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

Who is the Winner? EVs or Flex-Fuel Vehicles and Biofuel?

bangkok-thailandIn looking at the future of alternative fuel vehicles—principally electric vehicles (EVs)—in the Thai market, it appears that the only push for promoting EVs is coming from the Electricity Generating Authority of Thailand (EGAT). In fact, the only comprehensive study on EV use in Thailand has been conducted by EGAT, which suggests that shifting electricity generation at power plants for use in electric vehicles would improve plant efficiency. However, can this alone be the driving force for consumers to move to purchasing EVs? The answer is an emphatic ‘No.’

Thailand’s Future Energy Plans Focus on Biofuel

A major obstacle in transitioning to EV use in Thailand comes in the form of the government’s Alternative Energy Development Plan (2008‐2023), which clearly shows that planned energy output to serve the transport sector for the next decade will be provided by biofuels, not electricity.

Thailand has an abundant supply of sugar cane, which can be processed into ethanol. Ethanol is an alcohol-based fuel made by distilling and fermenting crops, such as sugar cane, and more experimental sources such as cassava and molasses. Continue reading ›

Hybrid Vehicles Face a Bumpy Road in Southeast Asia

bangkok-thailandThree years ago, Toyota Group began producing and selling the first hybrid model—a Camry—in Thailand. Since then, sales of hybrid cars in that country have grown significantly. In 2012, hybrid sales in Thailand were 19,000 units. Sales of hybrids in Thailand have been growing at an average rate of almost 60% during this time frame. Now, there are at least four hybrid models being sold in the Thai market, and this year hybrid vehicle sales are projected to surpass 20,000 units.

Despite strong and stable growth, a volume of 20,000 unit sales is miniscule in a country where projected sales volume in 2013 is 1.2 million light vehicles. The hybrid vehicle sector accounts for only a 1% share of the entire domestic market (3% of passenger-vehicle volumes). This is very small compared with an 18% hybrid share in Japan, the home market of the key OEMs that have sales operations in Thailand. To be fair, the ratio of hybrid vehicles in Malaysia, a key competitor for regional production of hybrids, amounted to just 2%, or sales of 15,000 units, last year.

Currently, we expect the market share of hybrid cars in Thailand to be under 5% for the foreseeable future. Our projection for hybrid sales in 2020 is slightly over 30,000. In comparison, hybrid vehicle sales in Malaysia are likely to nearly reach 50,000 units by 2020, and will account for almost 10% of that country’s passenger-vehicle market. 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 ›

India’s New Budget May Hamper Local and Foreign Automakers

Much to the chagrin of the auto industry in India, the country’s Finance Minister P. Chidambaram in his 2013 Budget raised duties for utility vehicles (SUVs and MPVs) and fully-imported luxury cars.

India02The changes mean that excise duties for SUVs and MPVs were increased from 27% to 30%, excluding vehicles that are registered as taxis. In addition, India’s government now defines utility vehicles to be over four meters in length (slightly more than 13 feet or 157.5 inches); with 2.5L engine capacity and a ground clearance of at least 170 mm (6.7 inches).

This definition, especially the new criteria for ground clearance, also will subject certain passenger cars, including the Honda Civic and Maruti Suzuki SX4 to the higher duty, while at the same time allowing utility vehicles like Mahindra’s Quanto or Renault’s Duster to be taxed a lower rate.

In preliminary analysis of this change in the taxes, the SUV sales forecast for 2013 may be cut by up to 5%, although the long‐term outlook for the segment remains positive. The only silver lining is that upcoming compact SUVs (of less than four meters) may help offset some of the impact of this new higher excise duty on larger vehicles. Continue reading ›

Consumer Demographics and Preferences are Changing Radically

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John Humphrey

Significant changes in population and other demographics in the United States will affect the automotive industry in the years to come, according to John Humphrey, senior vice president of global automotive at J.D. Power and Associates, in remarks to participants at the recent J.D. Power 2013 International Automotive Roundtable in Orlando, FL, that was co-sponsored with NADA. Humphrey summarized a few of the major changes:

Between 2012 and 2020, the U.S. population will grow nearly 10%—from 313 million to 341 million. Most of this growth will occur in already large markets, with much movement from rural to urban areas. Currently, the most populous U.S. states are California, Texas, New York and Florida, and most of these will experience the most growth in the next decade. This growth trend will have a significant impact on what products OEMs offer in specific markets—in terms of utility, fuel economy, weather conditions—and the retailing strategies needed to attract and retain customers in these markets. Continue reading ›

Western Auto Conference Panel Talks about Mobility—Now and in the Future

Auto industry panelists discuss mobility with Joe White, senior editor, The Wall Street Journal (right) at the NADA/J.D. Power Western Automotive conference.

