"There's a huge difference between a growth environment and a plateau environment," AutoNation CEO Mike Jackson said Tuesday at the Automotive News World Congress. "It requires a different skill set. We have to manage different."
Already, some companies are adjusting. Hyundai Motor Co. last year considered adding an assembly line at its plant in Montgomery, Ala.
Adding a line would have been an obvious move a few years earlier, when Hyundai's U.S. sales growth had slowed because its supply was constrained. But given the rapid consumer shift from cars to trucks, and looking ahead at an expected slow-growth market, Hyundai opted instead to retool the plant to produce the Santa Fe Sport crossover and reduce output of the Elantra compact and Sonata midsize sedans by 50,000 per year.
"If you look at historical industry cycles, it has generally been about a seven-year run," Hyundai Motor America CEO Dave Zuchowski said earlier this week at the Detroit auto show. "We're nearing the end of a good seven-year run, and I definitely think it starts flattening out, though I don't see a collapse."
Likewise, Bob Lutz, former General Motors vice chairman, counseled automakers and suppliers to move cautiously. "Don't assume the good times are going to last," he said. "Don't increase capacity. Try squeezing every car out of the capacity you have."
Suppliers, he noted, sometimes take low-margin contracts to get a foot in the door with an automaker. That would be a bad move now, Lutz advised: "Don't take marginal business."
While recognizing the market has entered a slow-growth phase, some companies still count on bucking the trend.