What is the difference between the November U.S. car market and my wife? The answer is: None. Edmunds says the U.S. annual sales rate for new vehicles in November will be essentially flat from the prior month. Read More >
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China sold more cars last year than Volkswagen built Bugs in nearly 30 years. This year, China will make, sell and buy probably more than 17m cars, and Volkswagen owns a good chunk of that market.
Sou Weiming, vice president of Volkswagen Group China (and himself an import from Singapore) said VW sold 1.6 million units in China in the first ten months and unless the sky will drop, they will have sold 2 million by the end of the year. Read More >
Bloomberg reports that the General Services Administration has increased the percentage of hybrids in its fleet purchases from about one percent to at least ten percent since President Obama took over. And you better believe that the government isn’t buying the same hybrids that American consumers are.
The U.S. government buys hybrids almost exclusively from Ford and GM. It bought only 17 Prius models and five of Honda’s Civic hybrids in the past two years. Chrysler Group LLC stopped making hybrids in 2008 after about two months of production.
The government purchased about 64 percent of GM’s Chevy Malibu hybrid models and 29 percent of all Ford Fusion hybrids manufactured since Obama took office in 2009, the data show. GM stopped making the Malibu hybrid in 2009 after lack of consumer demand. GSA also bought about 14 percent of Ford Escape hybrids.
According to Bloomberg’s math, a quarter of the hybrids built by GM and Ford since Obama took office have been purchased by the government. And the fleet buys weren’t cheap… for taxpayers or the automakers.
GM was the first automaker to experiment with new-car sales on Ebay, in a grand experiment that resulted in an undisclosed number of sales (estimated at between 20 and 50 actually sold through eBay). GM’s Mark LaNeve insisted at the time that the program led to sales not logged through Ebay, but then he was booted from GM about a week after GM’s Ebay experiment fell apart. Which makes Tom Loveless, the head of Kia’s US sales operation a brave man; with only this single, discouraging precedent, Bloomberg reports that Kia is diving into Ebay sales… and unlike GM, it’s not limiting the experiment to California.
Because success in the auto industry depends upon both the buildup of industrial might and deft maneuvering on the winds of fashion, analysts often struggle to determine how business decisions impact consumer choice. For example, GM and Chrysler long resisted the pressing need to file for Chapter 11 bankruptcy protection because their leaders believed that Americans would not buy a car from a bankrupt firm, and that sales would go into an irrecoverable tailspin if they filed. Needless to say, that assumption proved to be deeply flawed, and sales during the GM and Chrysler bankruptcies barely dipped (if only compared to the miserable months preceding bankruptcy). In any case, the rating agency Moody’s is taking on the challenge of translating good business news into sales by arguing [via Bloomberg]
U.S. consumers who don’t know anything about over- allocation options or the need for strong liquidity in a cyclical industry knew that something exceptionally good happened to GM last week. That knowledge makes it more likely that they will consider buying a GM vehicle and possibly buy one. That’s good for the company’s credit quality.
But does the general air of positivity surrounding the IPO actually make a difference with consumers?
Forget about Europeans complaining about missing parts. Over in America, there is an acute car shortage. Dealers blame who they always blame: The manufacturers. “They’ve cut back production so much that we’ve run out of cars,” Boston dealer magnate Herb Chambers tells his hometown paper, the Boston Herald. He says he had to “beg, borrow and steal” Cadillacs from dealers in other parts of the country. Down at the South Shore, dealer Dan Quirk loses 60 to 90 sales a month. “The Big Three just don’t have enough manufacturing capacity any more,” kvetches Quirk. “Some of the automakers, particularly General Motors, closed a lot of their plants when the meltdown hit.” Supposedly it’s not just a Bostonian phenomenon. Supposedly. At closer look, it might be a fire breathing, rip-snorting chimera. Read More >
EV startup skeptics that we are, we’ve been keeping a jaundiced eye on Coda ever since we realized the $45k Chinese EV “makes the Volt look good.” Along the way, the news has mostly been of the “lightly dusted with pathos” variety… right up until the firm lost its CEO just months before launching its car. Now the pathos is starting to stack up in deep drifts. Automotive News [sub] reports that the firm has delayed the launch until the second half of next year in order to “build buffer time into the schedule.”
According to the firm’s new interim CEO, the delay is not being caused by problems with its electric sedan, and that former CEO Kevin Czinger “remains an important part of this company.” So, why the delay, and why no specific launch date? This is not a good sign, especially because if Coda wanted a chance at survival it had to get into the market before the major OEMs. A year from now, Nissan and Chevy will be battling for EV customers, and Ford will just be launching its Focus EV. The window of opportunity for a marginal player to sell a $45k electrified Chinese sedan in any numbers will have passed.
