Ross cautions against carmakers' expanding lineups

AUTOMOTIVE NEWS

Published: January 17, 2013 1:44 pm ET
Updated: January 17, 2013 1:55 pm ET

Related to this story

Topics Automotive, Insert molding
Companies & Associations International Automotive Components Group North America LLC

DETROIT -- Automakers' attempts to boost sales and profits by broadening their U.S. lineups could backfire, billionaire private-equity investor Wilbur Ross said Wednesday.

"Everybody seems to be expanding their product line and you wonder if that isn't going to lead to problems," Ross, CEO of private equity firm W.L. Ross & Co., told the Automotive News World Congress. "It may lead to some more volatility in market share, and it may lead to, in effect, overcapacity in particular segments."

That could undo some of the financial benefits the Detroit 3 and other automakers have realized by better matching output with demand in recent years, he said.

Ross did not name any examples, but at the Detroit auto show, several automakers are showing vehicles in segments where they currently do not compete.

Volkswagen AG, which is targeting a big increase in U.S. sales in the years ahead, revealed a family-hauling crossover concept called the CrossBlue. Kia Motors America introduced a premium sedan, the 2014 Cadenza, following its affiliate Hyundai Motor America into the luxury-car segment.

Ross, 75, who also is chairman of the supplier International Automotive Components Group, said he expects U.S. auto sales to reach at least 15 million vehicles this year, which is in line with many projections by analysts and economists. That would represent an increase of roughly 500,000 units.

In contrast, he said sales in Europe would continue their slide, falling perhaps 400,000 units in 2013. Sales last year in Europe totaled 12.05 million, the fewest since 1995.

In other comments, Ross said:

  • Hybrid cars will eventually become "unnecessary" as electric and natural gas-powered vehicles grow in popularity. "Technology eventually will overcome the problems of price, range, weight, bulk and recharging that electric cars are burdened with now," he said.
  • Automakers will only be able to meet the federal government's 2025 fuel-economy standards by eliminating considerable weight from their vehicles while also focusing on electricity and other alternative forms of propulsion. "The most cost-effective solution is likely to be some combination of these changes and downsizing the vehicles," he said.
  • Traffic congestion may curb auto sales in China, India and other emerging markets. But he sees the economy in China growing faster this year after a slowdown in 2012, which he attributed to its government's efforts to control a real-estate building boom.
  • The popularity of short-term car rentals, such as that offered by Zipcar, could provide a new source of revenue for dealers. Residents of many urban areas, particularly younger people who increasingly elect not to own a car, have fueled rapid growth for Zipcar, which is being acquired by Avis. "Dealers have large inventories of vehicles and are open on weekends," he said. "That might provide them with ancillary income at relatively low cost."


Comments

Ross cautions against carmakers' expanding lineups

AUTOMOTIVE NEWS

Published: January 17, 2013 1:44 pm ET
Updated: January 17, 2013 1:55 pm ET

Post Your Comments


Back to story


More stories

MGS buying N.Y. medical molding plant from Hospira

April 17, 2014 10:19 pm ET

MGS Manufacturing Group is purchasing the Buffalo, N.Y., injection molding facility and related product line of Hospira Inc., effective July 1. Terms ...    More

Proposed Shell project draws more than 1,000 to informational meetings

April 17, 2014 2:03 pm ET

More than 1,000 people attended a pair of public meetings hosted by Shell Chemical LP on April 16 to discuss the possibility of building a major...    More

Image

Plastics News reporter wins journalism awards

April 17, 2014 11:03 am ET

Asia Bureau Chief Steve Toloken won two first place awards for the Society of Professional Journalists' Detroit chapter.    More

Image

Hedging can slow the resin rollercoaster

April 17, 2014 3:00 pm ET

The good old days — if they even ever existed — are gone, and.Andy VanPutte thinks volatility in the resin market is here to stay and...    More

Image

Navigating the rough seas of selling your company

April 17, 2014 2:47 pm ET

For family owned plastics firms who survived the Great Recession, many wonder: Is it time to sell, retire and sip cocktails on the beach? Or, maybe fi...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events