By: AUTOMOTIVE NEWS
January 17, 2013
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: