Quiet Cars Influence OE Tire Satisfaction in Japan Market

Vehicle owners in Japan expect the tires that come with their vehicle from the factory to be perfect and without problems, according to our 2013 Japan Original Equipment Tire Customer Satisfaction Index Study. As vehicles become quieter, especially hybrids and electric vehicles, owners become more sensitive to noise and vibrations caused by their vehicle tires—a problem that is more prevalent than traction and handling issues.

The 2013 study, which examines problems that owners experience with their original equipment (OE) tires in the Japan market, finds that the two most frequently experienced problems owners have are pebbles or stones getting caught in the tire tread and road and vibration noise, which negatively affect ride, quietness and, ultimately, tire satisfaction. Continue reading ›

Initial Quality in Japan Rises with Improvements in Fuel Efficiency

japan map-72Overall initial quality of new vehicles in Japan  improves slightly from 2012, partly due to improvements in engine and transmission performance, including fuel efficiency, according to our 2013 Japan Initial Quality Study (IQS), which is based on responses from 11,210 new-vehicle owners after the first two to nine months of ownership.

Overall initial quality averages 100 problems per 100 vehicles (PP100) in 2013, which is slightly better than 101 PP100 in 2012. Although the incidence of defect/malfunction problems increased in seven of the nine factors measured ( 2.4 PP100 increase), the number of design-related problems—such as windows fogging, transmission, excessive fuel consumption—declined by 4.7 PP100 from 2012. Continue reading ›

Shorter Delivery Times in Japan Increases Sales Satisfaction Levels

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Taku Kimoto

Customer satisfaction with the new-vehicle sales experience in Japan has improved as delivery times are nine days shorter on average than in 2012 when there were longer delays in delivery due to the initiation of an eco-car subsidy program, according to our 2013 Japan Sales Satisfaction Index (SSI) Study.

This year, the average time for delivery to buyers of non-hybrid vehicles declines to 28 days from 34 days in 2012, and the delivery time for hybrids drops by 23 days and averages 50 days instead of 73 days. Among Japan’s domestic brands, Toyota—the largest seller of hybrid vehicles in Japan—and Honda, which had its production in 2012 negatively affected by flooding in Thailand, achieve notable reductions in delivery times. Continue reading ›

U.S. Auto Sales Reach Post-Great Recession High Mark in March

Salesperson and Couple at DealershipSales of new cars and light trucks in the United States may hit their best mark in March since before the start of the Great Recession in December 2007, despite news about the fiscal cliff and sequester in Washington, D.C. Economic news was more positive with better employment figures in March, which is giving car buyers renewed confidence.

 New-car shoppers continued to replace aging vehicles and took advantage of easier credit including low-interest-rate loans. A proliferation of new and refreshed models—including popular crossovers and large pickups—also enticed buyers into showrooms. Discounts on large pickup models that are being replaced by new 2014 models as well as a recovery in the housing sector helped prime the market for large pickups. It should also be noted that March typically is a strong month for the auto business.

 In early reports, J.D. Power’s Power Information Network® (PIN) and its strategic partner LMC Automotive report that automakers sold 1.45 million units in the third month of 2013. If sales are adjusted for one less selling day in March this year, deliveries rose 7.4% from March 2012, which translates to a seasonally adjusted annual rate of 15.2 million units. Continue reading ›

Will Asean Become Major Market for Parts Makers in India and China?

Ammar Photo

Ammar Master

The realization of the Asean Economic Community in 2015* presents opportunities and challenges in the changing automotive landscape of the Southeast Asian region.

Foremost, a successful Asean integration will support the long‐term goal of creating a region with free movement of goods, services, investment, and skilled labor, in addition to a freer flow of capital. This in turn is likely to lead to faster economic growth and an ever‐expanding middle class.

May Arthapan, director of Asia Pacific forecasting at LMC Automotive in Bangkok, indicated in an aptly titled recent presentation that Asean could well become “Another BRIC in the Wall,”** given the region’s emergence in Asia. Not only are there opportunities for vehicle makers to expand sales in a big way, but component makers also are going to benefit from increasing manufacturing activity in Asean countries, led by Thailand and Indonesia.

Japan’s Suppliers Have Long-Term Presence in Southeast Asia

Japan’s component makers have had a long-established presence in the Asean countries, and will clearly be the biggest beneficiaries. However, there are also opportunities for companies in India and China. These companies have been eyeing the Asean region as a new market for a while. This has been evident from increased participation, especially by companies in China, at Asean region trade shows.Yet, component makers from both nations have been wary to enter unfamiliar territory and face strong Japanese competition. Continue reading ›

J.D. Power’s Humphrey Remains Bullish on China Auto Market

John Humphrey

John Humphrey

The Chinese automotive industry has received a lot of buildup over the past several years related to the strength of the economy, and the potential of the market, according to John Humphrey, senior vice president of global automotive at J.D. Power and Associates. In a presentation at the recent J.D. Power and Associates 2013 International Automotive Roundtable in Orlando, FL, Humphrey discussed the outlook for China.

