2019 Los Angeles Auto Show

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From LMC Autos

Los Angeles Auto Show: The "follow the follower's of electric vehicles

The state of California is locked in battle with the US federal government. The Trump administration claims that the state does not have the right to set its own emission standards, leaving the auto industry divided. From January onwards, California will buy vehicles exclusively from BMW, Ford, Honda and VW Group, all of which are siding with the state. General Motors, FCA and Toyota, among others, have taken the government’s side.

While legal and government affairs departments scramble to find the best strategy, new products were being unveiled to the press and industry observers at the Los Angeles Auto Show, which opened to the public on 22 November.

Electric vehicles (EVs) are more popular in California than in any other US state, but what became apparent during the show is that the environmental impact is no longer the sole concern, with vehicle performance taking on an increasingly important role.

Ford’s inaugural EV is an SUV bearing a Mustang badge. Due to arrive in late 2020, the Mustang Mach-E will have up to 332 hp – only 30 hp more than the Prime, Toyota’s first ever plug-in hybrid version of the Toyota RAV4, which will follow in the footsteps of the Prius. Toyota has stated that the RAV4 Prime will be its second-fastest vehicle, just behind the Supra coupé, capable of reaching 60 mph in just 5.8 seconds.

Porsche revealed a new variant of the Taycan, the 4S. President and CEO of Porsche Cars North America, Klaus Zellmer, said that the company’s first EV was about the brand, so a vehicle aimed at performance was a natural fit. However, when the next-generation Macan arrives, it, too, will be electric. “The market will be ready for it (an SUV)”.

Practicality is just as important as the emotional appeal of these vehicles. The Mach-E has a real second row compared to the Mustang. The Taycan is a sedan, while the RAV4 is the most popular vehicle in the US outside of the Pickup segment.

Needless to say, other ‘real world’ vehicles were on display at the Los Angeles show. The eighth-generation Nissan Sentra launches in February with Apple CarPlay, ten airbags and a new 2L engine that is 30% more powerful than its predecessor. BMW is showing the new 2 Series, now a sedan. The brand is dropping the convertible version of the 2 Series, a bodystyle that Lexus will start offering in the LC next summer.

If the goal is to offer what consumers want, then Chevrolet and Kia nailed the brief with the Trailblazer and Seltos, respectively. Residing in one of the industry’s fastest growing segments, these two Small SUVs will be imported from Korea and will both fall into the US$20,000 price range.

“You cannot have too many SUVs”, claims Steve Majoros, Chevrolet’s Marketing Director of Cars and Crossovers. “One in two vehicles sold next year will be an SUV”. Our forecast corroborates this statement as we anticipate a record 51% market share for SUVs in 2020. However, this will likely lead to higher levels of cannibalisation as brands offer more than one SUV per size segment, especially as overall sales flatten out.

The Trailblazer will be positioned between the Trax and Equinox, but we expect the Trax to be discontinued in 2021. Mazda will follow a similar formula by launching the CX-30 next month, positioning it slightly above the CX-3. “People who like the CX-3 really like it, but it is too small for some consumers”, Jeffrey Guyton, President of Mazda North American Operations, told me at the show. We project sales of the CX-3 to plunge by 30% next year, on the arrival of the CX-30.

So while the federal government locks horns with state governments in court, consumers will be busy buying cars – particularly in Los Angeles, the second-largest market in the US, just behind New York.