August U.S. New-Vehicle Sales Move Ahead with Gusto

AIS04 car shopperAugust was another month of stellar new-vehicle sales in the U.S. auto industry. In early reports, all three Detroit-based automakers celebrated double-digit gains at the end of a month that was capped off by the Labor Day sales weekend. The three major Japanese automakers posted even stronger double-digit increases than their U.S. rivals. Nearly all multi-franchise automakers reported better sales in August this year vs. 2012.

Consumers continued to replace their aging vehicles—averaging 11 years old—at a healthy pace that matches a monthly forecast update from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. Easier credit terms, including long-term loans and more reasonable lease deals, helped spur sales.

Total sales (retail and fleet) reached 1.5 million units for a selling-day adjusted increase of 12.7% from August 2012—the highest unit sales volume since May 2007. J.D. Power projected that the seasonally adjusted annual selling rate (SAAR) would surpass 16 million, which it did.
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Consumer Demographics and Preferences are Changing Radically

JohnHumphrey good shot03

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 ›

J.D. Power’s Humphrey Remains Bullish on China Auto Market

John Humphrey

John Humphrey

The Chinese automotive industry has received a lot of buildup over the past several years related to the strength of the economy, and the potential of the market, according to John Humphrey, senior vice president of global automotive at J.D. Power and Associates. In a presentation at the recent J.D. Power and Associates 2013 International Automotive Roundtable in Orlando, FL, Humphrey discussed the outlook for China.

China’s Economic Strengths May Outpace Risks

Industry forecasters* are expecting vehicle sales in China to reach 21 million units in 2013, up 10% from the 19.1 million vehicles sold in 2012. China was able to withstand the recession of 2008-2009, and actually grew quite aggressively during that period due to government incentives and stimulus. On the whole, China was far more effective in dealing with the recession than was the U.S. market, and that has pushed the industry ahead.

Going forward, the potential for China remains substantial. In the past, China’s success has been export-driven. In the future, there will be economic growth inland to the Tier 2, Tier 3 and Tier 4 cities, and there will be a shift towards increased domestic consumption that will bode well for light-vehicle purchases. In terms of risk, environmental concerns remain a great one, especially air and water quality. On top of this, vehicle gridlock in many of the Tier 1 and Tier 2 and Tier 3 cities has been a problem for some time, and is not easily solved in a short period. 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 ›

Large Pickups and Cars Remain Best-Selling Models in 2012

2012 Ford F-150 SVT RaptorThe Ford F-Series and Chevrolet Silverado LD and HD versions were the best-selling models in the U.S. auto market in 2012. Together, more than 1 million of these two truck models were sold last year. In addition, another truck, Chrysler Group’s Ram pickup (LD and HD) ranked seventh among all models sold, with deliveries of more than 293,300 units.

On the car side, the Toyota Camry, which was redesigned for the 2012 model year, remained the top-volume car and best-selling midsize sedan in the U.S. market. It also was the third-best-selling model overall in 2012, with sales of more than 404,000 units. Two additional redesigned-for-2013 midsize sedans—the Honda Accord (No. 4) and Nissan Altima (No. 6)—were among the 10 best-selling models in 2012. Continue reading ›

Diesel New-Vehicle Owners Are More Satisfied in India APEAL and IQS Studies

Mohit Arora

Mohit Arora

New-vehicle owners of models powered by diesel engines are, on the whole, more satisfied with their new vehicles than are owners of conventional gasoline-powered new vehicles, according to results in both the 2012 India Automotive Performance, Execution and Layout (APEAL) Study and the 2012 India Initial Quality Study (IQS).

