Automotive News - Traverse City - August 6, 2019 - 21

AUTOMOTIVE NEWS CAR MBS DAILY

TUESDAY, AUGUST 6, 2019

The global outlook isn't pretty, LMC says
Worldwide sales look flat and risks are rising
Danielle Szatkowski
dszatkowski@crain.com

It's not just the U.S. that's softening
- the entire global vehicle market is
facing flat-to-falling sales for the
foreseeable future, says Jeff Schuster,
president of global forecasting at
LMC Automotive.
"Risk to auto sales globally is rising,
and uncertainty remains high,"
Schuster told Automotive News before speaking here Thursday.
The mature markets of the U.S.,

Western Europe, Japan and Korea
will likely contract in volume over
the next five to seven years, Schuster
said, which means the industry's
global growth opportunities will rely
on emerging markets.
"This leaves countries that are
highly volatile - Brazil, Russia, India, Turkey, China - to drive growth
globally," Schuster said. "But right
now, many of these countries are in a
decline, and that's a risk to the longterm global market."

Schuster forecasts that
the form of new carbon diglobal light-vehicle sales
oxide requirements in Euwill decline 2.6 percent in
rope and China, have auto2019 to 92.2 million units.
makers counting more
Through 2025, he expects
heavily on sales opportunisales to muster a comties in electrification,
Schuster said.
pound annual growth rate
China accounted for 60
of just under 2 percent.
percent of battery-electric
Trade friction and tariffs
Schuster: Growth
vehicles sold in 2018, totalwill continue to generate
must come from
ing 770,000 units, Schuster
risk in global planning, esvolatile markets.
said, and in 2030, China's
pecially with the European
battery-electric vehicle count is exUnion.
At the same time, more stringent pected to reach 6.4 million.
"The challenge in China and Euemission regulations, especially in

rope is that these manufacturers
need their battery-electric vehicles
to hit the emission standards," said
Schuster. "There are price and infrastructure challenges that manufacturers will have to face.
"They also need consumers to buy
the vehicles."
LMC forecasts that U.S. light-vehicle sales will come in at 16.99 million
units in 2025, a decline of more than
300,000 units from last year. Light-vehicle sales in Japan will decline 1.4
percent from 2018 to about 4.72 million vehicles in 2025. f

Analyst: GM
on right track
in planning
for its future

Expect
growing
pains from
shift to EVs

Company looks sleek, smart

Danielle Szatkowski

Electric vehicle sales will climb to new
heights by 2025, claiming a U.S. market
share of 6.8 percent, or 1.14 million units,
according to a forecast from IHS Markit.
That will create a more competitive
segment, with new EV options growing
faster than consumer demand, says
Stephanie Brinley, principal automotive analyst at IHS Markit.
By 2025, the number of nameplates
offering a standard or optional EV powertrain is expected to reach about 130 in
the U.S. - up from 18 in 2018, predicted
Brinley, who will discuss the market
outlook Thursday here.
That transition will bring some growing
pains, Brinley told Automotive News.
Some of the coming EVs will be variants of
existing nameplates,
while others will be
new, she said. Some
future nameplates
will follow the lead of
the Hyundai Kona,
Brinley said, and will
be available as an EV,
hybrid or with an inBrinley: Many
ternal combustion
more nameplates
engine.
Such proliferation in nameplates and
variants between now and 2025 will
make it tougher for vehicles to stand
apart from each other, Brinley warned.
"The expected industry sales of electric vehicles in 2025 sounds like a big
number until you divide it by 130 nameplates, and you realize it starts to get a
lot smaller," she said. "The EV story is
going to see some growing pains as the
number of choices grows faster than
consumer demand."
IHS Markit forecasts that brands will
average only about 27,000 EV sales each
in 2025. Increased options and more
availability will fuel sales growth over
time, Brinley said.
"This expected count of EV nameplates
reflects, in a few cases, placeholder projects that ultimately could come to market
as an existing nameplate," she said. "As
the number of both traditional and EV
SUVs grows, automakers will find it more
difficult to differentiate themselves from
the larger pack."
"In the U.S. market, having a good
product is no longer enough for success," she added. "You have to have a
good marketing strategy and a good
consumer outreach." n

