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Welcome to 2014! Apparently in Chinese Astrology it’s the year of the “wood horse” but let’s hope this timber pony can canter away and carry the auto industry to continuing sales success. Which brands drove away with buckets of cash and which ones took a tumble down the stairs? Let’s take a peek at last month’s showroom winners and losers.
Overall the market took a small slide in 2014’s first month. January’s inhospitable weather likely kept shoppers at home huddled in front of their heat registers instead of out and about shopping for cars. Compared to the same time period in 2013, new-vehicle deliveries declined three percent to a little more than one million units.
Sales moved in the wrong direction, though fortunately the decline wasn’t severe. Still, a number of automakers did post some welcome gains, though these were offset by others that dropped.
Labor Day is full of wonderful stuff: inflatable gorillas, free hot dogs and enough sheet metal on sale to drown a city in consumer debt several times over.
Auto sales are poised to crack the 16 million mark in 2014, a number that if met will represent the fifth straight year of growth for the American car market.
According to a new study, the 55-to-64-year-old age group is most likely to purchase a new car.
The average fuel-economy value of vehicles sold in July was 24.8 mpg, tying the record high previously reached in March, April, and May.
Now that Detroit automakers have failed to keep Japan out of regional free trade talks, they are hoping that the U.S. will listen to its demand that the auto tariffs are phased out in no less than 25 to 30 years.
Average gas mileage for new-cars has risen to an all-time high in America: 24.8 mpg in May 2013.
Japanese Prime Minister Shinzo Abe announced yesterday that an agreement has been reached with the U.S. that will phase out trade tariffs affecting car and truck imports. The Detroit 3 balked.
Today is the 1st of March and that only means one thing… February is rapidly fading into the rear-view mirror. How well did automakers fare in the second month of the year? Here’s a look at some of the big sales stories from the last 28 days.
For the last four years, new car prices have risen quickly as the U.S. comes out of its recent recession. But a new report shows that new car prices are beginning to level off now that automakers have been disciplined about their discounts and sales incentives.
We are constantly waiting for outfits such as J.D. Power and Associates to tell us which car is the most reliable, but consulting firm 2953 Analytics says that these scores really don’t matter all that much.
June of 2012 marked a good year for automakers, improving sales by 20 percent overall, compared to June, 2011.
While automakers are targeting younger demographics with flashy marketing campaigns, they ought to be appealing to more adult sensibilities because baby boomers make up more than half of the car buying market today.
The average new vehicle sold in March in the United States reached an all-time high of $30,748, up from $28,771 a year earlier.
Even though average car prices are going up, buyer preferences may also be shifting in a non-traditional direction towards smaller and cheaper cars.
Sub-compact and compact car sales, for example, are growing in the U.S. and could largely be attributed to rising gas prices. Boosting the average price of a new car sold could also be the premium that hybrids and EVs are demanding. Regardless, automakers are well aware that buyers are looking at smaller cars and variants such as the upcoming Abarth 500 Convertible are coming to America to satisfy consumer demand.
“It’s not a blip. It’s a trend we’ve been seeing for months,” said Jesse Toprak, TrueCar’s chief automotive analyst. “This might seem counter-intuitive at a time you might expect to see people buying cheaper cars because fuel costs are rising so fast.”
According to data in the report, nearly one in four cars sold in March were in the small car category, compared to December when barely one in six vehicles sold was a small car.
Another contribution to the rising average price of a new car sold is the fact that buyers are willing to add all the available options and upgrades since they plan on keeping their vehicle longer. Buyers are now holding onto their vehicles for an average of 57 months.
Finally, supply and demand are on a more even level now that many automakers have cut production in order to save costs. When automakers had more vehicles sitting on the lots, they were more likely to offer big incentives and discounts to sell cars. Now there is even a shortage of certain models which allows dealerships and to charge markups.
