New car and light-truck sales in the U.S. market in April were weaker than expected, mainly due to slower fleet sales, according to analysis by J.D. Power and Associates’ Power Information Network® (PIN) and its strategic partner, LMC Automotive. On a bright note, sales of compact crossovers and large pickups in April outperformed the industry’s increase nearly fourfold.
Total sales (retail and fleet) in April edged up 4.3% from a year ago on a selling-day adjusted basis*, and the April seasonally adjusted annual selling rate (SAAR) averaged 14.9 million units—the slowest pace since October 2012. It was the first time in the first four months of the year that the pace dipped below 15.0 million units.
Retail sales were slightly better than anticipated, finishing the month at 1.032 million units, which was an increase of 9.1% from April 2012 on a selling-day adjusted basis. The retail SAAR was 12.1 million units, which was significantly stronger than last April’s 10.6 million-unit pace, and was 100,000 units stronger than the pace in March. Continue reading ›
U.S. light-vehicle sales in April 2013 were set to reach 1.286 million unit sales, which would be up 4% from a year ago on a selling-day adjusted basis,* according to an update from J.D. Power and Associates and its strategic partner, LMC Automotive. The sales rate in April would translate to a slightly lower 14.9 million-unit seasonally-adjusted selling pace.
Early automaker reports indicate that sales (unadjusted) will rise about 9% from a year ago, partly due to higher demand for large pickups and compact crossovers.
The Detroit Three led sales gains with double-digit increases from April 2012. They outpaced two of their top-volume Japan-based rivals—Toyota and Honda Groups. In early results, the third major Japanese automaker, Nissan Group, reported one of the best year-over-year gains—sales were up 23% on an unadjusted basis from April 2012.
Demand was particularly strong for large pickups with improvement in the housing and construction markets. The resilience of the U.S. consumer’s pent-up demand also bolstered sales, according to Jeff Schuster, senior vice president of forecasting at LMC Automotive. He said consumer spending remains remarkably stronger than the economy suggests it should be. Continue reading ›
By 2025, it is likely that more than one-third (36%) of new passenger vehicles in the world market will be equipped with alternative powertrains, according to a forecast from J.D. Power’s strategic partner LMC Automotive. That means that some 30 million of about 110 million passenger vehicles forecast to be sold in 2025 will rely on alternative powertrains and alternative fuels.
A majority of this group of fuel-efficient powertrains (17.5%) are expected to be hybrids—those passenger vehicles incorporating hybrid gasoline/electric powertrains (HEVs) such as the Toyota Prius and plug-in hybrids (PHEVs), which rely on both electric batteries and a gasoline engine, such as the Chevrolet Volt. Plug-in electric hybrids will account for a 5% share and gasoline/electric hybrids will make up 12.5% of the product mix. Only 2.5% of the world’s passenger-vehicle mix will be electric vehicles (EVs), such as the pure electric Nissan LEAF, in 2025. Continue reading ›
The concept of a self-driving system in a car, or what is termed autonomous driving mode, is no longer considered “outside the box” for vehicle owners. In fact, Google’s pilot self-driving vehicles are legal in Mountain View, CA, near Google headquarters. In addition to California, self-driving cars are also now legal in two other states: Nevada and Florida.
We see that awareness of this new technology is higher than a year ago. In spite of a $3,000 suggested market price, we see that “probable” and “definite” interest in equipping an owner’s next vehicle with this new technology is slightly higher, according to the results from our 2013 U.S. Automotive Emerging Technologies Study, than it was last year—21% vs. 20% in 2012.
Both “probable” and “definite” interest in having this emerging technology in an owner’s next vehicle rises to 39% before a market price is introduced.