Auto industry panelists discuss mobility with Joe White, senior editor, The Wall Street Journal (right) at the NADA/J.D. Power Western Automotive conference.

Mobility is a term that has been gaining attention in the auto industry. The current focus is on the viability of alternative vehicles—especially electric vehicles (EVs)—and the future focus explores mobility technology including smarter, semi-self-driving vehicles. Joe White, senior editor at The all Street Journal, led a panel discussion with auto executives and a California dealer principal at the NADA/J.D. Power Western Automotive Conference with an objective to look at mobility and to separate reality from fantasy.

Moderator: Joe White, senior editor, The Wall Street Journal

Panel members:

Al Castignetti, vice president and general manager, Nissan Division, Nissan North America, Inc.

Mark Del Rosso, COO, Audi of America Inc.

John Mendel, Executive Vice President, American Honda Motor Co., Inc.

Peter Hoffman, Dealer Principal, Sierra Autocars, Inc.*

*Sierra Autocars, Inc. is s a family-owned dealer group based in California’s San Gabriel Valley, and includes seven stores and 10 franchises: Acura, Chevrolet, Chrysler, Dodge, Fiat, Honda, Jeep, Mazda, Ram and Subaru.

Panelists’ comments on the need to have a balanced portfolio that includes fuel-efficient vehicles, including those with alternative powertrains, and their ideas about consumer interest in EVs, alternative powertrains and semi-self-driving cars are excerpted.

Joe: Let’s start with the here and now. By 2025 the auto industry’s fleets have to average 54.5 mpg—you are not waiting until 2024 to start this process. How are customers receiving the technology and the engineering ideas that you are putting into the marketplace to move toward that goal?

Al: No car manufacturer is going to get to 54.5 mpg without alternative fuel vehicles—whether it’s electric, fuel cell, or whether it’s natural gas. Nissan is heavily involved in the electric vehicle (EV) and that is one of the platforms moving forward that is going to have a big presence in the auto industry. I would say that from an electric perspective for us, our customers love it. The one limit right now is the range. As the technology expands, and you get greater range from the same power packs, I think it will open up a tremendous audience that isn’t there today. Continue reading ›

Hybrid and EV Sales Charge Ahead in U.S. Market

In August, buyers bought and leased more than twice as many new vehicles with alternative powertrains as they did a year ago, according to transaction data and analysis from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive.

Sales of five hybrid/electric models—including the Toyota Prius hatchback hybrid—and two plug-in hybrid EVs (PHEVs)—including the Chevy Volt—more than doubled to 25,005 unit sales vs. 12,116 a year ago. Through the first 8 months of 2012, four brands offering six models—Toyota, Chevrolet, Nissan, Honda  and Mitsubishi—delivered 187,324 vehicles with alternative hybrid/electric, extended-range electric, and pure electric powertrains, which was a surge of 76% from the same period in 2011 (106,364 unit sales). Continue reading ›

Overall Sales Satisfaction Dips in Japan; Green Vehicle Customers Dissatisfied

Taku Kimoto

This year, fuel efficiency is the most frequently cited factor in choosing a new-vehicle, and is mentioned by nearly one-half (48%) of new-vehicle owners, in our 2012 Japan Sales Satisfaction Index (SSI) Study. That’s up slightly from 46%, just four years ago. In 2008, the factors most often cited in choosing . . . Continue Reading Overall Sales Satisfaction Dips in Japan; Green Vehicle Customers Dissatisfied

Power Up: Hybrid/Electric Vehicles in Southeast Asia

Southeast Asia’s hybrid/electric vehicle market may yet get another boost with the announcement from Honda that it will assemble its Jazz Hybrid in Thailand. Initially, Honda had contemplated assembling the Civic Hybrid in Thailand, but decided that it was not the right business proposition.

The popularity of the Jazz in Thailand means that a hybrid version will potentially do well. We expect the Jazz Hybrid to follow in the footsteps of Toyota’s locally assembled Camry Hybrid, which is slowly gaining sales. Planned for introduction in the first quarter of 2013, we estimate the hybrid version to improve Jazz annual sales by 25‐30%.

Although Honda has been an active participant in the global hybrid electric vehicle (HEV) market with the launch of the original Insight a decade ago, it has taken its time to bring HEVs to Southeast Asia. The Jazz Hybrid will be the third HEV to be built in Thailand, following the rollout of the Camry Hybrid in July 2009 and the Toyota Prius in December 2010. Continue reading ›