China’s Economic Strengths May Outpace Risks

Industry forecasters* are expecting vehicle sales in China to reach 21 million units in 2013, up 10% from the 19.1 million vehicles sold in 2012. China was able to withstand the recession of 2008-2009, and actually grew quite aggressively during that period due to government incentives and stimulus. On the whole, China was far more effective in dealing with the recession than was the U.S. market, and that has pushed the industry ahead.

Going forward, the potential for China remains substantial. In the past, China’s success has been export-driven. In the future, there will be economic growth inland to the Tier 2, Tier 3 and Tier 4 cities, and there will be a shift towards increased domestic consumption that will bode well for light-vehicle purchases. In terms of risk, environmental concerns remain a great one, especially air and water quality. On top of this, vehicle gridlock in many of the Tier 1 and Tier 2 and Tier 3 cities has been a problem for some time, and is not easily solved in a short period. Continue reading ›

J.D. Power International Roundtable Provides Future Industry Outlook

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John Humphrey

After a successful 2012, the outlook in 2013 for the automotive markets in the United States and China remains optimistic, according to John Humphrey, senior vice president of global automotive at J.D. Power and Associates. He gave projections for the global auto industry during a presentation at the recent J.D. Power 2013 International Automotive Roundtable in Orlando, FL. Some 500 auto industry members—including dealers, marketers and executives from automakers—attended the one-day conference that was co-sponsored with the NADA. Some highlights from the presentation:

Auto Sales Shift to Emerging Markets

In 2013, the global automotive industry faces a somewhat mixed economic bag; the average GDP of mature markets will grow at about 1.4%, while the world’s largest emerging markets will grow by 5.5%, on average.*

Clearly, the United States and China are the bright spots to watch in 2013 and thereafter, in terms of sales and production potential. That said, there are pockets of overcapacity in the global industry that need to be addressed. In 2012, total global capacity for light vehicles reached 116 million units, against total global sales of 81 million units. This roughly translates to a utilization rate of 70%—well below the 80% threshold that most automakers need to reach to achieve financial breakeven. While utilization rates can vary widely by market—and impact the health of individual industries—the overall rate for the global industry can positively or negatively affect automakers with global operations.

Looking toward the end of the decade, the global automotive industry is plainly being driven by the largest emerging markets. In 2012, Asian markets accounted for 41% of the 81 million light vehicles sold globally—primarily China and India. By 2019, Asian markets will account for 49% of the 115 million vehicles forecast to be sold globally.

Continue reading ›

World Auto Sales Set for Modest Gains in 2013

Global Auto Forecast After a 5% gain in global light-vehicle sales to 81 million units in 2012, the world outlook for 2013 from our strategic partner LMC Automotive is for slower expansion, with global sales rising by 3% to 83 million units this year. While some large markets performed solidly in 2012—notably the United States and China—the key macroeconomic risks that prevailed during 2012 look likely to persist well into 2013 with negative implications, and an unbalanced risk profile, for Europe. Regional variations will continue this year, according to Pete Kelley, managing director of LMC Automotive.

Some forecast highlights are featured from a recent issue of China Automotive Monthly—Market Trends:

More Favorable Economic Outlook to Boost China Sales in 2013

China light -vehicle sales (including imports) rose by 6.2% to 19.1 million units in 2012 from 2011, which was higher than the annual growth rate of 4.4% in 2011 vs. 2010. This advance was largely due to the phase‐out of the pay‐back effect from booming car sales in 2009-2010, and in particular the surge of the light commercial vehicle sector. Continue reading ›

Global Light-Vehicle Market Grows in 2012 Despite Troubles

GlobalAutoForecasting_imageThe global light-vehicle market remained stable in the final month of 2012 and overall deliveries rose about 5.5% on a selling-day-adjusted basis. For the 2012 calendar year, world vehicle sales reached nearly 81 million units, up from 76.7 million in 2011, which represents a 5.2% improvement.

Particularly noteworthy advances were observed in the U.S. auto market, Japan and in China, while weak sales continued to play out in Western European countries. That region has been dealing with a major financial crisis, severely impacting as many as eight of 17 nations in the euro bloc.

Lower vehicle sales in Europe, which accounts for nearly as many unit sales as the U.S. market, foreshadow a likely slowdown in global expansion to between 2% and 3% in 2013 from 2012—even with China’s growth and gains in emerging markets, according to analysis from J.D. Power’s strategic partner LMC Automotive. Continue reading ›

Japanese Models Receive Seven Segment Awards; Chinese Models Garner Three Awards in 2012 China Vehicle Dependability Study

Models from three Japanese manufacturers receive seven awards in the 11 award segments, according to the J.D. Power Asia Pacific 2012 China Vehicle Dependability StudySM (VDS). Three of the Japanese models are Toyota brand models. Three Chinese domestic brand models also are among the most dependable models in their respective segments. Among European brands, . . . Continue Reading Japanese Models Receive Seven Segment Awards; Chinese Models Garner Three Awards in 2012 China Vehicle Dependability Study