When GM introduced the Chevrolet Cruze to the market some three months ago, it wasn’t just launching a car, it was trying to change one of its most persistent perception problems. GM managers know that their firm has never built a memorably successful compact car, a fact that was underlined by President Obama’s bailout-era question “why can’t they build a Corolla?” The Cruze was supposed to change all that, but a short three months after its launch, even the hometown cheerleaders at the Detroit Free Press are beginning to wonder if GM is “running out of time to kick Cruze sales into high gear.” After all, the Cruze was just fifth on the C-Segment sales chart last month, losing out to such aging offerings as the Civic, Corolla, Focus and Elantra, all of which are due to be replaced within the next 3 to 12 months. And since the Crue took its time getting to the US market, one analyst concludes

As a result of having been in production two years, it will age more quickly. The relevance in the market is one of the things consumers are willing to pay premium for

This seems to reinforce the conclusion drawn by the WSJ’s Dan Neil who wrote of the Cruze

But I’m sorry to say Chevrolet’s compact car of tomorrow feels more like its car of this afternoon, about 3:48 p.m. This is a car of quickly expiring market advantages.

Last year in October, I predicted that China would overtake the U.S. in car sales in 2009. The comments could not haven been more uncomplimentary. By the end of 2009, China did beat the U.S. 13.6 to 10.4.

A while ago, I cautiously predicted that this year, China would break the U.S. all time record from the year 2000. The comments were far less incredulous this time around, the discussion instead turned into the tired fascist elephants against communist donkeys discourse. Now it is official what the attentive TTAC reader has known all along: China will break the current record of 17.4 million units from 2000 in the U.S. Read More >

Passenger car sales in China jumped 29.3 in November as people rushed to lock in incentives set to expire at the end of the year. Demand will most likely be even stronger in December. In November, the end of the incentives was just a rumor. A few days ago, the end of government handouts became official, and  dealers already ran out of cars. Read More >

Earlier this year we took a look at our rolling 12-month sales totals chart, and found that cars had pulled away from “light trucks” (a category that includes trucks, SUVs, minivans and crossovers), prompting us to proclaim The Great American Downsizing. Well, it turns out we opined too soon. Trucks closed out the Summer strong and went on a tear during the Autumn months, to pull back to parity with their car cousins. And because light trucks are trending upwards faster than cars, it wouldn’t be a surprise to see them finish the year as the better-selling segment. Of course, these numbers aren’t being driven strictly by the old-school utes of yore, although old standbys like the full-sized pickups, the Yukon XL and Ford Expedition are all up by healthy margins. Between old-school utes and the large crossovers that are replacing them, the cars just don’t stand a chance. Hit the jump for car-versus-light truck sales by manufacturer.

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Domestic car sales in India rose 21 percent from a year earlier in November. India is no China yet. But as its per capita GDP has crossed the magical $1000, car sales are waking up with a vengeance. This is one rule I learned in this business, and it never fails. China has more than three times the per capita GDP of India, and you know what kind of a run that caused. Read More >

You-know-what-eating grins in Munich: BMW outsold rivals Audi and Mercedes-Benz around the world last month on strong sales of the new 5er and the new X1 SUV. Read More >

Even the Detroit News, by some regarded as an extension of the Big 3 PR departments, can’t help but ask: “Are Detroit’s new automakers falling back into old habits?”

New automakers? Old habits?

Well, it sure looks like the Big 3 have drastically ramped-up production. Production of good numbers, that is. Especially one of them has been very busy in that department: GM. The General currently has a 95 day supply of cars sitting on dealer lots, up from 76 days in August.

The industry average stands at 67 days, says a Citi Investment Research report. A two month supply is considered normal. What’s more, carmakers are supposed to switch from rich to lean at this time of the year: “With December production poised for a typical seasonal slowdown, inventory should end the year around the 60-day norm,” Citi analyst Itay Michaeli wrote in his report.

GM’s answer? Read More >

Manheim Consulting’s Used Vehicle Value Index shows that used cars have more than recovered from their all-time low of just two years ago, and have hit their strongest levels since 1995. This isn’t wildly surprising, given that weak new car sales over the last two years have boosted demand for less expensive used options. What’s intriguing about the strong growth is that a recovering new-car market doesn’t seem to have dented pre-owned values much in the short term. Manheim’s report notes:

Because the new and used vehicle markets are both monthly payment driven, the important ratio is not transaction prices, but loan-to-value ratios, credit-adjusted APRs, loan maturities, and the resulting monthly payment. Given that new vehicle incentive activity has remained restrained and the model-year changeover was smooth, the monthly payment ratio between the two markets is not as far out-of-line as it has been at some points in the past.

