But in the interim, companies like General Motors — which on Monday unveiled major job cuts — face decidedly more mundane questions: How to respond to slowing US demand as higher interest rates bite into new car sales while more used vehicles are also entering the market?

“It’s going to be a smaller market,” Cox Automotive economist Charlie Chesbrough said of GM and Ford, which is likewise expected to eliminate jobs and perhaps shutter factories.

Both GM and Ford want to be major players in autonomous driving and other newer technologies, an objective that will demand billions of dollars in new investment and could ultimately lead to more industry consolidation, analysts say.

“The pie is starting to shrink a little bit, or at least that’s their view and they’re trying to get themselves right-sized before things get much worse,” Chesbrough said.

Cox Automotive projects new US car sales will slow to 16.6 million units in 2019 and 16.5 million units in 2020, a drop below the 17.0 million level that sales are expected to again eclipse in 2018.

The forecast includes the effect of higher interest rates and the drag from a trove of leased cars manufactured during the boom period. But it does not assume an all-out trade war, which would further dent sales, Chesbrough said.

‘Nowhere to go but down’

On Wednesday, US President Donald Trump on Twitter threatened new tariffs on car imports, amplifying his response against GM, whose job cuts affect the politically crucial states of Michigan and Ohio.

Auto cycles typically end with a five or 10 percent drop, a relatively modest decline that automakers take as a signal “to get their production house in order,” said Nicholas Colas, co-founder of DataTrek Research.

“You know that once you’re passed the peak, you have nowhere to go but down and that’s what scares auto executives,” said Colas, adding that auto sales could go as low as 13.5 million in a recession.

Adding to the dilemma is uncertainty about the outlook for new car sales in the medium term given potential technological disruption.

Will more drivers opt for ridesharing and against owning their own vehicle? How many consumers will opt for an electric car once more vehicles hit the market at lower price points? When will autonomous driving arrive in a meaningful way?

“No one has any idea what the next cycle is going to look like,” Colas said. “In this case, GM not only has to plan for normal cyclicality, but GM clearly feels it needs to plan for the next five to 10 years.”

Consolidation ahead?

GM plans to shutter seven plants worldwide, including five in North America that build sedans that have not been selling well in the United States. The company did not release an estimate of the total potential employment hit but some news reports have put it at 14,000 workers or more.

GM Chief Executive Mary Barra characterized the move, intended to save an estimated $6 billion, as part of an effort “to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future.”

Many expect the GM downsizing to be followed by cuts at Ford, which has announced plans for an $11 billion restructuring.

“We know there’s more to come,” said Michigan-based Chesbrough, alluding to Ford.

On Monday, Ford said it expected the bulk of the costs connected to the reorganization to come outside of North America, but added that it expected a “headcount reduction” over time in global salaried staff.

Ford is phasing out a series of cars such as the Focus, Fusion and Taurus, while steering funds to pickups, SUVs and other large models, as well as new technology investments.

“These traditional sedans destroy value,” Ford Chief Executive James Hackett told analysts last month, adding that the company would release details about the reorganization “as soon as we can.”

Both companies have announced ventures with other firms, with Ford unveiling strategic alliances with India’s Mahindra and Germany’s Volkswagen and the GM-led Cruise autonomous vehicle venture receiving $2.75 billion in funds from Honda as well as $2.25 billion from Japanese conglomerate Softbank.

Building autonomous vehicles is expected to require billions of dollars in new investment.

Analysts think the US auto giants could eventually be in the market for a deeper transaction with a non-US company, perhaps a full-scale merger.

“The big issue is that this industry still employs a lot of people everywhere around the world and local governments don’t like to see automakers shed jobs,” Colas.

“So it’s going to have to be a very stressful time in the industry before they go to governments and say, ‘Ok, we’ve got to do this.'”

The moves include shuttering seven plants worldwide as the company responds to changing customer preferences and focuses on popular trucks and SUVs and increasingly on electric models. Wall Street cheered the actions, while US and Canadian leaders expressed outrage.

The closures also drew sharp criticism from the US and Canadian labor union representing GM workers, which accused the company of shifting production overseas at the expense of North American workers.

The job cuts from GM’s current 180,000-strong work force will be particularly stinging in politically crucial areas of Ohio and Michigan, a region US President Donald Trump has promised to revive.

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” GM CEO Mary Barra said in a statement.

“We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

Trump expressed dismay at the plan and said he was “very tough” with Barra when they discussed the reorganization.

“I spoke with her when I heard they were closing and I said, ‘You know, this country has done a lot for General Motors. You better get back in there soon,'” he told reporters at the White House. “They better put something else in.”

Barra also met at the White House with Trump’s senior economic adviser Larry Kudlow, in what officials said was a previously scheduled meeting.

Trump’s aggressive trade policies have been aimed specifically at saving US manufacturing jobs, including the renegotiation of the North American Free Trade Agreement, which took aim at rules governing auto trade to favor the US industry.

