Predicting what any industry will do in 2017 is a challenge.  We have to consider Brexit, a new President, NAFTA is up in the air … and all this coming after a robust year of sales in 2016.  But, this is an Automotive Industry article, so predict 2017 we will.  Here we go:

• With years of higher sales, more and more vehicles are on the roads.  This means more warranty claims.  More warranty claims means increasing costs, which means companies within the automotive supply chain arguing over who should pay those costs.  Therefore, especially when one considers that sales cannot keep going up forever, brace for a tighter market between automotive companies, and possibly more disputes.

• Between 2006-2016, U.S. Criminal Antitrust cases doubled.  The new administration is expected to apply its resources differently.  And what of Brexit?  E.U. competition policy may be forced to change, or to include more actors.

• The Automotive Industry is very international.  Where is your labor force from?  Companies should expect stricter immigration enforcement and review, and delays on the availability of non-U.S. labor in the near future.  This could cause the labor pool to shrink domestically.

• Compliance!  Does any U.S. company not recoil at the mere mention of FCPA, OFAC, and any number of other government enforcement acronyms?  With the new administration more protectionist, companies operating beyond U.S. borders should be ready for continued strong enforcement in the form of financial penalties and prosecutions.

New years and new governments always offer the prospect of change.  There is every reason to think that the Automotive Industry is more at risk for more substantial changes in 2017.  We have been thinking about these issues.  We will continue to in a series of posts focused on individual areas over the next few weeks.  Stay tuned!