The car business is big business—very big business. And charting the changes from year to year can be a little tough.
But when investment banks get involved, their goal is to be absolutely sure of what’s on the horizon to keep investors interested in the right companies, referencing knowledge of future products and the market overall. Heavy hitter Bank of America and Merrill Lynch did some homework, and they think Ford’s gonna be the one to beat in the U.S.
In a report called “Car Wars,” which they publish annually, the banks say that the 2012 to 2016 prospectus for Ford shows 106 percent of their products being revised or replaced in the near term. How can there be more than 100 percent? Easy. It means Ford’s adding some new, not-yet-seen vehicles to its lineups including the 2014 Lincoln MKD small crossover, 2014 MKC small sedan, and what they’re calling the 2016 Lincoln Aviator large crossover that will likely replace the Navigator or MKT. Filling in the gaps will be the new 2013 Ford C-Max, Transit commercial van, and redesigned versions of almost all the current Ford cars but the Focus, Explorer, and Flex.
The investment analysts say Ford will have one of the youngest model lineups on the market along with Toyota, Nissan, Honda, and the Korean brands. But the Korean brands will be coming out with fewer and fewer new products, according to the information used by the investment firms, suggesting their share of the market will actually decline. And the market will be tightening up with redesigns and refreshes driving new vehicle sales. Meaning the old expression “He who has the most toys wins” will have a certain amount of validity to it in the next few years.
Looking at the report with a certain amount of skepticism, it’s hard to take it all as gospel. Save for another dip in the recession, all indications point to the auto market rebounding to pre-2008 levels in the not-too-distant future, but with a caveat: Customers are going to want more for their dollars, suggesting the Korean brands aren’t as bad off as Merrill Lynch and BoA are reporting. They may not maintain market share, but if they don’t, it’ll only be because the market is growing at a faster rate than their sales.
Additionally, most of the product rollouts the investment firms are mentioning are speculative. There are some obvious omissions on the list of redesigned (2014 Kia Sedona) and some pretty obvious additions that may take a little more than a spoonful of sugar to go down, such as Volkswagen bringing its pint-sized Polo to the U.S. next year. We’re sure their insiders parsed through PR jargon like the rest of us to get some of their information, but a good bit of it seems to be prodded along in a bubble of enthusiasm—sort of like BoA’s outlook on derivatives of subprime loans back in the 2000s.
It’s fun to look at, and we think there’s a modicum of validity that demonstrates the notion of a resurrection of the American Big Three in the U.S. But we get that from using some common sense—not by trying to establish something that isn’t there. But then again, investment firms have historically been very, very good at the latter.
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Source: Automotive News