DETROIT – A new report titled Car Wars 2013 – 2016, from Bank of America Merrill Lynch, says automakers will ramp up new product launches for model-years 2014 and 2015. The historical average industry replacement rate, according to the report, is 16%, but it will average 23% between 2013 and 2016. The study also found that the current types of vehicles driving new product launches include CUVs, luxury cars, and light trucks.
One factor leading to a drop in product cycle times is utilizing common, global platforms. Some examples include GM’s Chevrolet Malibu and Ford’s upcoming Transit van. The average product cycle age is now 2.6 (for MY-2013 through MY-2016) showroom years, which is less than the average of 3.2 years from the last decade.
In addition, the study found that large variances in production cycles among manufacturers are a thing of the past. Chrysler is at the top end of product cycle length, at 3.6 years and Honda is at a cycle time of 2.2 years. The report said all automakers are refreshing their products more quickly, which Bank of America / Merrill Lynch said will drive demand.