Automotive Watch: 8 Trends That Will Drive the Industry in 2017

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Tesla Model S

Auto brands are on the eve of major buzz-generating events, with the Detroit Auto Show next week following the increasingly vehicle-centric International Consumer Electronics Show in Las Vegas this week.

And as auto brands jockey for attention with a blizzard of advances in connectivity, automated driving, electronic propulsion and some old-fashioned horsepower, a number of important events, developments and trends that will shape the industry in the US and globally. Here are eight of them:

December to remember?
Auto brands were pulling out all the stops in December to take advantage of rising consumer confidence. Many offered lofty financial incentives on slow-selling sedans, for example, in a flurry of activity that may yet have helped the US industry eke out a new record level of annual sales to surpass last year’s robust total of 17.4 million. Regardless, the big question now is whether the seven-year recovery in the American auto market can really extend its run in the new year, with hopes ticking up at least slightly because of expectations of growth-friendly policies by the Trump Administration.

New luxury champion
Mercedes-Benz placed itself well ahead of other luxury rivals in the 2016 race to claim the crown for US premium-car sales, riding strong new SUV offerings to roar past BMW, which has held the title for the past two years. But actually, Lexus, the perennial winner until five years ago, was poised to surpass BMW in the US market for 2016 as well. Let the jockeying for the 2017 crown begin!

Super Bowl or not?
The NFL’s viewership swoon from early in the 2016 season through the first several weeks gave pause to many automotive advertisers that had come to rely on professional football as the one most dependable platform for getting live TV viewers. Suspect causes for the audience softness ranged from a kneeling Colin Kaepernick to the distraction of the presidential election. Will the tarnish hurt the willingness of car brands to advertise in Super Bowl LI? So far only Honda and Kia have confirmed they’re coming back to the Big Game, while Toyota and MINI have confirmed they’re dropping out this year.

Auto show showdown
The year begins with some of the most important experiential marketing in the car business: big shows. CES has drawn significant attention in the past few years with its increasing appeal as a stage for auto brands to make major technology-related announcements, such as GM’s debut of the Chevrolet Bolt EV last year. But traditional auto exhibits including Detroit’s North American International Auto Show and the Los Angeles Auto Show are fighting back with their own mobility displays, press conferences and emphasis layered on top of what they already do. NAIAS bows next week.

Gasoline prices
Now that OPEC members are making nice in an effort to stop the bleeding in oil prices, and Russia and other non-OPEC producers are colluding on that point as well, automakers expect some significant strengthening in gasoline prices: to $2.49 this year, by one estimate, from an average of $2.17 last year. If pump prices begin pushing the $3-a-gallon level again, that could make 2017 the year of a bit of a comeback for sedans, which have lost huge ground lately to sales of SUVs and crossovers. The entire global automotive fleet is incredibly more fuel-efficient every year, but cars in general still provide better mileage. And would another spike in gasoline prices finally make EVs a more mainstream proposition?

Pivoting toward mobility
Nearly every automaker is fiercely engaged in developing more automated driving technologies, with most of them trying to achieve a declared goal of fielding a completely autonomous automobile in the next few years. Of course, they’re joined in their self-driving fixation by tech giants such as Uber, Google and Apple. Now that all the pledges have been made, could 2017 be the year when some clear leaders emerge in this very crowded race?

Bolt vs. Model 3
General Motors came through on CEO Mary Barra’s promise to field a mainstream-priced all-electric vehicle, with a range of more than 200 miles between charges, by the end of 2016. So far, Bolt is being sold only in Oregon and California—America’s friendliest EV markets. Sales will expand across the country this year. The debut of Bolt was a blow to the prestige of Tesla, which once promised its own model priced at around $30,000 (after tax credits) in the same time frame. Anticipation remains high for the planned launch of Model 3 before the end of this year, with 400,000 people having paid $1,000 deposits for the right to buy one.

Global shifts
China’s auto market has cooled over the last couple of years but the world’s most populous country increasingly is becoming the world’s most important car market—and the most crucial playing field for more individual brands, such as Cadillac. This year will see more advances by domestic Chinese auto companies as well. Meanwhile, India’s effervescent auto market remains strong, while once-promising Brazil is in an economic shambles. Europe in 2017 is expected to continue its painfully slow recovery from the Great Recession, as Brexit questions loom over the continent.

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