The auto industry is building for a past that's never coming back
The automotive industry is aggressively expanding manufacturing capacity despite declining demand and shifting mobility trends. The author argues that companies are ignoring long-term demographic changes and the rise of autonomous vehicles in favor of outdated growth models.
Why it matters
Excessive capital expenditure in a shrinking market could lead to significant financial instability for major automakers and supply chain disruptions.
Too many car companies are operating without regard for a steadily declining customer base.
Editor’s note: John McElroy is the president of BlueSky Productions, which produces Autoline Daily, and a longtime opinion columnist for WardsAuto. Views expressed here are his own.
Take a look around the American automotive landscape, and you’ll see an industry acting as if new-car sales will grow forever.
Before the decade is out, seven brand-new assembly plants are scheduled to come online in the United States alone. Cumulatively, all the big bets Toyota, Ford, Hyundai, Scout, Slate, VinFast, Lucid and Rivian are making on new assembly plants may be tooled to potentially make 1.8 million more cars and trucks.
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