Weaker Dollar Could Make U.S.A. More Attractive to Automakers

This is number 2 in our continuing series of predictions, forecasts, prognostications, trend watches and anything else relevant to forward-looking analyses of what the year 2008 holds in store for manufacturers (read number 1 here). The following speculations, centered on the automotive industry, come courtesy of Michelle Collins, vice chairman and US sector leader for Deloitte's Automotive Practice.

2008 Trends for the Automotive Industry

Customer Loyalty: Automotive industry executives will continue to be challenged with lining up their product offerings to match consumers demand. As OEMs compete for market share, they will have to reexamine sales and marketing approaches to improve customer loyalty. Cash incentives effectiveness has diminished and has had a detrimental impact on the brand and erodes profitability.

Continued Alliances and Partnerships: As global OEMs and suppliers look for innovation and technology, new and different kinds of alliances, partnerships and equity investment will continue to become increasingly common.

Globalization: U.S. automakers along with their international counterparts will be moving to expand their global footprint to increase top-line revenues. They are hoping that the tremendous growth potential of the "BRIC" markets (Brazil, Russia, India and China) will offset anticipated flat-to-slow growth in the U.S. and Europe. In addition, there will be increased in-bound investments from international investors who are looking to expand their footprint in the U.S. and gain access to technology. The weaker dollar has made the U.S. a more attractive vehicle manufacturing location.

Lower Volume Market: Credit tightening, high fuel costs combined with lower consumer confidence will result in lower to flat volume and challenge automakers to maintain market share.

Environmental Sustainability: OEMs will continue to examine their options to make products more fuel-efficient and environmentally friendly. However, U.S. manufacturers and suppliers will need to collaborate to find the solutions that balance both the environment and business needs.

Talent Management: The automotive industry anticipates a shortage of talent in the coming years. This shortage will be due to the retirement of experienced talent and the need to compete for talent with other higher visibility, faster growth industries.