Easier Credit Primes July U.S. Double-Digit Retail Sales Rise

John Humphrey

Retail sales in the U.S. auto market got off to a fast start in July. While they’ve slowed as the month has progressed, retail sales in the first 16 selling days are still up 15.1% from a year ago, and July could post the second-strongest retail sales growth rate for the year, according to a monthly sales update developed by J.D. Power’s Power Information Network® (PIN) and LMC Automotive.* Fleet sales are expected to be slightly lower than in other months of the year.

Total light-vehicle sales (retail and fleet) remain stable, with volume in July expected to reach 1.168 million units, which is 20% higher than a year ago on a selling-day-adjusted basis.** That translates to a 14.1 million-unit seasonally adjusted selling rate (SAAR), which matches last month’s SAAR and is significantly stronger than the 12.2 million unit pace in July 2011. Typically, July is a slower month for fleet deliveries, which so far account for 17% of the mix, but is still stronger than the historical July average fleet percentage of 15%. Continue reading ›

Hands-Free Device Owners More Satisfied Despite Problems

David Amodeo

New-vehicle owners and lessees who have hands-free communication devices in their vehicles are more delighted with their vehicle’s audio/entertainment/navigation (AEN) systems than those who do not have hands-free communication devices in their vehicles, according to findings in our 2012 U.S. Automotive Performance, Execution and Layout (APEAL) Study.

This contrasts with results in our 2012 U.S. Initial Quality Study (IQS), in which the audio/entertainment/navigation (AEN) system category, which includes evaluation of hands-free communication devices, has the highest average problem count among all categories analyzed, and is linked to lower vehicle quality. In fact, the number of problems in this category has grown during the past few years, partly due to a higher number of problems reported for hands-free communication devices. Continue reading ›

A Wide Array of Brands Produce Models that Delight Their Owners

David Amodeo

A baker’s dozen of nameplates produce models that earn the highest scores in their segments in each of the award categories in our 2012 U.S. Automotive Performance, Execution and Layout (APEAL) Study.

Chevrolet receives three of the 22 segment awards—the most of any nameplate in the 2012 APEAL Study—and also the most APEAL awards for the General Motors flagship brand since 1997. Chevrolet models that receive segment awards include two small models and one large pickup: the Avalanche, Sonic and Volt.

Seven more nameplates included in the study each receive two segment awards for models with the highest index scores in their categories. In alphabetical order, the nameplates with top-ranked models in two segments are: Audi, Dodge, Ford, Kia, Mini, Nissan, and Porsche. Also receiving highest-ranking model awards at the segment level for one model each are: BMW, Infiniti, Land Rover, Mercedes-Benz, and Volkswagen. Continue reading ›

APEAL Study: Premium, Non-Premium Brands Listen to Consumers

Raffi Festekjian

The bar continues to rise in terms of how gratifying a new vehicle is to own and drive, according to results in our 2012 U.S. Automotive Performance, Execution and Layout (APEAL) Study, which is based on evaluations of more than 80 vehicle attributes by more than 74,000 new-vehicle buyers and lessees during the first 90 days of ownership.

This year, the industry improves by 7 points to earn an overall index score of 788 (on a 1,000-point scale) vs. 781 in 2011. In comparison to past years’ results, the industry average also rises 18 points compared with our 2008 APEAL Study, and represents the largest gain since 2009.

Results across the board are good for the industry. Every one of the 10 vehicle attribute areas analyzed improves from 2011, with the greatest advance being observed in fuel economy. Interestingly, the downsizing trend that we have observed also has had an impact on owner satisfaction with the fuel economy of buyers’ new vehicles. Nearly one-half (47%) of owners say gas mileage was one of the most important factors in choosing their new vehicle, up from 40% in 2011, according to study results. Continue reading ›

Downsizing Doesn’t Require Buyers to Sacrifice Vehicle Appeal

David Sargent

Compact models delight new-vehicle buyers and lessees just as much as some larger vehicles as consumers continue to shift to smaller vehicles in the U.S., according to our 2012 U.S. Automotive Performance, Execution and Layout (APEAL) Study.

Consumers who downsize are not making the sacrifice that they once had to make. In fact, automakers are heavily focused on providing the U.S. market with appealing smaller vehicles and consumers may even be surprised at just how good some of these models are.

In the APEAL Study, it is generally the case that all-new and/or redesigned models perform better than their award segment averages. This year, more than one-half (25 of 41) earn better scores than their award segment averages. Among all-new or redesigned compact or sub-compact models, the all-new Chevrolet Sonic outpaces the Sub-compact Car award segment average by 28 points, while the redesigned Volkswagen Passat surpasses the Midsize Car segment average by 38 points. Continue reading ›

Corporate, Brand, Model-Level Performance: U.S. Auto News in the First Half

Most domestic, European and Asian-based automakers improved their car and light-truck sales in the U.S. auto market during the first six months of 2012 in comparison to the same period in 2011. A few highlights about the market during  the first half of 2012 are summarized below:

• Among the three Detroit-based automakers, Fiat-Chrysler boasted the best share gain, as market share increased by 1.36 percentage points to 11.49% from 10.13% a year ago.

