INDUSTRY FOCUS: Automotive
* By Sandy Smith *
There is no doubt that the automotive industry is shifting gears—and quite dramatically.
At year’s end, a number of original equipment manufacturers (OEMs) announced significant changes in their lineup, with some well-known models going by the wayside. Around the world, automakers like General Motors, Ford and Jaguar announced major cuts and layoffs. Even China’s auto sector was under pressure, though there was speculation that the government would prop it up to fend off slowing sales.
Closer to home, the changes have largely hit the sedan market with “automakers focusing on larger vehicles and away from small cars. We’ve seen several OEMs reduce or eliminate car models from their lineups in favor of trucks and SUVs,” said Steve Juckem, senior product manager for MHI member ORBIS Corporation.
In an interview with Ward’s Auto Intelligence, TrueCar’s Eric Lyman reported that current auto sales are heavily dominated by light pickups. “That trend will continue, built on the momentum of the new Chevy Silverado, Ram and GMC Sierra pickups, as well as the Chevy Blazer SUV and rumors about a new Ford Bronco that everyone seems to be waiting for. Those will continue to stoke the fire,” he said.
That same demand is starting to shift into late-model used cars as well, Lyman said.
Whether trucks are simply having a moment—buoyed by lower gasoline prices—or part of a wholesale shift to that type of vehicle, it is clear that the auto industry is in the midst of significant changes—some of which trickle down to impact material handlers working in that sector.
Before exploring these broader issues more in-depth, pause for a moment on gasoline. Prices have been low, in part by increased supply and decreased demand. But there are signs that oil prices might begin to rise in 2019, as OPEC tightens up production. Regardless, diesel prices are expected to move upward. By 2020, maritime fuel must drop the percentage of sulfur content in fuel from 3.5 percent to 0.5 percent.
While following commodities pricing can be a challenge because of volatility and unpredictability, there are a few other slower-moving trends worth noting.
While we’re not at full-blown autonomous vehicles yet, each successive model continues to step along the way to self-driving. More and more cars are connected in new and interesting ways.
At January’s Consumer Electronics Show (CES), Digital Trends magazine noted that “important car-related announcements were made by century-old automakers, tech giants, and game-changing startups no one has heard of before. Connectivity, autonomy and electrification reigned supreme once again, with varying degrees of realism and feasibility. While full driving autonomy remains years away, CES confirmed 2019 will be the year of in-car connectivity.”