White Gains Favor in Early 2013 as Popular Vehicle Exterior Choice

tysonjominy Blog

Tyson Jominy

The Great Recession is over* and the U.S. economy’s slow but reasonably stable return to health may have had a slight impact on the change in exterior color choices among new-vehicle buyers. Neutral color choices still dominate: black, white, silver and gray. But white has gained favor from a year ago, at the expense of other choices—especially in the premium or luxury sales mix.

Although black (21.6%) remains the most popular exterior paint color choice for all model-year new vehicles purchased in the first four months of 2013, white (20.8%) has made inroads this year in comparison to the same 4-month period of 2012, according to Power Information Network® (PIN) retail transaction data** from J.D. Power.

More than one in five new vehicles purchased or leased in the first four months of 2013 was black, and the same was true for white vehicles. However, the percentage of black new vehicles dipped 1.0 percentage points from 22.6% a year ago, while the percentage of vehicles selected with white exteriors rose by 1.5 percentage points from 19.3% in the first four months of 2012. Continue reading ›

British Brands Advance in UK Vehicle Ownership Satisfaction Study

Mark_Lendrich

Mark Lendrich

British automakers have made great strides in the past few years in terms of offering appealing product lines and improved service, which is something they’ve often struggled with in the past. Jaguar, for instance, ranks highest in vehicle ownership satisfaction for a second straight year, according to the 2013 UK Vehicle Ownership Satisfaction Study (VOSS) that is a collaborative effort produced by J.D. Power and What Car?, a website and magazine owned by the Haymarket Media Group in the UK.

In the UK, current forecasts predict that new-vehicle sales will increase nearly 18% during the next five years, according to analysis from our strategic partner LMC Automotive. This puts British brands in a beneficial position to retain current customers and attract new buyers.

The 2013 UK VOSS, which is based on 16,104 online evaluations by original vehicle owners in the UK after an average of two years of ownership, examines customer satisfaction with vehicle and dealer service, based on the evaluation of four key measures. The measures and their weights in the overall index are: vehicle appeal (31%), which includes performance, design, comfort and features; ownership costs (25%), which include fuel consumption, insurance and costs of service/repair; service satisfaction (22%); and vehicle quality and reliability (22%). Continue reading ›

Premium Brands Try Downsizing Strategy in India Market

Ammar Master

The market share of premium vehicles in India is miniscule. However, premium brand automakers are aiming to increase share by building smaller, locally built, lower-priced models. This trend towards downsizing is not new, but it is likely to be more pronounced in India, which is probably one of the most cost-conscious markets in the world. Also, it’s evident globally that luxury vehicle makers have been moving toward smaller-size models for a number of reasons.

Jonathan Poskitt, head of European Sales Forecasting at LMC Automotive, points out, “There are a few important reasons why premiums have been expanding into smaller segments. One has been that premium brands aim to incrementally increase market

share. To do this there was a renewed focus on smaller cars, both by premium brands and the wider market generally, when European Union CO2 legislation became more concrete late in the last decade.”

In addition to what Poskitt has mentioned, regulatory measures are also partly driving the need for more localization in India. In this year’s Budget 2013, India’s Finance Minister raised the import duty for luxury cars to 100%, from 75%. Continue reading ›

U.S. Auto Sales Reach Post-Great Recession High Mark in March

Salesperson and Couple at DealershipSales of new cars and light trucks in the United States may hit their best mark in March since before the start of the Great Recession in December 2007, despite news about the fiscal cliff and sequester in Washington, D.C. Economic news was more positive with better employment figures in March, which is giving car buyers renewed confidence.

 New-car shoppers continued to replace aging vehicles and took advantage of easier credit including low-interest-rate loans. A proliferation of new and refreshed models—including popular crossovers and large pickups—also enticed buyers into showrooms. Discounts on large pickup models that are being replaced by new 2014 models as well as a recovery in the housing sector helped prime the market for large pickups. It should also be noted that March typically is a strong month for the auto business.

 In early reports, J.D. Power’s Power Information Network® (PIN) and its strategic partner LMC Automotive report that automakers sold 1.45 million units in the third month of 2013. If sales are adjusted for one less selling day in March this year, deliveries rose 7.4% from March 2012, which translates to a seasonally adjusted annual rate of 15.2 million units. Continue reading ›

U.S. Light-Vehicle Sales Soften Only Slightly due to Lower Fleets in July

Car and light-truck sales in the U.S. reached 1.152 million units in July, which is an increase of 18% from July last year on a selling-day-adjusted basis.* That translates to a 14.1 million-unit seasonally adjusted annual selling rate (SAAR), and is slightly lower than June’s 14.3 million SAAR (recently adjusted with the revised U.S. Bureau of Economic Analysis (BEA) seasonal factors), but is much stronger than the 12.2 million-unit pace in July 2011, according to data collected and analyzed by J.D. Power’s Power Information Network® (PIN) with LMC Automotive.**

There were two fewer selling days in July this year (24) vs. last year (26), which means that Detroit-based Ford Motor Co. and General Motors Co. actually posted gains from a year ago on a selling-day-adjusted basis, as reduced fleet deliveries in the month impacted their total sales performance. Continue reading ›

A Wide Array of Brands Produce Models that Delight Their Owners

David Amodeo

A baker’s dozen of nameplates produce models that earn the highest scores in their segments in each of the award categories in our 2012 U.S. Automotive Performance, Execution and Layout (APEAL) Study.

