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

Image

Kydex, Allen Extruders joined under Sekisui SPI name

September 17, 2014 4:12 pm ET

Sekisui Chemical Co. Ltd. is combining plastic sheet makers Kydex LLC and Allen Extruders LLC under one roof as Sekisui SPI.    More

Image

Minnesota receives grant to help develop new bioplastics

September 17, 2014 4:08 pm ET

The University of Minnesota has received a $20 million grant to fund the development of new types of bioplastics.    More

Badger buys competitor Joseph Homa

September 17, 2014 4:04 pm ET

Badger Plug Co. has extended its protective plugs customer base by acquiring and closing a rival, Joseph Homa Consultants Inc. of Montreal.    More

Image

China's Polymax Elastomer launches U.S. production in Illinois

September 17, 2014 3:35 pm ET

Chinese materials maker Polymax Elastomer Technology Co. Ltd. has opened a North American production site and headquarters in Waukegan, Ill.    More

Image

Georg Fischer closing SC pipe plant

September 17, 2014 2:58 pm ET

Georg Fischer Central Plastics LLC (GFCP) closed its manufacturing operation for pipe components in Abbeville, S.C., on Sept. 15, putting 17 employees...    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events