Kevin Sheehan works within the automotive industry is among the most popular considering the yearly sales that spike upwards of 90 million. Since worldwide sales of automotives reached a record 88 million back in 2016, projections have only gone higher with each year expected to result in a new record. However, there some drawbacks in the industry highlighted by bankruptcy and near liquidation of various OEMs (original equipment manufacturers). 

USA and China remain the world’s largest markets in both production and sales thanks to renowned companies like Ford, Toyota and GM (general motors). Other companies that boast a fair market share include Volkswagen, Honda, Nissan and Hyundai. They are also largely involved in shaping current and upcoming trends within the automotive industry. Here is a brief look at what to expect in 2018 and beyond. 

Upcoming trends

The automotive industry has swiftly adapted to modern digitalization that eliminates the traditional stressful salesman negotiations. Today, consumers can access all the information they want in a second thanks to digitalized show rooms that provide virtual reality peeks and capabilities. A click of a button is all you need to view information regarding a particular car.

Autonomous driving is also going to be a vivid possibility in the future where we will have cars that can driver themselves just like the elevators were upgraded to eliminate
operators. While it is not prevalent on our roads, AV is already being experimented in various countries. Kevin Sheehan has been working in the production and engineering of several car components.

Connected supply chains are going to be another big thing in the coming years as a direct impact of digitalization in the automotive industry. Personalizing consumer experiences will result in customized needs and more effective engagements that allow for a more decentralized approach towards production instead of regional/national production. There are other minor trends, but these are the common projections of where the automotive industry will go in the coming years.

Car popularity

The most popular companies in the automotive industry still remain Volkswagen, Toyota, GM, Ford, Honda, Nissan and Hyundai. Other reputable companies include TTM (Tata Motors), BMW, Tesla, Daimler, and Peugeot. However, the most popular cars are not specifically from the popular companies. Various aspects go into account when selecting the top picks. These include overall score, road test, reliability, fuel consumption, safety and owner satisfaction. What’s more, the popular cars in the richest neighborhoods are not necessarily the top picks for everyone.

For instance the top ten most popular vehicles in USA include;

  • Toyota Yaris iA
  • Chevrolet Cruze
  • Toyota Prius
  • Kia Optima
  • Mazda MX-5 (Miata)
  • Chevrolet Impala
  • Toyota Highlander
  • Subaru Forester
  • Honda Ridgeline
  • Audi Q7

Looming trouble for investors?

Return on capital has always been an endemic problem for investors in the automotive industry and the statistics indicate this will continue to be the case over the next few years. Even the top OEMs have recorded dismal return on investment (as low as 4% in 2016) when other sectors recording average annual shareholder returns of 15% and above. Although automotive sales have been spiralling upwards over the years, the positives are outweighed by the fact that OEMs have been suffering an anaemic streak of negative net returns. 

Summary

While the automotive industry is one of the largest and fastest growing in the market, it faces challenges mainly for the OEMs that struggle to make significant profit. However, it is one that must exist and there is a large market waiting for new efficient high performing cars every year. It will be interesting to witness how the industry shapes over the next few years.

Published by Tauseef shah