In our recently released 2012 India APEAL Study, the gap in satisfaction scores between owners of diesel- and gasoline-powered vehicles has changed significantly during the past 4 years. In 2009, the average index score among owners of gasoline-powered vehicles was 3 points higher than among owners of diesel-powered vehicles. However, in 2012, the APEAL average index score is 22 points higher among owners of diesel vehicles than among owners of gasoline vehicles. In addition, overall satisfaction among owners of diesel-powered vehicles averages an APEAL index score of 839 (on a 1,000-point scale)—which is 24 index points higher than among owners of gasoline-powered vehicles (815). Continue reading ›

Vehicle Interior is a Major Driver of New-Vehicle Satisfaction in India

Mohit Arora

Mohit Arora

Satisfaction with the vehicle interior has the greatest impact on how delighted and gratified India’s new-vehicle owners are with their new vehicle during the first two months of ownership, according to our 2012 India Automotive Performance, Execution and Layout (APEAL) Study.

The study finds that during the past 4 years, the impact of the vehicle interior on overall satisfaction has increased consistently, especially in the two fastest-growing vehicle segments in India—small car (which includes entry compact, compact and premium compact cars) and utility (including MUV/MPVs, SUVs and vans). The vehicle interior factor has increased by 52 index points in comparison to performance in 2009.

Although visibility and driving safety followed by fuel economy continue to be the leading drivers of satisfaction among new-vehicle owners in India, we see that vehicle interior, among the 10 performance categories evaluated, is a major differentiator for customers when it comes to satisfaction with their vehicle, especially since they interact and spend the most time inside their vehicle. Continue reading ›

Early September Retail U.S. Sales Pace Remains Robust

John Humphrey

After a strong close over the Labor Day weekend (Sept. 1-3), retail light-vehicle sales in September maintained a relatively healthy pace through the first half of the month. However, sales are expected to level off through the rest of September—but still will rise 12% from September 2011, based on a monthly forecast update from J.D. Power’s Power Information Network® (PIN) with strategic partner LMC Automotive.*

Through the first 14 selling days of the month, retail car and light-truck sales increased 15% from a year ago, reflecting a healthy market, although we expect retail sales to level off through the remainder of the month. Retail deliveries are projected to reach 952,200 unit sales, which translates to a seasonally adjusted annul rate (SAAR) of 11.8 million units, which is up by more than 1 million units from September 2011, but lower than August’s 12.6 million-unit retail sales pace. Continue reading ›

A Little More About Ford, Lincoln and Global Plans

Tim Dunne

Several readers have asked Tim Dunne for more insight about Ford Motor Company and its planned Lincoln launch in China after reading his post  “Lincoln in China: Observations from our China Expert.” Our Asia expert has put together pertinent highlights from J.D. Power research, sales analysis and studies to provide an even better perspective of Ford’s current path and progress in the U.S. that may add insight about the company’s recent decision to introduce its Lincoln luxury brand in China in 2014:

Ford Motor Co.’s U.S. auto sales last year were up 17% from 2010, surpassing 2 million units. I think Ford has some momentum in small and medium cars, which is something we haven’t seen from Detroit automakers in many years. I also saw a recent headline that said Ford believes the Focus (hatchback, sedan and wagon) could become the best-selling car in the world, surpassing the Toyota Corolla. “The Blue Oval sold 489,616 Focus models worldwide in the first six months of this year putting it nearly 27,000 ahead of the Corolla,” said a post on the Road & Track blog. Continue reading ›

Downsizing Doesn’t Require Buyers to Sacrifice Vehicle Appeal

David Sargent

Compact models delight new-vehicle buyers and lessees just as much as some larger vehicles as consumers continue to shift to smaller vehicles in the U.S., according to our 2012 U.S. Automotive Performance, Execution and Layout (APEAL) Study.

Consumers who downsize are not making the sacrifice that they once had to make. In fact, automakers are heavily focused on providing the U.S. market with appealing smaller vehicles and consumers may even be surprised at just how good some of these models are.

In the APEAL Study, it is generally the case that all-new and/or redesigned models perform better than their award segment averages. This year, more than one-half (25 of 41) earn better scores than their award segment averages. Among all-new or redesigned compact or sub-compact models, the all-new Chevrolet Sonic outpaces the Sub-compact Car award segment average by 28 points, while the redesigned Volkswagen Passat surpasses the Midsize Car segment average by 38 points. Continue reading ›