Maybe another CUV isn’t the way to go. . .

By Gary S. Vasilash

The “Car Wars 2025-2028” study from Bank of America Securities includes an interesting assessment of what OEMs need to do.

Simply:

“Automotive manufacturers can compete through cost leadership, superior product, or product differentiation.”

As for the first, the analysts think this is likely “unachievable for most OEMs.” There is pretty much cost parity across the board. Which, no doubt, makes auto execs extremely nervous about the potential of low-cost Chinese vehicles being made available in the U.S. 100% tariffs may not be enough to get them through sleepless nights.

Superior product is certainly something all consumers are looking for. But the BoA folks say there has been “a convergence in product quality, as all automakers have improved to a relatively common level.” Based on findings from Consumer Reports and J.D. Power, “relatively common” is rather relative, as some OEMs are putting out significantly more superlative products.

While it is generally true that there are no longer any “bad cars,” there are much better cars than the not-bad choice.

And finally, there is product differentiation. The study has it that OEMs pursuit of this includes such things as new model introductions, unique models, increased vehicle technology, and “attempts to stand out with new EVs.”

But there is something else that they found, which seems to indicate that product differentiation is something that isn’t getting a whole lot of effort:

“The CUV segment is becoming increasingly saturated by new product, and across all price points (from higher-end, luxury European brands to lower-end, entry-level Korean brands), so little incremental benefit is likely to accrue to the industry as a whole, in our view.”

In fact, BoA projects that of the 223 new models to be launched for model years 2025 to 2028, 53% (121 units) will be CUVs.

Hard to be different when you’re doing the same thing.