• General Motors Company was still the largest automaker in the U.S. market, although its share of industry sales fell by 1.84 points to 18.13% from last year’s mid-year industry share of just under 20%.

• Detroit-based Ford Motor Co. also lost more than a point of market share this year—its first-half share was 15.55% vs. 16.76% a year ago. However, Ford’s corporate share was slightly higher than Toyota Group’s share.

• Toyota’s three brands gained more than 1.5 points of share to end the first half with 14.41% of industry sales. Toyota’s sales and share gain is based on their recovery from last year’s disastrous challenges with the March 2011 Japanese earthquake and tsunami and Thailand flooding issues that limited supply through much of the year, according to Dave Cutting, senior manager of North American Forecasting for LMC Automotive.**

• Transplants and imports both gained sales in the first six months of 2012 vs. the same period in 2011. Continue reading ›

Car Sales Bolster First-Half Results in U.S. Market

In the first six months of 2012, new-car and light-truck sales in the U.S. climbed 13.4%, to 7.26 million units from 6.32 million units in the same period of 2011 (on a selling-day-adjusted basis).* There were 938,400 more new light vehicles delivered in the first half of this year than in the same period of 2011, according to transaction data collected by J.D. Power’s Power Information Network® (PIN).

Retail sales during the first six months of 2012 improved—up 11.5% from a year ago, and fleet sales were up 20.4% from last year, based on analysis from LMC Automotive** and PIN. In addition, car sales outpaced truck sales this year vs. the same period in 2011.

Volkswagen, Toyota and Fiat-Chrysler Groups outperformed the overall market during the first half, with each manufacturer posting growth in excess of two times the industry average. Continue reading ›

Ford Aims Big with New Thailand Plant

Two years ago, Ford jumpstarted its Southeast Asia sales with the introduction of the Fiesta sedan and hatchback models. The introduction in the second half of 2010 expanded Ford’s annual sales in the region by 81%, up from just 39,000 units in 2010 to 71,000 units in 2011.

Importantly, the Fiesta launch also signaled Ford’s renewed focus to be a prominent manufacturer in a growing region of 500 million people, now more integrated since the ASEAN Free Trade Area (AFTA) became fully functional in January 2010. And the region is moving toward further integration by 2015 under the ASEAN Economic Community (AEC) agreement.*

No doubt China will remain at the core of Ford’s Asia Pacific and Africa operations. However, other emerging markets in Asia, including India and the Asean, are gaining resonance. Continue reading ›

How Subaru Lost its Joint Venture in China

Marvin Zhu

A year ago, Fuji Heavy Industries, as well as several other global carmakers, chose not to locally produce vehicles in China. Fuji Heavy was said to be seeking a local partner to establish a joint venture. According to rumor, Great Wall, well known for its SUVs, was one possible candidate, as Subaru’s most popular model in China is also an SUV—the Forester.

Beijing Auto (BAIC) was also closely linked because the company needed to expand its product portfolio to compete against other state‐owned giants, such as SAIC, FAW and Dongfeng. In addition, some smaller players—such as Huatai,Youngman and several others— were also mentioned.

However, it was eventually revealed that Chery was the last remaining company in the running to partner with Subaru. A JV would use Chery’s new plant in Dalian to make the first model, which was likely to be the Forester. Chery could learn a lot from Subaru’s engine technology, and might even develop a new brand based on the new technology.

Unfortunately, according to a recent announcement from Fuji, the company has dropped plans to manufacture vehicles in China, after failing to secure the Chinese government’s approval for a joint venture. Since then, Fuji Heavy cut its global sales targets and instead decided to increase its manufacturing capacity in the United States and in Japan. Continue reading ›

CSI Snapshot: How Do Customers Prefer to Schedule Service Appointments?

Chris Sutton

Interestingly, there’s a perception that customers would rather drop by the dealership without making an appointment, particularly given today’s emphasis on customer service and convenience. Yet, our 2012 Customer Service Index (CSI) Study finds that, contrary to popular belief, a majority, or 73% of customers, actually prefer to call ahead for an appointment, while 10% prefer to schedule an appointment online. Just 17% of service customers indicate they prefer to drop by the dealership without an appointment.

Our customer feedback supports the focus on and importance of formalizing the visit and avoiding the “just bring your vehicle in” message. During the past 5 years, we’ve even seen a slight decline in the percentage of customers dropping by the dealership, from 26% to 23%, and we’ve seen a slight increase in the percentage of customers who prefer to schedule their service appointment online. Continue reading ›