decline was offset by a rise in the foreign nameplate share of the surging light truck market.
General Motors and Ford Cut Car Models Domestics
By the end of 2020, Ford will offer only two car models in the U.S. market: Mustang (built in the U.S.) and Afta (produced in China).
By 2021, General Motors will have dumped all but three car models in its U.S. sales mix.
Fiat Chrysler Automobiles (FCA) has already reduced its car offerings in the U.S.
Projected Sales Results
“Lang Marketing expects that actions by Ford and GM could reduce domestic nameplate car annual sales in the U.S. by more than 350,000 during 2023 compared to 2018.
While some of this lost domestic nameplate car volume could be counterbalanced by an increase in domestic nameplate light truck sales, domestic nameplate light truck volume will face strong competition from foreign nameplates, which have managed to steadily increase their new light truck sales share during the past five years.
Sales Share Change
Lang Marketing expects that foreign nameplate light vehicle sales share in the U.S. will climb from 55% of the 2018 market to over 58% by 2023.
This will represent more than a 70% increase since 2000, when foreign nameplates accounted for only 34% of the new car and light truck market in the U.S.
Market Implications
The surging foreign nameplate share of new light vehicle volume will lead to a growing majority of foreign nameplates in the repair-age sweet-spot in the coming years, a factor that will help boost the size of the foreign nameplate aftermarket.
Six Major Takeaways
- Ford and General Motors plan to dramatically reduce the number of car models they sell in the U.S. over the next few years.
- Cars fell from nearly half new light vehicle sales in the U.S. during 2013 to only 32% of the 2018 market.
- Foreign nameplates have climbed from two-thirds to over three-quarters of new car sales in the U.S. between 2013 and 2018.
- Lang Marketing projects that foreign nameplates will increase from 55% of the 2018 new vehicle market to more than 58% of light vehicles sold in the U.S. by 2023.
- Rising foreign nameplate vehicle sales along with the growth of foreign nameplates in the repair-age sweet-spot will help accelerate the rapid growth of the foreign nameplate aftermarket in the U.S.
- By 2020, foreign nameplates will account for more than half of the total light vehicle aftermarket product volume in the U.S.
Copyright 2019 by Lang Marketing Resources, Inc.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.
