Brands with High SSI Scores in China Lead in Sales Rates, Volume

Mei Songlin

Dr. Mei Songlin

Among 53 mass market and luxury automotive brands* included in our 2013 China Sales Satisfaction Index (SSI) Study, the 10 nameplates with the highest-ranking performances in sales satisfaction account for a 40% share of retail auto sales in the China market, which is a good indicator of how important it is to deliver an exceptional customer sales experience.

Overall sales satisfaction among new-vehicle owners during the first 2 to 6 months of the ownership experience averages 649 points (on a 1,000-point scale) in 2013. There is no comparison to last year’s results since the SSI Study has been redesigned and also now separates luxury and mass market brand segments. Satisfaction in the luxury segment averages 665 points while the mass market segment average is 647 points.

The 2013 study, which is based on responses from 14,462 new-vehicle owners, evaluates five factors that make up the new-vehicle purchase experience: delivery process; sales initiation; deal; dealership facility; and salesperson measures. Continue reading ›

Chinese and U.S. EV Makers Face Good News and Challenges

EVSymbolIn recent months, several China-based electric vehicle makers have been making headlines with announcements of new EV contracts in the U.S. market, while several U.S. EV makers, based in California, have been facing new challenges.

Additionally, in May, Tesla Motors made an offer to raise capital and also paid off its government loan, while Fisker Automotive may have another chance to survive with news of a possible purchase bid from several suitors.

Meanwhile, Chinese vehicle maker BYD Automotive Co., which boasts Warren Buffet as a major investor, recently signed a contract in the United States with the city of Long Beach in California to build 10 electric buses at a former RV facility in nearby Lancaster, CA. This arrangement allows BYD (Build Your Dreams) to take advantage of buy-American subsidies for electric vehicles and public transportation. BYD reportedly has made 1,000 electric buses, most of which operate in China, and has completed a pilot program with Hertz, according to the company. Continue reading ›

Will Europe be a Gold Mine for Chinese Exports?

CarPortChina’s car exports to other countries rose by more than 40% in 2012, which has been an excellent stimulus for Chinese carmakers in the slowing domestic market. A number of local automakers are relying heavily on exports. Lifan, for example, exported 67,000 passenger vehicles in 2012, which accounted for 43% of its total sales.

Chinese carmakers mainly focus on markets in South America, the Middle East, Russia and Eastern Europe. Some domestic automakers have tried to tap into mature markets. The brand MG, which was originally a British brand and is now owned by China’s SAIC, however, managed to sell only 782 cars in the UK in 2012.

Nevertheless, many Chinese brands have announced ambitious strategies for overseas development to further explore mature markets, especially countries in Western Europe. Continue reading ›

SUVs Continue to Sell in China Despite Smog Concern

Tim_Dunne

Tim Dunne

The best-performing segment in China during the first quarter of 2013 was the SUV segment, which saw sales surge by 43% from the same quarter in 2012. New product launches added momentum to demand in this category. As mentioned in an earlier post, total passenger-vehicle sales rose 14% during the same period.

SUVs accounted for nearly one-fifth (19%) of the first-quarter sales volume in China, according to analysis from our strategic partner LMC Automotive.

In general, bigger is always better in China, as size implies power, prestige and influence. Chinese consumers also like the high seating and extra room that SUVs provide, and China’s middle-class consumers see SUVs as a safer option on the country’s less than ideal roads, says China auto analyst Michael Dunne in a recent article in The Wall Street Journal.

New fuel-efficiency regulations enacted by China’s government to curb air pollution are based on the weights of vehicles. But these new rules include easier targets for heavier vehicles, which may be an incentive for manufacturers to build more SUVs. This same sort of situation happened in the U.S. market during the ’80s and early ’90s when fuel-efficiency standards were not as strict for heavier vehicles. Continue reading ›

Premium Brands Try Downsizing Strategy in India Market

Ammar Master

The market share of premium vehicles in India is miniscule. However, premium brand automakers are aiming to increase share by building smaller, locally built, lower-priced models. This trend towards downsizing is not new, but it is likely to be more pronounced in India, which is probably one of the most cost-conscious markets in the world. Also, it’s evident globally that luxury vehicle makers have been moving toward smaller-size models for a number of reasons.

Jonathan Poskitt, head of European Sales Forecasting at LMC Automotive, points out, “There are a few important reasons why premiums have been expanding into smaller segments. One has been that premium brands aim to incrementally increase market

share. To do this there was a renewed focus on smaller cars, both by premium brands and the wider market generally, when European Union CO2 legislation became more concrete late in the last decade.”

