Low Volume Vehicles on the Rise -- Could Create Big Profit for Carmakers

Washington DC August 15, 2005; The AIADA newsletter reported that since 1985, the average annual sales per nameplate has been cut by more than half from 106,819 to 48,626, and that number is expected to drop even further to 40,000 by 2010.

This reflects how fragmented and consumer conscious the auto market has become. The Detroit News reports the change is forcing automakers to allocate financial resources to design, engineer and manufacture cars and trucks in different ways that cater to the needs of consumers and families.

"With 344 cars and trucks to choose from in the United States, we’re already at low-volume, niche levels," said John Waraniak, head of the Automotive Center of Excellence at Troy-based TATA Consultancy Services. Jerry Mosingo, COO at ASC Inc., a Southgate-based specialty vehicle producer, is very optimistic about this trend. He says with 3.4 million units of underutilized manufacturing capacity in North America, the industry could realize potential profits of $20 billion by converting plants to build low-volume models.