China Rolls Out New Green-Vehicle Subsidies and Awareness Campaign

China Bustle and Street TrafficChina’s urban air quality has long been a source of concern for China’s government and citizens, as the country’s relatively environmentally unregulated factories spewed harmful emissions into the air. Now that the country has become the global leader in annual light-vehicle sales—and the number of light vehicles in operation has exceeded 120 million units, more than triple the number from 2000—China’s air quality challenges are an even greater concern.

Early this year, air pollution in China’s major cities, such as Beijing, was so challenging that residents stocked up on face masks and air purifiers. This kind of smog incidence is partly behind several modest programs that China’s government administrators rolled out recently.

These include another incentive program for buying fuel-efficient vehicles and a “No Car Day” campaign to help curb increasing levels of vehicle pollution in large cities, according to news reports in The Wall Street Journal and China Global Times. 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 ›

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 ›

The New Year Begins with Stronger-than-Expected U.S. Auto Sales

1Salesperson and Couple at DealershipJanuary new-vehicle sales in the U.S. market were stronger than expected. Sales climbed nearly 10% due to consumers continuing to trade in their current vehicles (vehicle age in the United States averages 11 years) for new ones or replacing vehicles damaged or totaled during last October’s East Coast Sandy superstorm.

Easier credit and discounts in some segments also made new-vehicle purchases and leases more viable in January. Compacts were still popular, partly due to gas prices beginning to rise again*, and there appears to be a revival in the light-truck segment due to the start of a comeback in the housing industry.

Detroit Three Achieve Double-Digit Sales Gains

It was a good month for Michigan. All three Detroit-based manufacturers—Fiat-Chrysler Group, Ford Motor Co., and General Motors Co.—reported that new-vehicle sales were up in double digits from January 2012. Continue reading ›

U.S. Auto Sales in October Rise Despite Adverse Weather

Despite the destructive path of Hurricane Sandy through the Northeastern states on Monday of this week, automakers in the U.S. market eked out a 7% increase in October light-vehicle sales vs. sales in the same month a year ago. Sales were anticipated to be up by as much as 11% from a year ago before the hurricane struck the East Coast.

Storm damage and loss of power caused many dealerships in coastal states, including New York and New Jersey, to close their doors for several days during the final week of the month, which is when many deals occur. As many as 18 states were impacted by the storm system. Some media reports suggest that Hurricane Sandy’s path cut across an area of the country that accounts for 20-25% of new-vehicle deliveries. Reports also say that the storm system reduced October sales totals by about 100,000 units. A Ford representative told Reuters that the storm cut its monthly totals by 20,000 to 25,000 units.

Volkswagen Posts Best Gains in Spite of Storm

In early reports, all three of the Detroit-based automakers posted gains, with Fiat-Chrysler Group’s Chrysler unit reporting the best increase among them—sales improved by 10% from a year ago. Chrysler Group said it was the company’s best October performance in 5 years. General Motors Co.’s sales were up nearly 5% from a year ago, while Ford Motor Co.’s sales were stable, edging up only a fraction of a point from October 2011. Continue reading ›

Small-Vehicle Demand Bolsters September U.S. Sales

Consumers continued to replace their aging cars and trucks with more fuel-efficient new models in September—especially since higher gasoline prices* helped prime demand for sub-compact or compact new vehicles with smaller engines and even alternative powertrains, in particular hybrids. In addition, discounts on outgoing 2012 models plus excitement about new and redesigned models helped boost sales by nearly 13% from the same month last year.**

Total U.S. new-vehicle sales in September reached 1.187 million units, which translated to a relatively strong 14.9 million-unit seasonally adjusted selling rate (SAAR), according to J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. September’s sales pace was significantly stronger than last year’s 13.1 million-unit SAAR. Continue reading ›

Satisfaction with U.S. Auto Insurance Providers Sets New Record

Jeremy Bowler

Overall customer satisfaction with auto insurance companies has reached an all-time high, mainly due to increases in satisfaction with policy offerings, which are differentiated in the packaging of offerings and discounts advertised, as well as in improvements in billings and payment, according to our 2012 U.S. Auto Insurance Study, which is based on nearly 35,000 responses from auto insurance customers.

At the industry level, satisfaction with auto insurance companies climbs to 804 (on a 1,000-point scale), up 14 points from 2011. Customer satisfaction rises significantly in four of five factors measured, with the largest improvements in policy offerings and interaction with the provider. Satisfaction with price, the fifth factor measured in our study, remains consistent with its score in 2011.

This year’s study finds that 20% of customers have experienced an insurer-initiated rate increase from 2011, with nearly two-thirds (63%) of customers experiencing an increase of $50 or more. Satisfaction among customers whose premiums increased by at least $50 is 735, which is 62 points below the average of those respondents experiencing an increase of less than $50. Continue reading ›

Luxury Brand Competition gets Tougher in China’s Auto Market

Tim Dunne

Luxury brand automakers and dealers operating in China—who discovered their own metaphorical gold mine in the country’s automotive market these past few years—may be starting to find mining their mother lode has become more difficult.

According to LMC Automotive*, sales of luxury vehicles in China have, on a percentage basis, grown faster than the total market in China during the past few years, with 2011’s luxury-vehicle sales totaling nearly 600,000 vehicles, up 30% compared to a year earlier (and much higher than the total industry growth rate of 10% in 2011). A booming economy, rapid individual wealth creation, and a relative dearth of luxury-vehicle inventory from which to choose have created an enviable vehicle seller’s market in China. Dealer gross profit margins on a single vehicle frequently range from US$10,000-US$30,000, according to J.D. Power research. Continue reading ›

Satisfaction Improves the Most among Unbundled Auto Insurance Customers

Jeremy Bowler

For the first time, satisfaction with price is higher among unbundled auto insurance customers than among those customers who have more than one policy with the same provider, according to results in our 2011 U.S. National Auto Insurance Study, which is based on responses from nearly 28,000 auto insurance policyholders.

The overall industry satisfaction index for auto insurance customers who have their homeowners policy with another insurer, or who only have an auto policy, has increased considerably from 2010—up 21 and 26 index points, respectively, on a 1,000-point scale. In contrast, the average index among auto insurance customers who have their homeowners policy with the same insurer increases by just 7 points from 2010. Continue reading ›