In addition to what Poskitt has mentioned, regulatory measures are also partly driving the need for more localization in India. In this year’s Budget 2013, India’s Finance Minister raised the import duty for luxury cars to 100%, from 75%. Continue reading ›

First-Quarter Passenger-Vehicle Sales in China—Better than Expected

China-02China’s passenger-vehicle sales ended the first quarter with a double-digit gain from the same quarter a year ago, mainly due to new product launches, increases in luxury or premium brand sales, in addition to dealer incentives, based on analysis and data from J.D. Power’s strategic partner LMC Automotive.

A 14% gain in passenger-vehicle sales to 1.43 million units during March bolstered first-quarter totals. First-quarter light-vehicle sales in China rose by 15% from the same period in 2012 to 5.44 million units.

SUVs and Luxury Cars Create Enthusiasm in China Market

The best-performing segment in China during the quarter was the SUV segment, which saw sales surge by 43% from the same quarter in 2012. New product launches added momentum to demand in this category. Continue reading ›

J.D. Power’s President Discusses Good News for China’s Auto Industry; Presents Awards

 

Executives from 14 of China’s automakers attended a J.D. Power Asia Pacific presentation and awards ceremony in Shanghai. Finbarr O’Neill, president of J.D.Power and Associates (center) spoke at the event.

During the past decade, the auto industry in China has achieved exponential sales growth and also has made significant strides in improving . . . Continue Reading J.D. Power’s President Discusses Good News for China’s Auto Industry; Presents Awards

GM’s JV Brands Set March and First-Quarter Sales Records in China

GM-China-HQGeneral Motors and its joint venture operations in China set all-time sales records in the largest passenger-vehicle market during March and through the first quarter of 2013, according to the company. March deliveries rose nearly 13% from a year ago to 290,538 unit sales. It was the second-highest monthly sales tally in GM’s history in China. Its first-quarter total sales in China also rose nearly 10% from last year to 816,373 units.

In related news, GM also outsold Volkswagen Group in China for the first time in the past three quarters, thanks to increased demand for Buick vehicles, according to news reports. China’s auto manufacturers group said that VW’s growth surpassed the overall passenger-vehicle market in China during the first quarter but its increase in March was not as strong. Continue reading ›

Battery Capacity is Only One Hurdle in Promoting EVs in China

In 2009, four of China’s ministries launched collaborative energy-saving and New Energy Vehicle (NEV) promotion programs, identifying 25 pilot cities to participate in the programs. The cities included Beijing, Shanghai, Chongqing, Hangzhou, and Shezhen.

China-02A year later, in May of 2010, the four Ministries* issued a subsidy policy for private alternative energy vehicles. This subsidy is based on battery capacity at a rate of RMB 3,000 RMB (US $484) per kWh. Buyers of plug‐in hybrid cars will receive up to RMB 50,000 (US $8,070.50) in subsidies, and as much as RMB 60,000 (US$9,6840.60 will be given to buyers of pure electric vehicles.

The pilot cities also launched their own “new energy” development plans to provide further local incentives based on the subsidies of the four ministries in order to reach a target of 53,000 NEV sales before the end of 2012. Continue reading ›

J.D. Power’s O’Neill Sees Industry Revival with Rosier Sales in the U.S. Market

AutoForum- Fin O'Neill 1New-vehicle sales in the U.S. market have already recovered by more than 10% annually since 2010, Finbarr O’Neill, president of J.D. Power and Associates, said in remarks this week at the company’s 2013 Automotive Forum. The conference was sponsored with the National Automobile Dealers Association (NADA) at the Grand Hyatt Hotel in New York City before the New York International Auto Show* press briefings this week.

Total U.S. sales of cars and light trucks this year should surpass 15.3 million units, which is up from 14.4 million unit sales in 2012, O’Neill confirmed. He also said that new-vehicle sales are projected to surpass 16.4 million units by 2015.

O’Neill also told industry participants at the conference that retail light-vehicle sales are solid and increasing while the daily rental market and fleet sales are well under control, which is very different from the mid-2000 period, when manufacturers relied too heavily on discounts and fleets. At the same time, he said that J.D. Power’s data finds that the average transaction price of a new vehicle has increased by $3,500 since that period. Credit is looser, and leasing has risen to 23% of the sales mix, based on data collected by J.D. Power’s Power Information Network® (PIN). Continue reading ›