Automotive Industry Predictions for 2010

GM concept electric car.Armstrong’s Predictions for Automotive Industry 2010 to 2011

Correspondent Derek Armstrong

No one, short of a gifted seer, could have seen the automotive industry meltdown, least of all automotive analysts. The variables go well beyond simple auto industry projections.

Since I do not believe low fuel prices will last much beyond 2009, and considering the fate of automotive companies is already set for 2009, I thought I’d take a stab at predicting 2010. Already, American auto makers are seeing the lowered oil price as the savior, and history has proven that auto consumers have short memories on pump prices. 2009 will be characterized by survival tactics, more of the same, and secret hopes among crumbling auto giants that consumers will forget long enough to buy more of the gas-guzzlers in the pipeline or on the lots.

2010 will certainly be the first year car companies strike back, albeit with products planned from a different reality. Most promising, perhaps, is the GM Volt and new hybrids, although delays in some model revisions for 2009 also signal a reduced ability to develop new products. The 2010 revised Toyota Prius, originally scheduled for a March 09 launch, was moved back in the face of economic challenges.

Will creaking two ton designs still move in 2009 in the face of suddenly lower fuel prices? Some will, but not in the numbers the big three hope. 2010 will be the first year of substantive change, likely shaped by a downsized and merged auto industry. Pickup trucks and super luxury cars and sports cars, already down dramatically for 2008 will continue to suffer in 2009 and 2010 until new designs start to arrive. Even the “rich” aren’t interested in gas-guzzlers anymore, if only for appearances sake.

2011 will almost certainly bring the first real change that reflects the new realities, but the realities of technology will make it unlikely that purely electric cars will hit 10% of the market as predicted by CEO Carlos. I predict Hybrids, which only currently account for only about 2% of the market, will more likely hit the 10% world market mark, while electric will be marginalized to below 1% for the next few years. More fuel efficient cars, and particularly light-weight cars, even from the luxury brands such as BMW, Jaguar and Mercedes, are more likely to dominate until the lithium ion battery is brought to the level needed to power a true electric car.