As the global auto industry becomes ever more competitive, the pressure to deliver a high volume of products and sales per platform is driving companies to develop mega-platforms that underpin millions of global sales units. And sorry folks, but mass market cars aren’t going to become less homogeneous any time soon… in fact PriceWaterhouseCooper’s Anthony Pratt took a look into his magic crystal ball recently, and he forecasts that in just over five years, a mere ten platforms will account for over 27 million units of global sales volume. It’s just the next step on the way to the ultimate dystopia: a world in which every new car in the world is identical under the skin. Spooky! Hit the jump for more details on the (projected) top ten platforms of 2016.
New car registrations in the 27 countries of the EU crashed by 16.6 percent to 1,027,036 units in October. That according to the latest statistics of the European manufacturer organization ACEA. The year looks a bit better: In the first 10 months, demand for new cars has decreased by 5.5 percent, totaling 11,279,542 new vehicles registered. Read More >
If there’s a maxim the auto industry can take to the bank, it’s this: focus wins. Knowing a brand’s advantages and maintaining a laser-like focus on them is the way to win in the car game, and it’s a lesson Hyundai has clearly learned. Over the last several years, Hyundai has caught the media’s attention by moving into the luxury and coupe segments with its Genesis, but the real offensive is still coming. The redesigned Sonata was the tip of the spear, giving Hyundai a top-notch competitor in the all-important D-Segment, and next up are similarly improved versions of the Elantra and Accent. These three models have been some of Hyundai’s most enduringly successful nameplates, and as this graph proves, they’ve been responsible for much of the brand’s recent sales growth. They’ve even maintained decent momentum towards the end of their model lifes. With the new Tucson replacing the Santa Fe as Hyundai’s top-selling crossover, Hyundai has been able to maintain a competitive crossover nameplate for several years now, but even the hot CUV segment likely won’t provide as much juice to Hyundai sales as the redesigned Elantra and Accent. Meanwhile, Hyundai’s entries into the luxury and sporty space seem to have amounted to little more than a distraction… the lurking danger for every automaker.
Nick Taylor’s layman’s observations of American cars in China are a great first impression view. But first impressions can be deceiving. It is true that the Chinese auto market is very much similar to the U.S. market. They love 3 box “real cars” (trend recently shifting a bit), they love SUVs, they love big cars if they can afford them. “American” cars, mostly Buicks, Chevys and a smattering of Fords on Chinese roads are mostly made in China. Just like the “German” or “Japanese” cars that are made mostly in China.
China as an export market for U.S. cars is a whole other matter. China has a 25 percent tariff on imported cars. That pretty much limits car imports to segments where price doesn’t matter, or where a high price acts as a differentiator from the riff-raff: Luxury cars. And this is where Europe reigns supreme. Read More >
Well, it seems that the wrecked US-Korean trade pact only affects U.S. food exports to Korea. It most certainly does not seem to have any influence on Hyundai. Hyundai expects to set a company record for annual U.S. sales next week already, and to sell even more in 2011. Read More >
Say what you want against Volkswagen, but they are moving the metal. In the first 10 months of 2010, Volkswagen delivered just shy of 6m cars to customers. 5.98m to be exact. In the same period of 2009, they had sold 5.32m, so that’s a plus of 12.4 percent. According to a message from Volkswagen HQ, the world market only rose 4.5 percent in October, the Volkswagen Group increased sales by 9.8 percent in the same month. That’s market share, baby! Read More >
The Auto Prophet brings up a point that completely escaped our discussion of General Electric’s EV mega-buy:
By gobbling up EVs, GE certainly helps to jump-start the industry, but they also gobble up future tax credits that consumers would have gotten, unless GE opts to forego the EV tax credit. Which would be bad business.
Yup, GE’s huge EV buy will be good for GE… but it won’t be so great for the 25,000 Americans whose tax credit will slurped up in the process. After all, the credit expires after a manufacturer sells 200k qualifying vehicles, so every credit GE uses brings GM and Nissan that much closer to the day they have to ask consumers to pay full price for their pricey EVs. No wonder GM is already pushing for an extension of the credit past 200k units.
This will disappoint those who were hoping for a cooling-off of the Chinese auto market. Chinese automakers in China shipped 1.2m passenger cars to dealers in October, up 27.1 percent from a year earlier, the official China Association of Automobile Manufacturers (CAAM) told Reuters today. Overall vehicle sales, which also include buses and trucks, were 1.54 million units, up 25.5 percent from a year ago. Read More >
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