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In Case You Missed It: Executive Session with John Murphy

On April 20, MICHauto hosted an Executive Session for CEOs from the MICHauto community, featuring John Murphy, managing director and head of U.S. Automotive Equity Research for Bank of America Global Research. Murphy shared insights with Glenn Stevens Jr., executive director of MICHauto, and industry executives about the current automotive market dynamics.

Catalyzed by the COVID-19 pandemic, Murphy says that while the U.S. automotive cycle may have hit a trough in 2020, sales have made a remarkable V-shaped recovery since mid-2020. Other dynamics have contributed to a stable, yet uncertain market, and some bumps are expected in the short-term with a four-to-five-year window of recovery to 17 to 18 million units. China and the U.S. are outpacing Europe in terms of recovery, but ongoing supply chain disruptions could contribute to a downward slide in global production and sales this year, with a likely recovery in 2022 and beyond.

Despite uncertainty, OEMs are demonstrating a commitment to product activity for development of new electric vehicles (EV) and crossover utility vehicle (CUV) models. These product efforts are increasingly directed towards powertrain advancement, with a surge in EV model launches by both incumbents and new automakers. Within the forecast horizon, it is expected that 50% of powertrains will be internal combustion engines (ICE), with the growth of EVs, hybrids, and fuel cell options.

Now is a pivotal point in the automotive industry and companies must remain diligent in optimizing their core business, while also investing in the future to ensure long-term sustainability and market position in the face of emerging auto-tech companies.