Detroit is losing more ground in crossovers
During broadcasts of Wimbledon tennis matches this month, a promotional game was playing out between General Motors Co. and Ford Motor Co.
Unfortunately for Detroit, the two look outmatched by other opponents.
The advertisements were for crossover vehicles that are crucial to automakers’ success in the U.S., with consumers buying them in droves at the expense of sedans.
GM was dangling a hefty 18 percent discount on most Buick Encore models.
Ford was hitting back with an ad in which the narrator opened: “Considering Buick Encore? You should look at the all-new Ford EcoSport.”
But the dueling commercials highlighted an all-too-familiar story. In a sequel to Detroit’s virtual capitulation of the still-sizable U.S. passenger-car market, GM and Ford are trying to pick off one another’s customers as they struggle to go toe-to-toe with the likes of Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co.
The ground they’re giving up to Japanese automakers now is with the crossovers that boast better handling and fuel economy than truck-based sport utility vehicles.
“The U.S. has been the epicenter for the crossover market for 20 years, and the fact that our domestic automakers aren’t any better at it than the foreign brands is damning,” said Eric Noble, founder of the CarLab, a consulting firm in Orange, Calif.
By 2023, GM, Ford and Fiat Chrysler Automobiles NV will produce only 35 percent of North America’s crossovers, down from 61 percent in 2005, according to Alan Baum, an independent auto analyst in West Bloomfield, Mich.
That’s less of a collapse than in cars. Detroit will account for just 16 percent of North American output by 2023 — after Ford and Fiat Chrysler will have stopped making mainstream sedans — down from 53 percent in 2005, according to Baum’s estimates.
Still, Baum expects the three traditional U.S. automakers will miss out on the sales growth in car-based crossovers and become even more dependent on pickups and bigger SUVs built on truck frames.
By 2023, Detroit’s share of North American truck production will remain rock solid at 86 percent, Baum said.
“The Asians and the Europeans are taking over crossovers in the U.S. by adding new models and more manufacturing capacity. They did the same thing in cars 10 or 20 years ago,” he said. “In Detroit, this puts even more pressure on trucks.”
Automakers will tally up the score next on Wednesday by announcing July sales. Industrywide deliveries may have slowed to at an annualized pace of 16.7 million in July, according to a Bloomberg News survey of 10 analysts. The rate, which is adjusted for seasonal trends, was 16.8 million a year earlier and 17.5 million in June.
As Detroit automakers come to grips with the softening market, models like the Ford Escape illustrate their uphill challenge.
in size in little more than a year. The company believes it does not need to immediately develop self-driving trucks to remain a competitive force in the world of freight logistics.
The company plans to shift employees currently focused on self-driving trucks to other parts of their self-driving technology programs.
Uber’s self-driving truck program faced competition from a number of companies, including Tesla and Waymo — formerly known as Google’s self-driving car project — which began hauling cargo in Atlanta in March. Waymo said their technology would power Peterbilt Class 8 trucks to carry cargo bound for Google’s data centers.
The company’s engineers have been testing self-driving trucks in California and Arizona, the same state where a fleet of 600 autonomous Waymo taxis has been on the roads without a human driver since November, the company said in a blog post.
“Our software is learning to drive big rigs in much the same way a human driver would after years of driving passenger cars,” Waymo said in the post. “The principles are the same, but things like braking, turning, and blind spots are different with a fully-loaded truck and trailer.”
A Florida start-up called Starsky Robotics intends to make driverless deliveries in the company’s trucks by the end of 2018, according to Wired.
Another start-up called Embark drove an automated truck across the country without a driver, completing a 2,400-mile journey from California to Florida.