DETROIT, June 26, 2012 (GLOBE NEWSWIRE) -- Though the North American auto industry's performance has stood out of late compared with that of other industries in today's sluggish economy, that status is threatened by lingering low employment in the economy, fast-rising overhead costs at automakers and suppliers alike, and big generational demographic shifts in which Millenials and other young people care less about cars than past generations while aging Baby Boomers simply have less reason to drive. That's according to a comprehensive annual study by AlixPartners, the global business-advisory firm.
As a result of these and other factors, the 2012 AlixPartners Automotive Outlook predicts that there are 5 million fewer potential car-buyers today than five years ago, that U.S. auto sales will be a conservative 14.3 million units this year and that sales in the U.S. and Canada are not likely to exceed 16 million through at least 2015.
Said John Hoffecker, managing director at AlixPartners and head of the firm's Automotive Practice: "It's long been a truism that if people don't have jobs, they don't buy cars. Given lingering low employment in this country, plus the fact we estimate that in the last decade incentives 'pulled ahead' more than 18 million units of sales, we see true, underlying demand being a big issue for the industry going forward. Successful companies will be those that stop the old bad habits of yesteryear from creeping back into their systems while making aggressive, well-informed investments in product -- all the while recognizing that they're unlikely to get a whole lot of help from the economy."
Other key findings of the study include the following:
Concluded Hoffecker: "The last few years of steadily increasing volumes have benefitted virtually all in North America, after a difficult period of restructuring. However, with possible contagion from Europe further weakening the U.S. economy, fast-changing consumer demographics further skewing underlying demand and the challenge of efficiently implementing global mega-platforms facing it, the North American auto industry, despite its current success, has its work cut out for it in coming years. Perhaps the industry's biggest challenge, though, is an internal one: whether it will be satisfied with its recent performance, or prepare now for the big challenges ahead in this still-cyclical industry."
About the Study
The 2012 AlixPartners Automotive Outlook is based on a benchmark analysis of 38 automakers and 233 automotive suppliers. Public economic data and forecasts were also used in the study.
AlixPartners LLP is a global business-advisory firm offering comprehensive services in four major areas: enterprise improvement, turnaround and restructuring, financial-advisory services and information-management services. Founded in 1981, the firm has offices around the world, and can be found on the Web at www.alixpartners.com.
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