J.D. Power Expert Profiles U.S. Auto Market Sales Trends

 J.D. Power’s Deirdre Borrego, vice president, U.S. Client Services, spoke to industry participants at the October J.D. Power Automotive Marketing Roundtable in Las Vegas, NV. about the U.S. auto market’s recovery and the fundamentals in the market that are driving strong demand.

Highlights from her talk include analysis from the Power Information Network® (PIN) and J.D. Power’s strategic partner LMC Automotive:

• Retail sales to individual consumers in 2013 are expected to reach 12.8 million units which is back to pre-recession levels.

• The real story isn’t just about sales growth. It’s also about transaction price growth. We’ve seen exceptional performance with prices (consumer facing prices net incentives) increasing by about $3,000. Continue reading ›

J.D. Power’s King Discusses U.S. Auto Market Shifts at Joint Conference

Thomas King Speaking at S&P ConferenceJ.D. Power’s Thomas King, senior director, Power Information Network® (PIN), recently shared insights on changes in new-vehicle demand in the U.S. market at the Standard & Poor’s/J.D. Power Auto Industry Hot Topics Conference in New York.

Analysts from S&P, J.D. Power, and strategic partner LMC Automotive, presented their views and analysis of the current and future state of the U.S. and global auto industry to an audience of more than 160 Wall Street analysts and reporters. Continue reading ›

U.S. Auto Market Retains Strong Selling Pace and Higher Transaction Prices


John Humphrey

During the first two weeks of June, sales and leasing activity of new cars and light trucks in the U.S. auto market continued to build momentum, according to a monthly sales forecast update from J.D. Power’s Power Information Network® (PIN) and strategic forecasting partner LMC Automotive. Robust demand so far this month is matched by healthy transaction prices, despite weaker premium brand segment sales, partly due to older product lineups that will be revitalized by new model introductions later this year.

Retail new-vehicle sales in June are projected to rise by 14% (on a selling-day adjusted basis*) from a year ago and reach nearly 1.12 million units, which represents a seasonally adjusted annual selling rate (SAAR) of 13.2 million units. The June retail sales pace is up nearly 500,000 units from the past month’s 12.7 million-unit pace and will be up more than 1 million units from the 12.0 million-unit SAAR in June 2012. Continue reading ›

India Automotive Customer Insights are Available on New Website

India Pg Region capture 1This month, J.D. Power Asia Pacific launched an India website to provide insights from automotive customer satisfaction research in one of the largest and most competitive markets in the global auto industry. Passenger-vehicle sales in India are expected to increase 9% this year, to 3.56 million units. India sales are expected to grow 200%, to 9.87 million units, by 2020, according to forecasts from LMC Automotive, J.D. Power’s strategic partner. This would make India the third-largest automotive market in the world, behind China and the United States.

J.D. Power’s India website, which can be accessed at www.jdpower.co.in, provides two destinations: one for consumers seeking product research to help them with their next car or light-truck purchase, and a second section that offers insight and information for automakers who want to understand the latest customer information to make improvements in products and services. Continue reading ›

U.S. New-Vehicle Sales Recovery in Progress with Higher Transaction Prices

Tyson Jominy

Tyson Jominy

As 2012 wraps up, possibly the most important trend for the U.S. auto industry is that new-vehicle sales continue their recovery. Light-vehicle demand continues to increase. Retail sales in calendar 2012 will likely hit 11.74 million units, up from 10.3 million units in 2011. Growth is expected to continue into 2013—our retail sales forecast for next year is 12.25 million units. The forecast assumes that there is a deal reached in Washington, D.C. before the so-called “fiscal cliff” constellation of tax hikes and expenditure cuts are slated to happen at the start of 2013. Three other major trends that we see looking at our Power Information Network® (PIN) data include:

OEM Emphasis on Transaction-Price Growth

While industry sales volumes are increasing, they are still well below the levels recorded in 2004-2007, when annual retail sales were in the 13-14 million-unit range. The primary reason that the industry has not rebounded to these record sales levels is a change in focus among OEMs. Automakers now emphasize strong transaction prices in addition to sales volumes.

This change is evidenced by the record transaction prices that are being earned across the industry. For example, in early 2010, average retail transaction prices were slightly more than $27,000, while at the end of 2012, we have observed average transaction prices approaching $30,000. These strong transaction prices are helping to offset lower volumes, and are driving increased profitability for OEMs. Continue reading ›

A Long Runway for Growth in China and Some Notable Trends

Geoff Broderick

In the coming scramble to win sales in the Tier 2-4 markets and earn profits in China, there is the temptation for OEMs to invest heavily in production, which can result in overcapacity. Discipline must be maintained in China or history will repeat itself—as illustrated by the imbalance of supply and demand in the U.S. market during the past decade. There is likely still more consolidation to come in the global auto market, but there is room for the smart players with solid business and product plans.

In the past five years, the combined vehicle sales market share of the emerging countries—including China and India—grew from less than 20% of the world’s total, to more than 50%. Among all emerging markets, China has one of the longest runways for continued growth based on its low penetration rate (vehicles per 1,000 people), in addition to a growing per capita income and rising disposable income. There also is a real opportunity for a steep takeoff, especially in China’s Tier 2 and 3 urban markets.

China Remains a Pillar in the Global Auto Industry

By 2018, China, the United States, India, Brazil and Russia will be the world’s five largest auto markets in terms of light-vehicle sales, with China as the far-and-away frontrunner at almost double the sales of the United States (30-35 million units vs. 17 million units). Japan, followed by Germany, the UK, Italy and France will round out the 10 largest markets, according to J.D. Power and LMC Automotive Forecasting.*

With closely aligned global supply and demand coupled with improved macroeconomic conditions—albeit slower for Europe—and significant new product introductions and an improvement in available credit—at least in the U.S. market—global sales, led by China (32.9 million unit sales), will boom by 2018 to slightly less than 114 million units.Although China will continue to see an increase in discretionary income, as well as much sales growth fueled from a further penetration of financing and the introduction of leasing, there will likely be intense competition to gain share in Tier 2 and Tier 3 markets. Continue reading ›

Three Trends for Automakers to Consider in Product and Marketing Strategies

Mike VanNieuwkuyk

With new-vehicle quality across the industry being very strong, automakers need to find new ways to differentiate and market their vehicles besides touting how reliable their products are vs. the competition. High quality is a minimum requirement in today’s market, as consumers can choose from many strong alternatives. In fact, not delivering high quality will only eliminate a product from a consumer’s consideration.

At the beginning of 2012, we see some current and future trends in the industry that are crucial for automakers and suppliers to think about in developing their product and marketing plans and strategies. Three are highlighted.  Continue reading ›