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 ›

Tesla Plans to Enter China Luxury Car Market Later this Year

Tim Dunne

Tesla is building its first electric car store in Beijing, China, in spite of two major challenges: a very limited charging infrastructure and intense competition in the luxury segment from Audi, BMW and Mercedes-Benz.

The new Tesla “lifestyle store,” which is slated to open later this year, is located in an exclusive . . . Continue Reading Tesla Plans to Enter China Luxury Car Market Later this Year

J.D. Power International Roundtable Provides Future Industry Outlook

HumphreyJ

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 ›

January’s Strong U.S. Retail Sales Pace Adds Clout to 2013 Auto Forecast

HumphreyJ

John Humphrey

Retail new-vehicle sales in the U.S. market were robust in the first half of January, averaging a seasonally adjusted annual rate (SAAR) of 12.9 million units, which would be the highest retail pace in the month in five years and some 2.0 million units stronger than in January 2011, according to a sales update created by J.D. Power’s Power Information Network® (PIN) and LMC Automotive.

The retail sales pace, which outperforms the calendar-year forecast of 12.4 million units for 2013, seems to build on the recovery of the industry during the past two years and remains on a path to return to near pre-recession levels within the next few years. Retail sales should reach 812,600 units, which is significantly ahead of 682,171 unit sales in January 2011.

Total light-vehicle sales, which include retail and fleets, are projected to surpass 1.027 million units—up 8% on a selling-day-adjusted basis from January 2012. The fleet share is likely to account for 21% of deliveries, which is lower than 25% in 2012. This sales forecast translates to a 15.0 million-unit pace, up from 13.9 million units in January 2012. Continue reading ›

Brazil Vehicle Ownership Satisfaction Rises Despite Impact of Higher Ownership Costs

Jon Sederstrom

Overall satisfaction among new-vehicle owners in Brazil, which is the world’s fifth-largest country in population and geographic size, improves by 8 points from last year to an average index score of 751 (on a 1,000-point scale), according to our 2012 Brazil Vehicle Ownership Satisfaction Study (VOSS).

The increase in overall owner satisfaction in Brazil could be partly due to the entrance of more brands in the market in addition to more model choices than ever before. At the brand level, it was the second straight year that Toyota is the highest-ranking brand in the study. Toyota is followed in the rankings by two new entrants: South Korea’s Hyundai and Kia brands. Continue reading ›

New Duty will Likely Not Impact Chinese Consumers Who Want Luxury Imports

Tim Dunne

I appreciated recent comments from one of our readers, Tim S. from Wisconsin, about a post “New China Duty Only Impacts Makers of Vehicles with Larger Engines” on the minimal impact of a new duty that has been imposed by the Chinese government on cars imported from the U.S.

I want to address some of the reader’s questions and concerns.

First, what percentage of vehicles with larger engines are produced in China by General Motors and Ford? Between GM and Ford, approximately 99% of the vehicles they produced in China in 2011 were fitted with sub-2.5-liter engines.

As for GM and Ford vehicles that are exported to China from the U.S., I would guess (the data is not readily available) that nearly the opposite is true, and that nearly all are fitted with engines greater than 2.5 liters. But let’s put things into perspective: In 2011, GM and Ford built and sold nearly 1.6 million vehicles in China, but their combined exports to China from the U.S. were only some 35,000 vehicles (or a ratio of 50-to-1 of locally built vs. imported vehicles.) Continue reading ›

Collaboration on Green Car Technologies Makes Good Sense

David Sargent

Earlier this month, BMW and Toyota Groups announced that they will work together to develop lithium-ion batteries for electric and hybrid cars. In addition, BMW will supply diesel engines to Toyota in Europe. Officials from both automakers signed a MOU at the Tokyo Auto Show for mid- to long-term collaboration on next-generation environment-friendly technologies.

The cost of new powertrain technology is very high and so it makes sense for automakers to form alliances in order to share development costs. This is especially so when the two automakers concerned have complementary strengths. BMW produces some of the most highly regarded diesel powertrains, which have been extremely successful in Europe. In turn, Toyota is a clear leader in electric and hybrid powertrains. Therefore, the agreement seems to make a lot of sense. Continue reading ›

Ford Drops Hybrid Choice in New 2013 Escape

Mike Omotoso

Ford Motor Company plans to show its 2013 Escape at the Los Angeles Auto Show in November with some powertrain changes. The next-generation compact crossover (CUV) model will offer three engine choices—all 4-cylinder options—and there will be no hybrid version or V-6 engine option.

The 2013 Escape will be equipped with a 2.5-liter, 4-cylinder naturally aspirated engine as the base engine. Ford also will offer a 1.6-liter EcoBoost engine and a 2.0-liter, turbocharged, direct-injection EcoBoost engine in the new Escape. Ford still plans to offer a hybrid powertrain, but it will be in the 2012 C-Max. Continue reading ›