DETROIT — Consumers may be returning to dealer showrooms over the next couple of years to look at new vehicles that have few changes, as an electric vehicle "head fake" contributed to product delays, a former Bank of America Securities analyst said this week.

Profitability should pick up in the latter part of the decade, though, as new products once again hit lots, midsize SUV shares shift toward more profitable rugged models and small pickups and hybrids become a long-term solution to fuel efficiency — not just a bridge to EVs, according to the report from John Murphy, who's traditionally behind the annual "Car Wars" study but has ventured on his own as a consultant under Murphy Automotive Partners.

"You have never seen a three-year period this low," Murphy said during an Automotive Press Association event at the Shinola Hotel. "So, between model year '26, '27, '28, we are seeing a crushing depression, and the only reason model year '27 kicks back up is you have the Silverado and Sierra in it. The reality is the rest of the industry is hurting in a huge way."

The premise of both Car Wars and the new Murphy Automotive Product Pipeline is that automakers with showrooms of fresher models gain market share, while those that are older lose. At a global scale as Chinese automakers make inroads in foreign markets with subsidized vehicles that are redesigned at a much faster pace than western automakers, Murphy predicted numerous brands will exit the market in the coming, decade with about 15% of the roughly 350 brands in the world surviving. Ultimately, he forecasted industry consolidation will result in one to two "national champions" each from the developed markets of the United States, Europe, Japan and South Korea.

"This is simply the most important economic driver in any economy that exists," Murphy said about nations protecting their domestic automakers, "because if your population is not mobile, they can't get to work, and if they can't get to work, their economy stops."

Under Biden administration pressure to make EVs represent half of U.S. sales by the end of the decade, many automakers pushed forward on EVs only to struggle to find demand, especially as the government ended subsidies after President Donald Trump returned to office.

Major automakers have made approximately $70 billion in write-downs for EVs as they've canceled vehicle programs and delayed debuts. That's left a big gap in the cadence of new-vehicle launches until the next generation of trucks at the end of the decade. The vehicle redesign rate is for 2026 and 2028 is about half or less than the 14% average between 2007 and 2026.

"The average product age gets up to 4.8 on a volume rate basis," Murphy said. "That's crazy. That means that consumers are going back to showrooms that have bought a vehicle in the last three to six years, and they're being presented with the products that only have minor changes relative to what they just bought, and if you think about what's going on with the pricing industry, not only is it the same products, but somebody's trying to charge them 30% more for it."

Instead of EVs, Murphy sees hybrids becoming the dominant powertrain as a long-term solution for fuel efficiency and carbon emissions requirements as opposed to an older view that hybrids were a bridge for consumers to get to EVs.

"The industry is proving out that hybrids are more of a global solution and not a bridge," he said, "and ultimately, hopefully, whatever the new administration is in 2029 recognizes they need to be very careful with the way they run regulation in the industry, not to really disrupt things and make the U.S. industry uncompetitive."

Murphy also predicted the heart of the market will shrink away from midsize SUVs to affordable small crossovers and more niche alternatives like small pickups and rugged off-roaders as evidenced by the success of the Ford Maverick and Bronco.

"It is a good thing for industry profitability," he said, predicting potential for run rates of 5% to 10% more than 2025 in 2028-30. "There's a significant increase in highly priced vehicles, and I think the strategies a lot of the automakers make sense to really take advantage of the high-end market and certain trim levels, where they can make a lot of money."

Stephanie Brinley, principal automotive analyst at S&P Global Mobility, likened the circumstances to what's happened to once-popular station wagons and minivans: "People want something different."

Consumers who want a three-row vehicle are often better off getting something larger than a midsize SUV, and if they don't, then a small crossover is a more affordable option, added Sam Abuelsamid, vice president of market research for auto communication firm Telemetry Group.

To that end, average pricing isn't going down, said Murphy, who is forecasting a $56,000 average transaction price in 2030 compared with 2025's $49,000.

Jeep and Chrysler maker Stellantis NV, however, represent a bit of a wild card for the industry. Stellantis is investing around $25 billion into North American products as part of a $70 billion global turnaround plan.

"The strategy is, I would say, a little bit discombobulated, a little bit disorganized," Murphy said, noting a lack of historic consistency in product investment. "It has a real lack of purpose in its direction, but there are a lot of products coming in now. It means that there is risk with all of that product activity coming out of Stellantis, they could be disruptive in the market."

That could put the whole industry's profitability at risk, he added. Ultimately, though, companies with strong truck portfolios like the Detroit Three and hybrid offerings like Toyota Motor Corp. are positioned well, he said: "There's going to be some clear winners and losers."

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