Additionally, although there is waterfall effect that means new vehicle pricing eventually impacts all segments of the used vehicle market, the most effective transmission is through late-model used vehicles, especially those that represent a real substitute to a new vehicle purchase. With the reduction in off-rental units, late-model trade-ins, and early cycle repossessions, nearly-new used vehicles are in short supply. The average mileage on vehicles sold at auction has risen in every market segment over the past two years. And, with significant redesigns and new options, manufacturers have been able to make many models less susceptible to substitution pressure from the nearly-new market.

The significance of this trend: after two years of credit crunch-weakened sales, fleet buyers binged like crazy during 2010, largely fueling the new-car sales turnaround, especially in the early part of the year.  Leasing is back in a big way as well: having fallen to just 9 percent of new car transactions two years ago, they’re back up to 25 percent. As these purchases (not to mention subprime repossessions) work their way back onto the used market, the supply of lower-mileage used cars could well increase, depressing the value of the entire used-car market.

Though the US auto market is up 11 percent this year, Honda’s sales are up only 3.6 percent compared to last year’s weak performance. That means the Motor Company isn’t even keeping up with the growth rates of such maligned brands as Lincoln (+7.4%), Chrysler (+16%) and Mazda (+9.8%). But Team Honda isn’t sweating the details. After all, the Civic and CR-V are nearing the end of their model cycles, while the Accord is a year and a half from its replacement. And, as Honda USA’s Executive VP John Mendel tells Automotive News [sub], at Honda

The debate over Detroit’s bailout was dominated by a narrative that portrayed the automakers as victims of Wall Street excess, and placed blame for their collapse on the frozen credit market. And though the credit crunch certainly hurt GM and Chrysler as well as their customers, Detroit was a victim of the credit crunch in the same way an addict is a victim of his dealer. By leveraging easy credit to fuel the SUV boom which covered for unprofitability in passenger cars (or didn’t, as the case may be), Detroit binged on zero-percent financing as the market road confidently to 16m annual sales. And then, finally, the music stopped and the Domestics crumpled, victims of their own greed, but with a convenient scapegoat in the hated Wall Street bankers. But if the bailout was intended to not only get GM and Chrysler back on their feet but also to prevent future collapses, there’s some troubling news in the offing: subprime auto lending is starting to roar back, and if it goes unchecked, it could reach pre-recession levels in short order…

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China’s car dealers will be mobbed tomorrow, and the run on the lots will last until the end of the year. Shanghai Daily [sub] reports that it is now – semi – official that the Chinese government “will cancel the preferential purchase tax for vehicles with engines under 1.6 liters on January 1 next year.” Shanghai Daily has it from Xiaoxiang Daily News, which heard it from an unidentified official with the National Development and Reform Commission. But it will be enough to incite a stampede to lock in the savings while they last. Read More >

Toyota looks very cautiously into the future. This is the bottom line of an article that just appeared in the Asahi Shimbun (in Japanese. You just have to trust me, or rather Frau Schmitto-san, who provided the translation.) According to the piece, Toyota downrevised its projection for the 2011 fiscal year (starting April 1 2011) to 7.8 million for Toyota alone, excluding Daihatsu and Hino. With those two backed in, total worldwide production of TMC would be around 8.8 million. Meaning: Until further notice, Toyota’s world is pretty much flat. Read More >

Beijingers who shop for a car increasingly find themselves SOL. Dealers report a shortage of cars. Especially scarce: inventories of Volkswagens, China’s largest passenger car brand. “I have to turn to another auto brand for not being able to get a single car of Volkswagen’s for five months,” a customer named Li Guang complained to China’s Global Times. The paper reports delivery times of 3 months for China-made Polos, Sagitars (formerly known as Jetta) and Magotan (known as the Passat B6 in other countries.) Now, Beijing’s car dealers are pouring more oil on the fire. The rumor mill is ablaze with talk that Volkswagen might postpone its car supply to Beijing’s auto market for January next year, because Beijing might launch new car registration limit policies at that time. The result? Read More >

We’ve been following the race for the #1 luxury brand in the U.S.A. for quite a while with rapt attention, and have been predicting all along that it will come down to the wire. It looks even more so after dissecting the November numbers. Or rather after leaving the dissecting to Bloomberg. Read More >

It’s the policy of many automakers that you can’t get through the factory gate unless you drive something made by that company. If recent trends continue, GM’s largest stockholder will have to park outside and walk.

The U.S. government, now owning 33 percent after a pre-IPO 61 percent of GM, bought most of its cars from the competition. Bloomberg had to file a Freedom of Information request with the GSA until they handed over the data. This is what they received: Read More >