dszatkowski@crain.com

General Motors and Fiat Chrysler Automobiles
have been in the spotlight this year as investors
and critics have questioned their strategies.
The automakers are repositioning themselves
as the industry enters a period of rising costs,
vulnerable margins and higher inflation rates,
said John Murphy, managing director of automotive equity research at Bank of America
Merrill Lynch, who is scheduled to speak here
Thursday. FCA has sold off holdings and considered a merger with Renault Group.
GM has closed its operations in Europe and pulled
back on some in Asia, and is
shutting some of its North
American plants.
GM has been portrayed
by some critics as a
"900-pound gorilla" making
questionable moves, Murphy told Automotive News.
Murphy: FCA
But
in fact, he said, GM is
must catch up.
positioning itself to be leaner and more agile for the next business cycle.
Murphy, author of the annual "Car Wars" report on future product plans for major automakers, believes GM is on the right track.
"The European mass market never will be a
great business because the regulatory regimen
there will make business tougher moving forward," he said of GM's 2017 sale of its Opel and
Vauxhall businesses. Reallocating its resources
to more future-looking opportunities such as
its Cruise autonomous-vehicle unit was a
shrewd move, he said.
"It's an example of a company that was viewed
as a big, dumb 900-pound gorilla in the room all
of a sudden becoming one of the sleekest, nimblest, smartest companies on the planet."
In the near future, "the industry is going to have
to find a way to offset cost inflation on parts and
labor," Murphy said. But that will be complicated
by trade friction, tougher fuel economy and
emissions standards in the European Union and
China and increasing costs of technologies for
electrification and autonomous driving.
He noted that FCA will have to play catch-up
on that front.
"Most automakers are investing in future tech
around autonomous, connected and electrified
vehicles in various degrees," Murphy said. "But
FCA is far behind what most automakers have
done, even in a tough environment.
"FCA is going to have to catch up on that investment, or buy it from somebody else at a
higher cost. And that puts them in a tougher
position in the next downturn." m

Brose's new validation system measures the accuracy and quality of welds in seat rails as the
rails are produced, eliminating the need for spot checks off the assembly line.

Brose system measures
welds in real time
Implementation to begin next year in U.S., Europe

Richard Truett
rtruett@crain.com

erman supplier Brose is rolling out
a technology for its seat rail business that it believes will boost production, cut costs and reduce defects in metalwork.
The company announced the process innovation just ahead of the seminars.
Brose engineers, working with fiber laser
specialist IPG Photonics of Oxford, Mass.,
tested a system that measures the accuracy
and quality of welds in seat rails, the adjustable part of the seat that bolts to the vehicle
floor. The system measures the welds in real
time instead of doing spot checks on the assembly line.
Seat rails must withstand tremendous forces in accidents. The integrity of their welding
is critical. But it entails a complex manufacturing process.
Now, Brose validates seat rail welds by
pulling parts from the assembly line and
tearing them apart weld by weld. Brose routinely tests one in every 280 seat rails this
way, with each test taking about three hours.
The parts are destroyed by the process.
The new validation system will use "inline

coherent imaging" to measure each weld as
it takes place.
Brose plans to invest $6 million in the technology and begin implementing the system
early next year at several U.S. and European
plants. Brose has tested the system at its London, Ontario, factory.
In addition to measuring the depth of each
weld, the system ensures that the parts are
properly aligned.
"Our patented inline welding monitoring
tools provide the comprehensive and direct
measurement of key manufacturing characteristics," said Trevor Ness, senior vice president of sales and marketing at IPG Photonics. The part fit and seam position are also
measured, he said.
As part of the collaboration, engineers
from both companies will analyze data collected from the seat rail welds and look for
more ways to improve manufacturing efficiency and boost safety.
Brose North America COO Stefan Krug
said, "Projects like this, with leading technology providers, allow Brose to incorporate advanced production processes and help us
continue advancing new breakthroughs in
seat structures." m

Automotive News - Traverse City - August 6, 2019

Table of Contents for the Digital Edition of Automotive News - Traverse City - August 6, 2019