Chevrolet receives three of the 22 segment awards—the most of any nameplate in the 2012 APEAL Study—and also the most APEAL awards for the General Motors flagship brand since 1997. Chevrolet models that receive segment awards include two small models and one large pickup: the Avalanche, Sonic and Volt.

Seven more nameplates included in the study each receive two segment awards for models with the highest index scores in their categories. In alphabetical order, the nameplates with top-ranked models in two segments are: Audi, Dodge, Ford, Kia, Mini, Nissan, and Porsche. Also receiving highest-ranking model awards at the segment level for one model each are: BMW, Infiniti, Land Rover, Mercedes-Benz, and Volkswagen. Continue reading ›

Some Unexpected Brands May Gain Sales with Engine Downsizing

Tyson Jominy

As we see new-vehicle buyers and lessees continue to shift from large to midsize vehicle segments and from midsize to small or compact segments, there has been a decrease in the size of engines. In addition, we are seeing that consumers who do not downsize are finding more fuel-efficient powertrain options at the segment and model level, according to our Power Information Network® (PIN) retail transaction data.

Detroit Automakers will Not be Left in the Lurch

An interesting change related to the shift to smaller engines this time around is who is leading the charge, and therefore who will stand to reap the gains. Two Detroit automaker brands, Ford and Chevrolet, are exclusively offering 4-cylinder engines in their freshened midsize cars—Fusion and Malibu, respectively. In addition, Ford offers 4-cylinder powertrains in their midsize crossovers and now offers a V-6 in the F-150 that is selling very briskly. In fact, the Ford EcoBoost powertrain sub-brand is turning out to be one of the early automotive successes of the decade. Continue reading ›

2012: A Year of Transition in China’s Auto Industry

Marvin Zhu

It’s likely that 2012 will be a key transitional year in China’s automotive industry, according to China expert Marvin Zhu, a senior analyst with LMC Automotive who writes for China Automotive Monthly published for J.D. Power Asia Pacific. Zhu offers observations and an outlook for the auto industry in relation to changes in the economy and government programs and policies. He also looks at how foreign and domestic automakers are changing their strategies in a diversifying market.

China’s Growth May Slow to Less Than 9% in 2012 Due to Global Challenges

 The economic environment in China is one of the most critical factors driving the country’s domestic auto market. Faced with both external and internal challenges, China’s GDP growth in 2012 will most likely be below 9%, which would be the lowest level since 2001. At the same time, the global economy is facing its greatest downward pressure since 2008, largely due to the debt crisis in the eurozone, a slow recovery of the US and Japanese markets, and unrest in the Middle East and North Africa. Continue reading ›

Foreign Partners Still Control Branding in China R&D and Lineups

Jenny Gu

Soaring demand for luxury vehicles in China has seen many premium brands make the country their second home. Land Rover may be the next premium brand to begin local production, following on the path taken by Audi, BMW and Mercedes-Benz. Even automakers without a strong foothold in China are increasingly eyeing the country as a key engine for future growth.

Localized Production is Key to Success in China Market

Automakers need to localize in order to truly establish themselves in this market. As some global automakers and their local partners are busy ramping up production of localized luxury models, many other foreign carmakers are seeking Chinese partners, as is required by the government, to set up new joint ventures. Lexus, Infiniti and Land Rover are among those considering localization in China in the near future.

Localization made slow progress before 2009. Between 2005 and 2009, the number of luxury models produced in China rose from just eight to nine. However, in 2010, the number of luxury models that were locally produced climbed to 11, and is expected to reach 15 by the end of 2012. By 2015, we expect 22 luxury models to be locally built, which will mean that those models will account for 60% of luxury sales, up from 56% in 2009. Continue reading ›

New-Vehicle Buyers Perceive Value in Extra Time Spent on Technology Demos

This year, overall satisfaction with the new-vehicle sales experience improves by 13 index points to an average of 648 (on a 1,000-point scale) from 635 in 2010, according to results in J.D. Power’s 2011 U.S. Sales Satisfaction Index (SSI) Study, which is based on responses from more than 24,000 buyers and lessees who purchased their new-vehicle in May 2011.

A likely reason for the double-digit increase in satisfaction is that automakers and dealers are upping their investments and renewing their focus on providing buyers with a more satisfying retail experience. All four buyer factors* measured in the new-vehicle purchase process improve this year from 2010.

The most significant gain this year is in delivery process, despite the fact that the average length of time to complete the delivery portion of a new-vehicle sale has increased by four minutes, to an average of 32 minutes. We find that a major reason for the longer delivery process is the high percentage of buyers (88%) who said they received an in-depth demonstration of technology in their new vehicle (including audio, entertainment, navigation and communication systems), which results in more time spent at the dealership. Continue reading ›