U.S. Auto Sales Climb in November as Total Pace Surpasses 16 Million Units

John Humphrey

John Humphrey

Through the first half of November 2013, sales returned to a stronger pace than in September and October—which were hampered by negative external factors, including the U.S. government shutdown in October and the pull forward of Labor Day sales with two less selling days in September—according to an auto sales forecast update from J.D. Power and strategic partner LMC Automotive.

Retail new-vehicle deliveries in November are expected to reach 1.03 million units—up 4% from November 2012 on a selling-day adjusted basis*. This figure translates to a 13.0 million-unit seasonally adjusted annual selling rate (SAAR), which is higher than the year-to-date level of 12.8 million units.

Fleet sales on a selling-day adjusted basis are expected to account for 16% of the sales mix in November, which is 3% lower than a year ago and consistent with the low fleet share that has held throughout 2013. Continue reading ›

Marketing Exec Leads Internet Site Panel in Discussing Price Transparency

Price negotiation for most consumers is often described as one of the most arduous parts of the purchase process, according to Joel Ewanick, managing partner of Global Automotive Systems, Inc. The former GM chief marketing officer led a panel discussion about “Vehicle Price Transparency” with four third-party website executives at the October J.D. Power Automotive Marketing Roundtable (AMR) in Las Vegas, NV. Excerpts from the panel discussion are highlighted in this post.

Moderator: Joel Ewanick, managing partner, Global Auto Systems, Inc.

 Panel Members:

Seth Berkowitz, president and COO, Edmunds.com

Larry Dominique, executive vice president, TrueCar, Inc.

Jared Rowe, President, Kelley Blue Book

Alex Vetter, senior vice president, Cars.com

Third-Party Website Leaders Define Business Models

Joel: I see that companies like yours are trying to help the consumer through the process. Can you explain what you do, what your business model is, and then we’ll start to compare and contrast?

Seth (Edmunds): “At Edmunds, we’re working through a major transition. For years, we’ve been an information and pricing authority. We probably have the largest repository of automotive information on the Internet with somewhere in the neighborhood of 3.5 million pages of content. We’ve decided that being this comprehensive encyclopedia of automotive information isn’t enough. . . We’ve decided to make car buying easier. We are going to do this by fostering trust—which is at an all-time low— between consumers and dealers.” Continue reading ›

J.D. Power Expert Profiles U.S. Auto Market Sales Trends

 J.D. Power’s Deirdre Borrego, vice president, U.S. Client Services, spoke to industry participants at the October J.D. Power Automotive Marketing Roundtable in Las Vegas, NV. about the U.S. auto market’s recovery and the fundamentals in the market that are driving strong demand.

Highlights from her talk include analysis from the Power Information Network® (PIN) and J.D. Power’s strategic partner LMC Automotive:

• Retail sales to individual consumers in 2013 are expected to reach 12.8 million units which is back to pre-recession levels.

• The real story isn’t just about sales growth. It’s also about transaction price growth. We’ve seen exceptional performance with prices (consumer facing prices net incentives) increasing by about $3,000. Continue reading ›

J.D. Power’s King Discusses U.S. Auto Market Shifts at Joint Conference

Thomas King Speaking at S&P ConferenceJ.D. Power’s Thomas King, senior director, Power Information Network® (PIN), recently shared insights on changes in new-vehicle demand in the U.S. market at the Standard & Poor’s/J.D. Power Auto Industry Hot Topics Conference in New York.

Analysts from S&P, J.D. Power, and strategic partner LMC Automotive, presented their views and analysis of the current and future state of the U.S. and global auto industry to an audience of more than 160 Wall Street analysts and reporters. Continue reading ›

Reliability and Price are Key Priorities for Mexico’s New-Vehicle Owners

Gerardo Gomez

New-vehicle owners in Mexico say the most important reasons for choosing their car or truck are a vehicle’s durability and reliability and its purchase price, according to our 2013 Mexico Vehicle Ownership Satisfaction Study (VOSS). Fuel efficiency is the third most important, according to the study.

The 2013 Mexico VOSS, which is based on responses from 5,497 vehicle owners in major auto markets throughout Mexico, finds that consumers want extra assurance that their vehicle will be dependable. More than one-half (60%) of owners say their 2011 and 2012-model year vehicles are covered by the original manufacturer’s warranty. Another 16% of owners say their vehicle is covered under an extended warranty, and 9% say their vehicle is covered under a pre-paid service agreement.