Still, GM will shutter three North American auto assembly plants next year: the Oshawa plant in Ontario, Canada; Hamtramck in Detroit, Michigan and Lordstown in Warren, Ohio.

In addition, GM will close two US propulsion plants — which produce batteries and transmissions — in Baltimore, Maryland and Warren, Michigan, as well two unidentified plants outside of North America.

The company already had announced plans to cease operations at its Gunsan, South Korea plant.

While the company said in its quarterly earnings late last month that it saw costs jump by $400 million due to Trump’s tariffs on steel and aluminum, a spokeswoman said the latest decisions “are not related to any recent trade or tariff decisions.”

‘Deep disappointment’

Senator Sherrod Brown, an Ohio Democrat, lambasted GM’s move as “corporate greed at its worst” and also took a swipe at the 2017 tax cut favored by Trump which was touted as a jobs winner.

“The company reaped a massive tax break from last year’s GOP tax bill and failed to invest that money in American jobs,” Brown said on Twitter.

In Canada, Prime Minster Justin Trudeau expressed “deep disappointment” with the plant closure.

Workers at the Ontario plant staged a wildcat strike to protest the closure.

The job cuts will include a 25 percent reduction in executive-level employees to “streamline decision making,” the company said.

According to reports, the five North American plants concerned employ nearly 7,000, including 3,000 workers in the Ontario plant.

GM shares jumped after the announcement, closing up 4.8 percent on the day. Analysts were generally upbeat about the news.

“In contrast to times past, General Motors under CEO Mary Barra is trying to get ahead of a potential crisis by making cuts now,” Michelle Krebs of Autotrader said in a client note.

While GM has been increasing its focus on highly popular trucks and SUVs, the company said it would also prioritize investment in “next-generation battery-electric architectures.”

In an investor call, Barra said some GM cars would no longer be available in North America, including the Chevrolet Cruze.

‘Slap in the face’

UAW, the autoworkers union, blasted GM’s decision, saying the company was just looking for cheaper workers, and vowed to fight back.

“This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” said UAW vice president Terry Dittes.

China has become an increasingly important market for the automaker and in the first nine months of 2018, it sold 2.7 million cars in China compared to 2.6 million in all of North America.

However, spokeswoman Julie Huston-Rough denied the charge, telling AFP that “these products will not be manufactured in other locations for the North American market.”

She also said the company remains committed to its facilities in Ohio, despite the closure of the Lordstown plant, with six other locations and 4,000 employees, as well has hundreds of suppliers and dealers.

Jerry Dias, president of Unifor, the Canadian labor union, said he “will vigorously fight again to maintain these good-paying auto jobs.”

Huston-Rough said the job cuts will be accomplished through “a combination of retirements, layoffs and work relocations.”

The American carmaker will showcase its full line-up of Ranger pickup trucks, including the range-topping, off-road and high-performance Ranger Raptor, the Wildtrak, Limited, XLT and the more utilitarian XLS and XL variants.

Ford will also showcase the Mustang sports car and the company’s new Everest range, including the entry-level and fully-equipped Trend, which starts from Bt1.299 million.

Ghosn, in jail since Monday, stands accused of under-reporting his income by millions of dollars and a host of other financial irregularities after an internal Nissan probe following a whistleblower report.

His ouster is an astonishing turnaround for a titan of the auto sector who revived the Japanese brand and forged an alliance with France’s Renault as well as domestic rival Mitsubishi Motors, which sold a combined 10.6 million cars last year — more than any other firm.

It also throws the future of the alliance into doubt as Ghosn was the architect of the far-flung partnership — which employs 450,000 people globally — and the glue holding it together.

“After reviewing a detailed report of the internal investigation, the board voted unanimously… to discharge Carlos Ghosn as chairman of the board,” Nissan said in a statement after the four-hour meeting, not naming a replacement.

But it reiterated that its “partnership with Renault remains unchanged” and that “the mission is to minimise the potential impact and confusion on the day-to-day cooperation” between the firms.

‘Winning cooperation’

The French and Japanese finance ministers also reiterated their “strong support” for the alliance at a meeting in Paris on Thursday.

In a joint statement, Bruno Le Maire and Hiroshige Seko said they both wanted “to maintain this winning cooperation”.

Renault’s board has so far stood by Ghosn — naming his deputy Thierry Bollore to handle day-to-day business.

Bollore on Thursday pledged “to stay focused on our mission to preserve the interests of Renault and the sustainability of the alliance”.

“You can count on my full commitment,” he said in a statement on Twitter.

The board of Mitsubishi Motors was reportedly set to meet on Monday to discuss Ghosn’s future.

Prosecutors intercepted the Brazil-born tycoon Monday as he landed in Tokyo on a private jet, accusing him and another executive Greg Kelly of understating the chairman’s income by around $44 million between June 2011 and June 2015.

