US auto industry in the spotlight to kickoff 2016

The new year started off with a bang for the automotive industry. First, automotive tech was one of the main highlights coming out of the Consumer Electronics Show 2016 (CES), followed by one of the industry’s crown-jewel events, which generated plenty of news of its own. That event, of course, was the 2016 North American International Auto Show in Detroit. Finally, the automotive industry got a (very brief) shout-out in President Barack Obama’s final State of the Union Address.

Let’s start with CES. While the show is supposed to focus on consumer electronics of all types, the automotive industry has become a larger part of CES in recent years, and this year was no exception. Autonomous driving stood out – it’s been the hot topic in car tech for a few years now – as well as an increased focus on in-car mobility tech, such as smartphone-mirroring systems and improved infotainment systems. And let’s not forget vehicle-to-vehicle communications.

The Detroit Auto Show provided its usual slew of new model-launches, with crossovers and trucks still hot in 2016, as evidenced by Buick’s introduction of a new, small crossover and GMC’s introduction of the redesigned Acadia. Not to be outdone, Honda showed off its next Ridgeline pickup truck. Still, sporty vehicles haven’t been forgotten, as shown by Lexus’ unveiling of the LC 500 sports coupe and Buick showing the Avista coupe concept.

This all adds up to an industry that is feeling strong. In the State of the Union Address, President Obama claimed that the auto industry had its best year ever in 2015. A combination of post-recession recovery, a continuous wave of new technology and the never-ending march of new and redesigned products is driving good times right now, along with falling fuel prices. The drop in gas prices is behind the consumer shift towards crossovers and SUVs, and along with the release of pent-up demand, the industry saw sales numbers that probably led to champagne bottles popping in a few boardrooms.

However, challenges lie ahead. For example, there is a disconnect between government regulations that force automakers to build hybrids and electric cars and consumer tastes for crossovers and SUVs. What’s more, gas prices may rise again and autonomous driving is still in its infancy. But at this moment in time, the picture is the rosiest it’s been for the auto industry in quite some time.

Tim Healy is an Automotive Research Analyst at Mintel. As an auto expert and seasoned journalist with more than 10 years of professional experience, Tim has a deep understanding of the automotive market, influencing his work on the US Reports team and with clients.