American Honda ‘big winner’ in annual ‘Car Wars’ report
DETROIT — American Honda, poised to redesign nearly all of its nameplates through the 2019 model year, is likely to gain U.S. market share in the next four years, according to the annual “Car Wars” report from Bank of America Merrill Lynch.
Honda is expected to redesign an average of 24 percent of its nameplates each year from the 2016 through 2019 model years, the report says, meaning that 96 percent of the company’s portfolio will have been redesigned by the end of the period.
By contrast, the industry overall is expected to redesign an average of 20 percent of its nameplates each year through the 2019 model year. The result, the report concludes, is that Honda’s market share and profitability should rise through the 2019 model year.
“Honda really is the big winner as we look at this year’s study,” Bank of America’s U.S. auto analyst, John Murphy, told journalists on Wednesday at an Automotive Press Association lunch. “When you look at their product portfolio, basically everything will be relaunched in the next four years.”
After a brief lull in product redesigns during the 2014 and 2015 model years, the report says, Honda is expected to pick up its cadence. The automaker’s market share was 9.3 percent at the end of 2014, but slipped to 8.8 percent through May this year. The report says Honda’s market share will increase as it picks up the pace of vehicle redesigns.
Crossovers and SUVs
The report predicts automakers will launch 193 new or redesigned models in the U.S. from the 2016 through the 2019 model years, an average of 48 per year, 26 percent higher than the yearly average between 1996 and 2015.
Fiat Chrysler Automobiles is expected to be close behind Honda in product redesigns from the 2016 through 2019 model years, the report says. FCA is expected to replace 22 percent of its portfolio each year. FCA has a lull in its product cadence in the 2016 model year, according to the report, but reaccelerates from 2017 through 2019.
A stronger auto industry means product development competition is about to heat up, according to the study.
The most competitive segments: crossovers and SUVs.
Honda’s and FCA’s new model volume mix skews toward crossovers and SUVs in the next four years.
But the report warns that having too many crossovers in future-product pipeline is risky.
“It becomes a crowded segment,” Murphy said. “With so much product, there is a real risk price could come under pressure.”
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