Price is particularly important to Mexico’s vehicle owners since, on average, the purchase price of a new vehicle may be equal to 1-2 years of disposable household income. In addition, the average annual price of insurance may be high for many consumers in Mexico—sometimes it may be equal to as much as a month’s salary. Continue reading ›

Urban Shift Impacts India New-Vehicle Shopping Behavior

Mohit Arora

Mohit Arora

During the past five years, demographic differences in India and urban shifts have been creating distinctive regional shopping behaviors as well as different regional ownership experiences among new-vehicle buyers, according to our 2013 India Escaped Shopper Study (ESS).

A few of the major regional changes that J.D. Power Asia Pacific observes in the study that examines the reasons why new-vehicle shoppers consider but ultimately reject certain models in favor of another are highlighted:

• There has been a regional surge in first-time new-vehicle buyers mainly in the Eastern and Western regions of India. Nearly 70% of buyers in the Western region and 57% of buyers in the East are purchasing a new vehicle for the first time.

• In contrast, the percentage of first-time new-vehicle buyers in the Northern region has declined while the first-time buyer percentage has remained flat in the South. Continue reading ›

August May Be Best U.S. Retail Sales Month Since 2006

HumphreyJ

John Humphrey

The robust pace of auto sales during July in the U.S. market has continued through the first half of August, according to a monthly sales forecast update from J.D. Power and strategic partner LMC Automotive.

August new-vehicle sales may reach the highest level in seven years—since before the Great Recession (December 2007-June 2009). Additionally, J.D. Power anticipates that consumer spending on new vehicles in August will be close to $36 billion, which would be the highest level on record.

Retail new-vehicle deliveries are set to reach 1.27 million units for the month, which is up 12% from August 2012, based on analysis of retail transaction data during the first 15 selling days of the month.* This translates to a seasonally adjusted annual selling rate (SAAR) of 13.1 million units, which means that this would be the third straight month that the retail SAAR has averaged above 13.0 million units. In comparison, the retail SAAR in August 2012 was 12.6 million units. Continue reading ›

What Dealers, OEMs Can Do to Offset Sluggish Market in India

MohitArora

Mohit Arora

A slowing economy in India is creating more pressure on the country’s auto industry. In light of dimmer economic conditions, Mohit Arora, director and country manager at J.D. Power Asia Pacific, discussed the outlook for India’s dealerships and auto sales in a column in India’s Businessworld magazine. Excerpts from the column titled “Is it All Doom and Gloom at Car Dealerships?” are highlighted in this post:

Economic Front

A slowdown in GDP growth, industrial production and a decline in the value of the rupee against the U.S. dollar have observers jittery about India’s future growth prospects. Anticipated increasing pressure on inflation from higher fuel costs also is expected to negatively impact household expenses. It’s not surprising, then, that the automotive industry is feeling the pressure, with year-over-year new-vehicle sales down in double digits as fewer consumers visit their local showroom to buy a new vehicle.

What Do Dealers Anticipate?

Recently, we asked more than 600 auto dealers in India about their business and how satisfied they were with the support they were receiving from the manufacturer. The results from the J.D. Power Asia Pacific 2013 India Dealer Satisfaction with Automotive Manufacturers Index  Study (DSWAMI) showed that one in five dealers expected to report a loss in the financial year (2012-2013), which is up from 9% in the previous year. In addition, less than one-half (44%) of dealers anticipated that they would make a profit—down from nearly two-thirds (62%) in the prior year. Continue reading ›

Sales Satisfaction in Taiwan Remains Flat Even with Market Inducements

TaipeiWEBA majority (85%) of new-vehicle buyers in Taiwan indicated that they received discounts on price, and a higher percentage of buyers also received free accessories and extended warranties from their selling dealer this year compared with 2012, according to our 2013 Taiwan Sales Satisfaction Index (SSI) Study. At the same time, sales satisfaction in 2013 averages 890 points (on a 1,000-point scale), which is unchanged from 2012.

Inducements appear to be more popular this year as new-vehicle sales declined during the first half of the year, mostly driven by an uncertain economic climate, which caused customers to defer their purchase and wait for price cuts and possible government incentives. This year, satisfaction with the deal, one of the seven factors* contributing to satisfaction with the new-vehicle purchase and delivery experience that are examined in this study, has increased the most—up 12 points from 2012. Continue reading ›

Exceptional Service Advisors May Lead to Higher Satisfaction with Dealer Service in the Philippines

manila-trafficNew-vehicle owners in the Philippines this year put more importance on personal interaction and having exceptional service advisors as a first point of contact at the dealership, according to our 2013 Philippines Customer Service Index (CSI) Study.

The study, which measures overall customer service satisfaction among more than 1,800 vehicle owners who visited an authorized service center for maintenance or repair work during the first 12 to 24 months of ownership, finds that overall satisfaction with service at authorized dealerships improves by an average of 4 points in 2013 to 832 (on a 1,000-point scale) vs. last year. Continue reading ›