It’s the second-largest passenger vehicle market in the world and is home to the Big Three in the automotive industry. America’s love for the four wheels is simply legendary, a passion that transformed the early ‘toys for big boys’ phenomenon into an everyday ride for the common man. From brawny engines and curvaceous chrome to the practical family car, we have seen them all, taking the automotive industry in America on a money-spinning ride.
Today, approximately 8-10 million cars are manufactured in the country annually, with both foreign and domestic brands fighting for the share of the pie. 2018 alone saw over 17 million cars being sold across the country, with oversized vehicles picking some serious pace. But preferences change and so do the trends. So what are Americans planning for their next car purchase, and which are the brands that are currently in top gear? Piplsay* (powered by Market Cube) finds out.
While 2018 was a profitable year for the automotive industry, 2019 is expected to see some slowdown with rising interest rates and income tax deductions affecting affordability, and in turn vehicle sales. Moreover, with the phasing out of many small-sized cars and sedans, potential buyers will be left with fewer options within their budget.
But despite these challenges, close to 40% of Americans seem to have plans of purchasing a four-wheeler in the coming year, with a majority of them still opting for gas vehicles. Still, the move towards sustainability is obvious, as more and more people plan to opt for electric vehicles next. Within that, hybrid cars seem to get a clear edge over fully electric cars, especially as an intermediary option in the transition away from fossil fuels. Overall, EV sales have seen a steady increase over the years, with 2018 witnessing a massive 81% jump over the previous year. Leading the race with a huge margin was Tesla Model 3, with close to 140,000 sales, followed by Toyota’s plug-in hybrid Prius Prime.
That SUVs are a preferred choice for a majority of Piplsay respondents comes as no surprise, given that the two categories made for a whopping 68% of total automobile sales last year. Already, there are about 120 different models of SUV and entry-level Crossovers available in the market, with many new launches expected in the coming years. Blame it on the plethora of choices, low gas prices, or improved fuel economy, Americans are fast ditching the traditional family cars and minivans, for these big-sized vehicles as well as sedans. Surprisingly, 55% of Americans today plan to own their car from the get-go, without having to worry about going into debt or even future market uncertainties.
While it’s not unusual for top brands like Toyota, Ford, Chevrolet, and Honda to continue being the favorites, especially given their wide offerings, the entry of Jeep clearly points towards the shift in preferences. It also reiterates the country’s growing obsession with SUVs. To differentiate themselves and to stay competitive, carmakers today are also investing heavily in research and development. Ford, for example, plans to invest over four billion USD in AI development through 2023, with an eye on developing partially autonomous vehicles. Additionally, brands are focussing intently on rolling out more electric vehicles to cater to the fast-growing demand. While Audi, Jaguar, Mercedes, and Porsche are launching high-performance luxury electric cars to compete with Tesla, others like Nissan, Hyundai, and Kia are looking to penetrate the more affordable market segment.
With over 30 automotive brands and close to 300 car models to choose from, there is simply no dearth of options for car lovers today. Rising aspirations and changing trends will no doubt influence which cars consumers will buy, and how they will buy it. But if there’s one thing that will remain constant, it’s their love for the four-wheel drive. The race is on, and it’s fast getting electrified!
*Based on 70,000 online responses