Interest in some of the other “advanced” emerging technologies takes a back seat to autonomous driving mode when market pricing is introduced. For instance, the percentage of vehicle owners interested in having biometrics (including finger print car locks and stress level monitors for heart rate or blood pressure) in their next vehicle falls from 52% before a price is presented to just 20% after a market price of $350 is shown. Additionally, interest in customizable home screen technology that provides consumers options on information to be displayed on the vehicle’s center stack screen plummets from 72% to just 17% when a $1,250 market price is provided. Continue reading ›
Through the first half of April, retail new light-vehicle sales in the U.S. market remained strong enough to remain in “a healthy holding pattern” with continuing consumer demand to replace aging vehicles, according to a monthly sales forecast update from J.D. Power’s Power Information Network® (PIN) and strategic forecasting partner LMC Automotive.
Retail new-vehicle deliveries in April, which has 25 selling days vs. 24 in the same month of 2012, are anticipated to reach 1.03 million units, which is a 9% increase from 908,685 unit sales in April a year ago (on a selling-day adjusted basis). That translates to a seasonally adjusted annual rate (SAAR) of 12.1 million units, up slightly from 12.0 million units in March 2013, and 1.5 million units stronger than the 10.6 million units in April 2012.
Total new-car and light-truck sales (including retail and fleet) are forecast to rise 7% from a year ago, to 1.3 million units vs. 1.2 million units in April 2012. That represents a 15.2 million-unit SAAR, which matches the March SAAR, but is 1.1 million units stronger than the 14.1 million-unit pace in April 2012. April’s fleet share of total deliveries is projected to be a little larger than a year ago and will account for 22% of total sales. Continue reading ›
General 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 ›
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.
A 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 ›
Three auto retailer owner/operators discussed opportunities and challenges that lie ahead for dealerships today and in the near future, during a one-day New York Automotive Forum jointly sponsored by J.D. Power and Associates and the National Automobile Dealers Association (NADA) that was held before the New York International Auto Show (March 29 – April 7). The following post features dealer views on service business and the outlook for single-point dealerships.
Moderator: Glenn Mercer, Independent Consultant
Earl Hesterberg, President and Chief Executive Officer, Group 1 Automotive, Houston, TX; the fourth-largest public dealership group in the U.S., U.K. and Brazil (142 dealerships)
Jon Lancaster, Retired Toyota/Lexus Dealer, Madison, WI
Wesley (Wes) L. Lutz, Owner, Extreme Chrysler/Dodge/Jeep, Inc., Jackson, MI
What About the Aging Fleet and Service Work?
Glenn: Moving to the “bricks” side of things—service. As was mentioned in an earlier presentation, the average age of the fleet in the U.S. is something like 11 years. The older model—sweet spot for a dealer was 1-5 years old and the independent aftermarket kicks in at 4-9. Now you’ve got a whole slog of cars that are way out there. Are those lost forever—the 17-year-old car? Or at some point do you think you could claw back this increasingly elderly fleet?
Wes: The whole business model has changed. Ten to 15 years ago we were doing 80% warranty and 20% customer pay. It is now 20% warranty and 80% customer pay. So we are learning as an industry how to approach those customers. For years and years, we didn’t have to worry about those customers. We’d come out with a recall and it was wonderful because our shops were busy all day long. We’re getting better at it and we’re getting more competitive because you have to be competitive today with the price transparency on the Internet. Continue reading ›
Honda Group is getting ready to renew its competitive position in India’s passenger-vehicle market by introducing a slew of diesel models, starting with the soon‐to‐be‐launched Amaze sedan and Brio hatchback.What’s notable is that most Honda models will be equipped with a diesel engine. The only exceptions may be the Civic compact car and Accord midsize sedan.
No doubt, Honda expects sales to improve in a big way with the launch of its diesel versions. However, LMC Automotive is more cautious since the government has sent a strong signal towards eventual deregulation of diesel prices in India. Admittedly, India’s government has not announced a price increase in diesel fuel, but it has put the onus on oil marketing companies to raise rates gradually in small proportions to bring them in line with global prices. As a result, the 40% price difference between petrol (gasoline) and diesel will slowly change over the course of the next year.
Diesel Amaze and Brio Hatchback to Launch in India Market
Having said this, we agree that having a diesel option is a must in India. Honda, therefore, is on course to correct a major disadvantage in India. We think combined sales of diesel versions of the Amaze and Brio models could make up about 60% of overall volume. Continue reading ›