As any sales-watcher knows, volume isn’t everything. Fleet-retail mixes, incentive spending and transaction prices are all important considerations for putting volume numbers into context. As usual, we’ve assembled Edmunds’ True Cost Of Incentives index as well as TrueCar’s Transaction Pricing and Incentive Spending forecasts, for a complete picture of these important metrics… and after the jump, we’ve added a few notes on the discrepancies between the two firms’ numbers.

(Read More…)

To develop a new car takes a lot of cash, with unsure payback in some 5 years. During carmageddon, most large automakers delayed or stopped development of new cars. These new cars are missing now, especially at GM and rival Toyota.

Volkswagen went through carmageddon relatively unscathed and never stopped developing. Actually, they approved a record R&D budget of $71 billion for vehicle development and to boost production capacity from 2011 to 2015.

A preview of what all that money can buy will be given at the Geneva Motorshow, to be held from March 3 through 13^th. (Read More…)

Throughout the month, TTAC tries to go back to recent sales numbers in hopes of providing greater context for the industry’s day-to-day decisions. On the first of each month, however, we get so overwhelmed with volume numbers, we thought we’d take this opportunity to explore the price-volume frontier. Inspired by recent rumors of a 120k unit production goal for the $41k Volt and the ensuing discussion of the BMW 3 Series’ unique position on the price-volume frontier, we thought we’d feel around the data for this mythical plateau. Sadly our unsophisticated graphing software (and overworked editor) didn’t allow for a more full exploration of high-priced vehicles reaching near-mass-market volumes, so we put together a “basket” of higher-priced, strong-selling models. And though we obviously cherry-picked a little, we did use four manufacturers to indicate an approximate “delta” between price (base MSRP) and volume (2010 numbers). Are there outliers to our “price-volume frontier”? Possibly. Did we leave out the most interesting area of the graph (the mass-market vehicles) Definitely. But in the process we have hopefully proved that selling over 100k units of a vehicle costing $40k or more is not a goal to be taken lightly.

TTAC’s monthly sales coverage rolls on with a look at Chrysler, which saw sales rise 22 percent last month. The volume increase, driven by the Jeep, Dodge and Ram brands, was the second bit of good news Chrysler announced this week, following up its water-into-wine 2010 financial results. Like Ford, Chrysler Group’s problems remain with its “luxury” brand, Chrysler. The eponymous brand fell 7%, although a 45% increase in T%C volume helped mask deeper drops in other models like 300 (1,329 units), PT Cruiser (342 units) and 200/Sebring (1,482 units). Though 200 and 300 sales should increase due to their current production changeovers, Chrysler still has a lot of work to do to make the Chrysler brand relevant again. Jeep, on the other hand, is rolling, with sales up 47%. Grand Cherokee led the way again, up 130% to 7,612 units, Wrangler and Liberty added over 30% each, and Patriot was up 75%. Dodge saw Caliber, Avenger, Journey and Charger lose volume last month, but big increases in Caravan, Durango and Challenger helped bring the brand up 22%. On the truck side, Ram was up 22%, while Dakota dropped to 823 units.

(Read More…)

Poor Ford. As the latest sales data shows, its lone luxury brand Lincoln is one sick puppy. Lincoln’s best-selling vehicles are its entry-level models, the MKZ and MKX, indicating that killing Mercury still has yet to bring higher-end buyers to Lincoln showrooms. Higher-end products like MKS and MKT are dead in the water, failing to crack 1,000 monthly units combined in January. Pull out the dying Town Car and Navigator, and Lincoln moved less volume last month than the subcompact Fiesta. And though Ford acknowledges that it has a problem at Lincoln, managers have hardly been forthcoming about what it plans to do to fix the problem. Which, as far as TTAC is concerned is fine… Ford doesn’t have to convince us that Lincoln is coming back. It does, however, have to convince Lincoln dealers to stay on board… and because they’re playing with their own money, that’s a trickier task. Ford’s Jim Farley tells Automotive News [sub] that

My experience is that if you cannot show concretely that you have to spend x amount of resources and you get this out of it in terms of volume, margin and profit, they’ll never invest, no matter how much credibility we have

But will they invest without seeing product? Ford has announced that it won’t be showing new Lincoln products when it pitches dealers on the brand’s future at the upcoming NADA convention. But isn’t product the problem? Hasn’t product been the problem at Lincoln for years? Even if Ford commits significant resources to the problem, dealers have no way of knowing what that investment will actually yield. Need we mention the LS experiment?

Since Ford won’t make a solid pitch for the future of Lincoln, we’ll send the task over to you, our Best and Brightest. Short of mocking up prototypes, what products and promises does Ford need to make to get Lincoln out of the luxury cellar?

