It is easy to look back at a robust 2015 across much of the auto industry and conclude that the same good fortunes also must lie ahead in 2016.
Forecasters are expecting modest but continuing U.S. sales growth this year, after all. But further expansion is just one challenge facing the industry. The real obstacles are longer range and much more daunting. Among them:
- Fuel economy standards. It is still an open question whether automakers can achieve the U.S. mandate of a fleet average of 54.5 mpg by the 2025 model year. Yet automakers and suppliers are making impressive, if costly, progress and working toward the same unified goal. That they are doing so without an existential crisis threatening them is, by historical standards, most unusual.
- Consolidation. The ongoing wave of consolidation in manufacturing and retailing is being driven by operational and capital efficiencies and has been good for most bottom lines. However, such efficiencies often mean reducing headcounts and, on the retailing side, squeezing out traditional, family-owned dealerships. Those forces could carry societal costs that may someday draw the notice of regulators.
- Restoring reputations. Regulators and lawmakers have been quick to take companies out for public floggings, and who can blame them? Several serious transgressions -- deaths caused by years of faulty General Motors ignition switches and shrapnel-spewing Takata airbags; violations of U.S. safety laws and deception by Toyota, Honda and Fiat Chrysler; and Volkswagen's deliberate emissions cheating -- have brought the industry's integrity into question. Restoring integrity ought to be every automaker's first plan of action for the year ahead.
If U.S. sales climb in the coming year as forecast, 2016 will mark a streak of sustained growth last seen more than a century ago.
Still, sales will inevitably falter. And when they do, automakers, suppliers and dealers will have no excuse for being unprepared.
Thanks to the financial blessing of a long sales boom, they may never have better reserves to tackle change than they have now.