[Source: The Detroit Bureau]
Things aren’t just “made in China” anymore, in fact the country’s surging economy is significantly supporting industries like the luxury car market. BMW, Audi, Mercedes-Benz and more are all aiming their crosshairs at the Chinese economy, hoping it can be the saving angel capable of salvaging growth.
That’s still likely to be the case, though not with the breakneck speed we saw a year ago when light vehicle sales grew 33 percent. China is taking steps to shush their screaming economy by restricting residential property purchases in an effort to avoid a housing bubble. Despite that, IHS Automotive and LMC expect car sales to grow between eight and 10 percent next year.
That growth will be slower thanks to restrictions and disappearing subsidies. The Chinese government removed incentives after 2010 meant to encourage new car buyers into the market while Beijing, this year, imposed a strict quota on new car purchases to cut down on traffic congestion and pollution.
Despite that impediment, Chinese car sales are still expected to grow, which is good news for luxury car makers. Demand for German luxury cars is actually eclipsing the European market, which traditionally consumes the most. With money looking tight across the globe, a 10 percent growth margin is sure to look good for any automaker.
[Source: Automotive News]
With fewer and fewer quality, low-mileage used cars on the market (thanks to slowed production output and reduced sales over the past few years), those who are looking towards saving some money are finding that buying a new car is costing roughly the same as buying a used one. In fact, in many cases, a new car is actually cheaper.
According to Edmunds.com, buying a new BMW M3 costs just $34 a month more than buying a one year old example. It gets even better if you’re looking for a Chevrolet Corvette, as a new model is about $12/month less than a used model.
These are just two examples in an industry that is filled with them. According to chief economist Paul Ballew, as much as 500,000 new cars would be sold to people who would have bought used.
Ballew said: “There’s a substitution effect going on between new and used. When you get those price gaps closing, you get people that are willing to shop new that wouldn’t have before.”
All this is good news for the auto industry, which has taken quite a tumble in the post recession era. Although some companies are still trying to recover, luxury car manufacturer BMW has risen 13% and Mercedes-Benz has also sold 7.3% more cars this year, compared to last. Even the sportscar market has seen a upswing, with a 2.9% growth.
So with car companies putting more effort into shifting new products, if you’re in the market for a car, surprisingly, you might get a better deal on a new one.
In North America, Suzuki does very well as a motorcycle brand, but when it comes to cars, hardly anybody buys them. Many believe, that if Suzuki one day decides to abandon selling cars on this continent, no one will miss it.
In Japan however, it is a different story. Suzuki cars are still very popular there and May 2011 is clear proof of that, since their WagonR was the best selling car in the land of the rising sun.
Suzuki sold 11,186 units of the WagonR, beating the Daihatsu Move and the Honda Fit along the way. It is also the first time in two-years that a ‘mini-car’ has taken the top sales spot in Japan.
Part of the reason could be due to parts availability. Most ‘mini-cars’ (also known as ‘Kei’ cars in Japan) are quite simple and use fewer parts, so production of these vehicles was less effected by the earthquake and tsunami back in March.
Car sales as a whole took a huge tumble in Japan however, as sales dropped by 37.8% this May compared to last year.
2010 was overall a very good year for Volkswagen, but it could have been even better if some of the other brands they own also made a profit.
While Volkswagen had the most successful year in its history, selling 7.2-million units globally and making 7.1-billion Euros along the way, its brands such Bentley, Seat and Lamborghini lost a whole bunch of money last year.
Their British luxury brand Bentley lost 245-million Euros, despite a sales increase of 11% over 2009. Development costs for new models is part of the reason for its poor financial standing.
Their Spanish family car brand Seat had also underperformed. While sales were up 0.8% over 2009, their operational loss amounted to 311-million Euros.
Their Italian supercar brand Lamborghini has been hit very hard due to poor economic conditions worldwide, and while an exact figure is unknown, their sales were down by 14%. This resulted in a decline in revenue by 10-million Euros.
Volkswagen’s CEO Martin Winterkorn however is still upbeat and feels things will turn around. How many of these brands will be in the black this year remains to be seen.
[Source: Automotive News]