His fate as Nissan chairman appeared sealed just hours later as his hand-picked successor as CEO, Hiroto Saikawa launched an impassioned broadside at his former mentor, muttering about a “dark side” to the Ghosn era and urging his sacking.

Even after being jettisoned as chairman, Ghosn remains technically a member of the board as a full shareholders’ meeting is required to remove him.

Nissan said it would study the creation of a “special committee” to take advice from a third party on improving its internal governance and executive pay.

‘Good health’

Ghosn is being held custody in a Tokyo detention centre and has not been seen in public or made any comments since his arrest.

He received a visit from Brazilian consul Joao de Mendonca on Thursday who told AFP that Ghosn “sounded very well, in good health”.

But his conditions are likely to be a far cry from what the millionaire businessman is used to. Inmates at the centre are typically allowed 30 minutes exercise per day and only two baths a week.

Ties and strings are removed to prevent suicide attempts, and former guards and lawyers said Ghosn was almost certain to be held in a cramped cell on his own.

On Wednesday, prosecutors successfully applied to extend his custody for an additional 10 days as they stepped up their questioning.

Deputy chief prosecutor Shin Kukimoto said the type of crime Ghosn is accused of is “one of the most serious types of crime” under Japan’s Financial Instruments Act, and Ghosn could face a fine of 10 million yen ($89,000) and a 10-year prison sentence.

Under the law, companies themselves can also be held accountable for the falsified documents, Kukimoto said, following reports that prosecutors believe Nissan also has a case to answer.

The Kyodo news agency in Japan also reported Thursday that Nissan had paid $100,000 a year since 2002 to Ghosn’s sister who had no record of doing advisory work for the group.

Public broadcaster NHK has reported that Nissan paid “huge sums” to provide Ghosn with luxury homes in Rio de Janeiro, Beirut, Paris and Amsterdam “without any legitimate business reason”.

‘Couple divorcing’

According to the Financial Times, Ghosn’s fall from grace came as he was working on a full-blown merger of Nissan and Renault.

This was opposed by executives in the Japanese firm that has ended up being the most profitable player in the partnership, and the FT said Ghosn’s departure could be used as a pretext to rebalance the alliance in Nissan’s favour.

Analysts said that despite clear tensions between the two firms headquartered 10,000 kilometres apart, neither company has the financial might alone to make the heavy investments in electric vehicles considered to be the industry’s future.

“It would be like a couple divorcing after 20 years — it would be complicated, very expensive and not easy to do,” said Gaetan Toulemonde, an analyst at Deutsche Bank.

“Honestly, I don’t know if it’s even possible.”

The FTI said up to 197,000 cars were manufactured in October, the highest number in 63 months, a 20 per cent year-on-year increase, according to Surapong Paisitpattanapong, vice-president and spokesman of the FTI’s automotive chapter.

The target for this year has been increased from 2.08 million to 2.1 million, up 5.59 per cent over 2017 when total automobile production was 1.988 million. With this year’s target, the export target remains the same at 1.1 million, accounting for 52.38 per cent of the total production target. This marks a decrease of 2.35 per cent – 1.126 million automobiles – compared to last year.

The target for automobiles that are produced to be sold domestically has been increased by 20,000, increasing from the original target of 980,000 to 1 million, accounting for 47.62 per cent of the total automobile production target. The target accounts for the sales boost expected from this year’s Motor Expo, which is expected to sell up to 45,000 automobiles, up from 38,000 last year.

In October, a total of 201,326 motorcycles were produced, up 2.78 per cent year on year. Of the total production, there were 167,314 completely built up (CBU) motorcycles, increasing by 1.91 per cent, while completely knocked down (CKD) motorcycles were at 34,012, up 7.3 per cent. Total motorcycle production from January to October this year was 2.13 million, increasing by 1.67 per cent year on year. Of the total production, 1.724 million are CBU motorcycles, increasing by 0.83 per cent and CKD motorcycles were 405,786 units, increasing by 5.43 per cent.

The total domestic sales of automobiles in October were 86,931, increasing by 26.8 per cent compared to the same period last year. This is because of the growing domestic market, the introduction of new car models by various brands, increased investment and public spending by the government sector, increased private investment, improving economic conditions in the agricultural industry, and a healthy level of tourism.

From January to October this year, total sales of automobiles were 833,515 units, up 20.9 per cent year on year. Meanwhile, motorcycle sales recorded 1.505 million units in this period, down 1.4 per cent year on year.

Exports of ready-made automobiles in October were at 93,338, increasing from the same month last year by 2.75 per cent. Exports of automobiles have increased in almost every market, except the Middle East and Europe, which had a total export value of Bt48.482 billion, down 2.65 per cent year on year.

The total value of automobile exports, including both readymade automobiles, motorcycles, and their respective parts, was Bt793.259 billion, increasing by 1.9 per cent compared to the same period last year.