S&P Chief Economist, J.D. Power Executive Offer Cautious but Positive Outlooks

Two experts from Standard & Poor’s and J.D. Power offered cautiously positive outlooks for the U.S. economy and for the U.S. auto industry to some 300 auto dealers and industry participants during the recent Western Automotive Conference, sponsored by J.D. Power and the National Automobile Dealers Association (NADA).

Beth Ann Bovino, U.S. chief economist for Standard & Poor’s, said that the U.S. is in its fourth year of recovery with an average growth rate of 2%. On a global level, she cited challenges to be faced including a slowdown in China, the remaining effects of the debt crisis in the Eurozone, and spikes in global oil prices.

In addressing current conditions in the U.S., Bovino said the Fed is focusing on creating jobs and is offering incentives for businesses to invest and hire, which will lead to higher growth. She said there has been robust demand and hiring in the private sector in spite of shocks. Continue reading ›

Third-Party Auto Website Executives Offer Insight on Business Models

Automotive Marketing Roundtable 2013 DSC_4280-SThird-party automotive website executives offered their observations about vehicle price transparency during a panel discussion at the October J.D. Power Automotive Marketing Roundtable (AMR) in Las Vegas, NV. More excerpts from the panel discussion that was moderated by Joel Ewanick, former automotive marketing executive and now managing partner of Global Auto Systems, are highlighted in today’s 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

Joel: You’re very different in how you collect your data—so tell me Seth (Edmunds) why is your data so much better than their data?

 Seth (Edmunds): “I guess we see ourselves across the panel as being least competitive with Cars.com. We respect what they are doing: with the classifieds industry and what they have done in used cars—that’s not really our core space. That might change in the future. I think our biggest differences are with TrueCar and with Kelley Blue Book. . . While we were the company 20 years ago that introduced invoice price, and published it for the first time, we’re actually moving in a completely different direction. . . We are going to have dealers provide actual prices on individual vehicles and then we are going to tell what other people are paying. We have our Price-Promise program, now where you get those actual prices. . . Over the coming months, you’re going to see invoice stripped off behind warning labels where you have to click to get it because we believe that it’s not servicing people anymore and it creates confusion.”

Alex (Cars.com): “Putting a price on a transaction that we know is wildly complex creates distrust in the industry. The expectation that this is the price you are going to pay—is not something that any website [represented] here can actually deliver because so much goes into the pricing at the retail store. We rely on dealer participation to drive that pricing.” 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 ›

Initial Quality in China Sets New Benchmark; Domestics Improve Significantly

Dr. Mei Songlin

China’s domestic brands are improving their initial vehicle quality and are narrowing the gap with international brands, which is reducing the overall problem rate in China to a record low, according to the 2013 China Initial Quality Study (IQS). At the industry level, overall initial quality averages just 119 problems per 100 vehicles (PP100) in 2013, which represents the lowest number of problems since the study was introduced in 2000.

The 2013 China IQS, which examines problems experienced by new-vehicle owners within the first two to six months of ownership, evaluates two general types of problems: design-related problems, and defects and malfunctions. Some 21,181 owners of new vehicles purchased between October 2012 and June 2013 in 46 major cities were surveyed for the study. The overall initial quality score for 2013 is determined by calculating PP100, where a lower problem incidence rate indicates higher quality. Continue reading ›

Thorough Explanations Enhance After-Sales Service Satisfaction in Vietnam

Vietnam01New-vehicle owners in Vietnam prefer to have the type and scope of maintenance or repair work explained prior to their service visit and after the work is completed at the dealer or authorized service center, according to our 2013 Vietnam Customer Service Index (CSI) Study. When a service advisor provides explanations at the beginning and completion of work, satisfaction improves significantly—by 24 points (on a 1,000-point scale). Continue reading ›

J.D. Power Roundtable Speaker Defines “Connected Auto Consumers”

Arianne Walker

Arianne Walker

Today’s digital lifestyle has a growing impact on the auto industry. Understanding how consumers who are in the market for a vehicle are “using digital information and how they are connected,” was a key focus in speeches and discussions at the recent J.D. Power Automotive Marketing Roundtable at the Bellagio Hotel in Las Vegas, NV.

Arianne Walker, senior director of media and marketing solutions at J.D. Power, introduced the October conference with highlights of trends in automotive Internet usage based on J.D. Power research. She also spoke about the rise in digital media consumption and identified how different devices—smartphones and tablets—are being used to gather information mostly at home, but also on the go—smartphones are also used for auto shopping on the dealer lot. Walker also discussed trends in content with social media and video and how traditional companies are reformulating automotive content in new ways. Continue reading ›

October U.S. Auto Sales Revive after U.S. Government Shutdown

Cars on LotDespite the disruption of the 16-day U.S. government shutdown (Oct. 1 – 16), new-vehicle sales climbed in the second half of the month for nearly all automakers. More than 1.205 million new vehicles were delivered in October, according to J.D. Power and its strategic partner LMC Automotive.

October total sales were up 6.4% from October 2012 on a selling-day adjusted basis (there was one more selling day in October 2013 than in October 2012*). However, deliveries were down 9.7% from September 2013. The seasonally adjusted annual selling rate (SAAR) translated to 15.2 million units—a million units stronger than last October’s 14.2 million pace, but slightly below the 15.3 million unit rate in September of this year.

Positive factors that benefited new-vehicle sales in October included declining average gas prices at the pump; continued availability of credit for financing and leasing vehicles—including low interest rates; and a slow but continuing recovery in commercial industries where trucks are needed—such as the energy and housing sectors. Continue reading ›

Small- and Large-Vehicle Segments Poised for Stronger Growth in 2013

Most of the 27 light-vehicle segments in the U.S. auto market achieved year-to-date sales gains through the first three quarters of 2013, according to analysis from J.D. Power and its strategic partner LMC Automotive. Large pickups advanced the most in the first three quarters—sales climbed 19.95% from last year’s same period. Compact crossovers (CUVs) . . . Continue Reading Small- and Large-Vehicle Segments Poised for Stronger Growth in 2013

J.D. Power’s Roundtable Auto Exec Speakers Define New Marketing Strategies

Taking risks in marketing automotive products and basing strategies on rich data to broadcast content across many platforms were just two themes highlighted during speeches, panel discussions and presentations by automotive, marketing and digital experts at this week’s J.D. Power Automotive Marketing Roundtable (AMR) held at the Bellagio Hotel in Las Vegas, Nev.

The Oct. 15-17 conference and networking event was attended by nearly 1,500 auto industry members, including OEM, dealership, search engine, and third-party website leaders. Some 40 corporations, led by Dealer.com and BrightRoll, along with companies such as eBay Motors, Cars.com, Nielsen, Pandora and LinkedIn, helped sponsor the annual comprehensive and future-driven conference. Continue reading ›