Clean Diesel Makes Inroads in the U.S.; Sees Slowdown in Europe

Tim_Dunne

Tim Dunne

As clean diesel powertrains become more prevalent and popular in the U.S. market, especially in VW and Audi brand product lineups sold here, it appears that diesels are becoming less attractive in the world’s largest diesel market: Europe, according to a recent article, “Are Diesel Cars in Europe Starting a Long Slow Decline?” in Green Car Reports as well as J.D. Power research.

The current reduction in diesels in Europe may be mainly due to new regulations that have been passed by the EU and/or are being considered in individual European countries.

As recently as 2012, the diesel share in the European market was 46.0%, according to Mike Omotoso, senior manager of global powertrain at LMC Automotive, J.D. Power’s strategic partner. In 2013, LMC Automotive projects the diesel share to edge down by slightly more than 1 percentage point to 44.9%, and the outlook for 2014 is for a 44.0% diesel share in Europe—down 2 points from 2012. Continue reading ›

Building Loyalty, Improving Service are Keys to Satisfaction in Germany’s Auto Market

Mark_Lendrich

Mark Lendrich

In light of a less-than-robust outlook for new-vehicle sales in Germany during the next few years, automakers and dealers need to focus on loyalty, awareness of crucial factors that influence the purchase decision, and they need to improve service business, according to our 2013 Germany Vehicle Ownership Satisfaction Study (VOSS), a collaborative effort with AUTO TEST, the magazine in Germany for readers planning to buy a new car.

In 2013, overall satisfaction among owners of one- to three-year-old vehicles in Germany averages 789 points (on a 1,000-point scale). In the 2013 study, vehicle appeal, which accounts for 27% of the index weight, and ownership costs (25%) are the two key drivers of overall satisfaction. The remaining two factors evaluated and their weights are: vehicle quality and reliability (24%); and service satisfaction (23%). 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 ›

British Brands Advance in UK Vehicle Ownership Satisfaction Study

Mark_Lendrich

Mark Lendrich

British automakers have made great strides in the past few years in terms of offering appealing product lines and improved service, which is something they’ve often struggled with in the past. Jaguar, for instance, ranks highest in vehicle ownership satisfaction for a second straight year, according to the 2013 UK Vehicle Ownership Satisfaction Study (VOSS) that is a collaborative effort produced by J.D. Power and What Car?, a website and magazine owned by the Haymarket Media Group in the UK.

In the UK, current forecasts predict that new-vehicle sales will increase nearly 18% during the next five years, according to analysis from our strategic partner LMC Automotive. This puts British brands in a beneficial position to retain current customers and attract new buyers.

The 2013 UK VOSS, which is based on 16,104 online evaluations by original vehicle owners in the UK after an average of two years of ownership, examines customer satisfaction with vehicle and dealer service, based on the evaluation of four key measures. The measures and their weights in the overall index are: vehicle appeal (31%), which includes performance, design, comfort and features; ownership costs (25%), which include fuel consumption, insurance and costs of service/repair; service satisfaction (22%); and vehicle quality and reliability (22%). Continue reading ›

One-Third of Vehicle Mix to Feature Alternative Powertrains in 2025

Tim_Dunne

Tim Dunne

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 ›

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 ›

Record Smog Levels Cause China to Incentivize EVs; Consumers Not Convinced

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Lorraine Wang

Smog in China hit record levels in the past month. Dubbed the “airpocalypse” by local media, smog levels are becoming a major health and economic problem for the country. On a recent day, pollution levels in some of China’s largest urban areas were 30 times higher than levels considered safe by the World Health Organization (WHO), according to media reports.

Local governments in Shanghai and Beijing are moving forward to mandate electric vehicles (EVs) for government fleet vehicles and for taxis, according to a recent blog post in The Wall Street Journal. More government initiatives and incentives are being considered as China takes baby steps to transition from vehicles powered by internal combustion engines (ICEs) to more electric vehicles (EVs).

In the Journal post, China expert Michael Dunne said that Beijing already offers free license plates and a $19,000 rebate to private EV buyers. In the last week of February the UK’s Guardian newspaper reported that Shanghai traffic police have been given nasal filters in a pilot program to help them withstand the city’s smog. 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 ›