Expert: SC auto industry hedged against coming downcycle

South Carolina’s auto industry should be in a better position to withstand a coming downcycle in U.S. sales because its biggest player, BMW Manufacturing Co. near Greer, makes vehicles for the luxury market and exports most of them, an industry forecaster said.

That’s also true for the Volvo plant announced for Berkeley County, and the Mercedes-Benz plant in Alabama, said Michael Robinet, managing director of auto-industry advisory services for IHS, the market intelligence firm.

Robinet was among the speakers Thursday at the downtown Hyatt for the second day of the South Carolina Automotive Summit.

The summit is hosted annually in Greenville by the South Carolina Manufacturers Alliance.

Robinet said he sees U.S. light vehicle sales growing from a record 17.5 million last year to 17.8 million this year and 18.2 million in 2017 but slowing after that as a long upcycle comes to an end.

He noted, however, that the fortunes of South Carolina’s BMW plant and its future Volvo plant don’t hang on the vagaries of the U.S. market, because the cars they make, or will make, are exported and sold in various markets around the globe.

In addition, both plants make, or will make, vehicles for the luxury market, which could hold up even if the mass market turns down.

“It’s good to be in luxury and it’s good to be exporting. There’s no doubt,” Robinet told The Greenville News. “You’ve got additional channels of demand and you’re not just dependent on one market.”

Another forecaster at the summit warned a ballroom full of executives to get ready for dramatic disruption of their industry as a result of three technology trends – computer-driven vehicles that don’t need human drivers, mobility on demand such as that provided by the Uber ride-sharing service, and vehicles connected wirelessly to the Internet.

Gary Silberg, auto sector leader for accounting giant KPMG, said he expects 20-25 percent of today’s original equipment makers won’t exist, will have merged with other firms or will have undergone dramatic change within a decade as a result of the trends.

“And it’s coming fast,” Silberg told The Greenville News. “These things are happening in front of our eyes.”

The trends will also bring business opportunities and “could be awesome for South Carolina,” he said.

This story was originally published February 26, 2016 at 7:55 PM.