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The annual study, published since 1991, is based on the notion that newer vehicles directly drive increases in market share for automakers and thus an automaker with a higher replacement rate has a better chance to increase market share.
This year’s report says the industry’s average replacement rate, 23 percent, is elevated over traditional levels, largely because of new EV startups launching vehicles that are offsetting the below-average replacement rates from some established automakers. Still, Murphy said the new players aren’t guaranteed to be successful.
“Generally, we have given the companies the benefit of the doubt that they will launch models in their targeted time frames, but we remain skeptical around their ability to execute production/sales at high volume,” the report said. “Additionally, we expect a fierce competitive environment will manifest from incumbent OEMs also ramping up their alternative powertrain product launches, which could limit success for these newer entrants.”
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