Proceed with cautious optimism, auto insider says
May 27, 2009 by Carolyn Yates
The automotive market can be expected to grow 34 percent between 2010 and 2016, but change will be slow and cautious, said Bill Pochiluk, president of AutomotiveCompassLLC, speaking at the APMA-AUTO21 conference’s Automotive Insight Panel.
“These are very, very, very interesting times,” said Pochiluk.
One of the most important factors looking forward is the government, which has a greater ability to impact the auto industry as its influence increases.
“Government regulations are an important driver right now,” said Pochiluck. “Like it or not, the government is designing your next vehicles.”
As to what those vehicles might be, Pochiluk said there will be less demand for image cars and true sports cars, while appliance cars – and pickups in particular – will see increased demand.
This change shows the importance that consumers will have in the industry going forward.
“Yes, we need business going forward, but I think show rooms would like to see some buyers,” said Pochiluk. “We need to restart the engine. We need to bring the consumer back.”
The economic and financial crises may continue to influence the auto sector into 2011. “This is not going to be quick,” said Pochiluk.
Significant obstacles to recovery still remain, including consumer response, funding, time path, the price of new technology and credit availability.
While in the future there should be ample opportunities available through government funding, reduced excess capacity, environmental innovation and increased competition, those opportunities are not without risks. Investing is still scarce, material costs are high and – perhaps most importantly – the supply chain is increasingly vulnerable, which puts suppliers at risk.
“The destruction of the supply chain is a very real possibility,” said Pochiluk. “We see the supply chain as critical to the success of the auto industry. Everyone loses if the supply chain collapses. We need to help the supply chain. Now.”