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ARTICLE · 01 JULY 2020

Optimistic BOFA "Car Wars" Report Released: The Force Will Return After The CV-19 Dark Side Lifts

Foley & Lardner LLP
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Decorated lead automotive analyst John Murphy at Bank of America Merrill Lynch recently unveiled the 2020 edition of his much anticipated "Car Wars" report.

United StatesTransport
Steven Hilfinger
Steven Hilfinger
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Decorated lead automotive analyst John Murphy at Bank of America Merrill Lynch recently unveiled the 2020 edition of his much anticipated "Car Wars" report.  The premise of Car Wars is simple:  for automakers, a faster product replacement rate leads to a fresher overall showroom age which drives market share, profitability and ultimately share price.  Murphy shared 20 years of historical data that support this thesis.  That is, auto companies that can execute (well) on a higher new product cadence will "win" the Car Wars.  If you overlay a global pandemic on top of this thesis, you get the 2020 edition of his report of the automotive world we are living in!

Murphy began with a review of the demand side of the equation, noting that a healthy 1.14 million shoppers showed up in auto dealerships in May.  His 2020 SAAR (Seasonally Adjusted Annual Rate) sales forecast for the U.S. is 12.7 million units, which includes 10 million in Q2, 11 million in Q3 and 14 million

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