The Automotive industry has been a key component of the U.S. economy for nearly a century, and one of the biggest trends over the last two years has been the demise of the sedan. Lower oil prices and the feeling that a larger “crossover,” SUV, or pick-up truck are safer are a few of the reasons new buyers are walking past the traditional four-door cars on the lot to kick the tires of the four-wheel drive vehicles.
There’s plenty of data to back it up. According to July unit sales on motorintelligence.com, overall “car” sales were down 11.7% year to date while light-duty trucks, crossovers, and large SUVs were up 3.5%, 7.5%, and 6.9%, respectively. Sales of Nissan Rogues, Toyota RAV4s and Highlanders, along with Jeep Grand Cherokees are up double-digit percentages year to date over 2016 while sales of Toyota Camrys and Corollas, Honda Accords, and Nissan Altimas have fallen.
One might not need statistics—just look around at the other vehicles on the road. You’ll get the picture.
It’s not that people are buying fewer units or driving fewer miles. It’s a culture shift. And a constant challenge for automakers whose business is a bit like the horse industry as the design and manufacturing ends of both businesses aren’t able to turn on a dime.
The same thing that is happening on the road is happening on the racetrack and in the fields. Some observations:
- According to Equibase’s economic indicators, race days and the number of races have dropped a bit from 2016 while wagering is up 3.9% through the first six months of 2017 compared to the first six months of 2016. But look around: the money being bet is migrating more and more toward the bigger meets and the bigger days, i.e., Gulfstream, Santa Anita, Keeneland, Saratoga, and Del Mar.
- While the national foal crop has remained stagnant over the last few years, the books of the top-end stallions have continued to grow, and the once-exclusive 100-mare-book club seems pretty crowded.
Have a marginal stallion or one that has gone a little cold? It’s a tough sell for stallion operators.
- The sales market is unforgiving these days. With the smaller foal crops, and a list of buyers that hasn’t really seen any growth in awhile, the demand for the very best weanlings, yearlings, and 2-year-olds is stronger than ever.
Have a marginal offering or one that doesn’t jump through all the hoops? It’s a tough sell for breeders and consignors.
- The first Saturday in August presented an issue older than the 1981 Buick Regal I used to tool around in. The field for Saratoga’s Whitney Stakes (G1) broke from the gate at about the same time as the West Virginia Derby (G3) at Mountaineer Casino & Racetrack and Resort. Most eyes focused on Saratoga, leaving Mountaineer’s signature event in the back lot. C’mon, guys, there’s plenty of room on a Saturday afternoon to spread out the races.
The industry will adjust. It always does, however sometimes without the speed required to remain current. The same might be said for the auto industry…however, floating around online last week was a think-piece on the future by Udo Gollub, CEO of 17 Minute Languages. One of his points concerned the future of the car:
“Autonomous cars: In 2018 the first self-driving cars will appear for the public. Around 2020, the complete industry will start to be disrupted. You don’t want to own a car anymore. You will call a car with your phone; it will show up at your location and drive you to your destination. You will not need to park it; you only pay for the driven distance and can be productive while not driving. Our kids will never get a driver’s license and will never own a car.”
Investing in driverless cars is hot today, with all of the major manufacturers, along with tech giants such as Apple and Google, working feverishly on self-driving projects.
Let’s hope they don’t start working on the “Jockeyless horse.”