Ford Motor Company sold 127,317 units last month for a 13.3% increase in volume, despite weak a performance from its Lincoln brand and a 95% drop in volume from the dead Mercury brand. Lincoln effectively has two viable products in its portfolio, the MKZ (1,574 units) and the MKX (1,546 units)… nothing else moved more than 1k units last month. And of all its products, only MKZ saw a year-over-year sales increase last month, up 17.5%. With Mercury gone (but for a few hundred Grand Marquis sales), Lincoln needs to get its act together before Ford becomes a one-brand outfit. Still, If Ford did cut back to a single brand, the Blue Oval would still be in decent shape. Ford-branded vehicle sales jumped 21 percent to 121,511 units last month. Focus fell slightly f(13.2%) to 9,014 units, but Fiesta is coming on strong with 4,270 units. Fusion saw a modest sales increase, as the midsized contender moved to 14,346 units. Taurus and Mustang fell by 23% and 33% respectively.  Edge and Escape were up 42.8% and 30% respectively, and the new Explorer looks to be a hit with sales jumping 71% to 7,351. F-Series kept growing as well, with 35,806 units sold, and Transit Connect rose to above 2k monthly units while Ranger slid 31%.

(Read More…)

January 2011, US Light Vehicle Sales

Automaker	Jan. 2011	Jan. 2010	Pct. chng.	1 month 2011	1 month 2010	Pct. chng.
BMW Group	18,683	15,436	21%	18,683	15,436	21%
Chrysler Group LLC	70,118	57,143	23%	70,118	57,143	23%
Daimler AG	17,636	15,443	14%	17,636	15,443	14%
Ford Motor Co.	126,981	116,277	9%	126,981	116,277	9%
General Motors	178,897	146,315	22%	178,897	146,315	22%
Honda	76,269	67,479	13%	76,269	67,479	13%
Hyundai Group	65,003	52,626	24%	65,003	52,626	24%
Jaguar Land Rover	3,206	2,589	24%	3,206	2,589	24%
Maserati	114	101	13%	114	101	13%
Mazda	14,267	15,694	-9%	14,267	15,694	-9%
Mitsubishi	5,714	4,170	37%	5,714	4,170	37%
Nissan	71,847	62,572	15%	71,847	62,572	15%
Porsche	2,150	1,786	20%	2,150	1,786	20%
Saab Cars North America	658	–	-%	658	–	-%
Subaru	18,858	15,611	21%	18,858	15,611	21%
Suzuki	2,562	2,040	26%	2,562	2,040	26%
Toyota	115,856	98,796	17%	115,856	98,796	17%
Volkswagen	26,295	24,614	7%	26,295	24,614	7%
Volvo Cars North America	4,276	–	-%	4,276	–	-%
Other (estimate)	298	294	1%	298	294	1%
TOTAL	819,688	698,986	17%	819,688	698,986	17%

TTAC’s on top of all of the monthly sales news, as the industry records its first month of sales in the new year. (Data courtesy Automotive News [sub] ). Ford and GM, the first automakers to report, show solid gains, seemingly confirming analyst estimates of a 12.4m unit SAAR this month. But don’t read too much into the trend, as Reuters reports that auto sales momentum stalled in the final weeks of the month, prompting JD Power to lower its SAAR expectation from 12.2m units to “between 11.5m and 12m.” According to a JD Power spokesman,

the sudden slowdown in sales in January could reflect both the impact in winter storms and the absence of new sales incentives from major automakers. Those kinds of discounts, including cash-back offers, were down 12 percent in January from December

Check back regularly as TTAC unravels January’s sales performance from all of the automakers.

Another month, another raft of sales data… and another month of solid sales growth for General Motors. Buick continued its industry-leading growth pace, rising 32% over January 2010 with 13,269 units sold. Enclave sales rose slightly, and Lucerne got a big boost, but LaCrosse encountered its first signs of slowing, as sales dropped 11%, falling below 4k monthly units.  Cadillac did Buick one better, jumping by 49 percent year-over-year, moving 12,850 units. CTS boomed by over 70%, joining the SRX above the 4k monthly mark. The Escalades showed strong growth as well, though at lower volume levels, as did the aging STS and DTS sedans. GMC sales grew by 29%, moving 27,658 units as Savanna, Sierra and Terrain recorded growth of more than 40%. Yukon and Yukon XL combined for over 3,500 units, and Acadia stalled at 5 percent growth. Chevy, meanwhile, saw 19% growth, although with Impala, Aveo, Express and HHR leading volume gains, much of that may well have come from fleet sales. Strong performances from Equinox and Traverse give more cause for retail optimism. Overall, GM’s retail sales were up 36 percent according to the firm, and fleet sales fell 7 percent.

(Read More…)

Despite fears of building overcapacity in the Chinese market, GM is still very much enamored of its chances in the Middle Kingdom. Terry Johnsson, vice president of the automaker’s China operations tells Reuters

We sold everything we could build in 2010 and the same holds true in 2011. We could actually sell more than we will be able to (build) if we are not capacity constrained. We are actually short of capacity. The total business is going to go up by the size of a single plant. It’s not just about this year. We’ll have to look about a real rapid increase in our capacity

After all, the Chinese market may have slowed to a “mere” 10-15%, but GM’s sales were up by 20% last year as foreign automakers solidified their hold on the Chinese market. And even if the Chinese market does hit a wall (crazier things have happened), China’s desire to boost exports of its domestically-produced cars will help justify further investments in Chinese production capacity. Johnsson adds that GM will a “substantial amount” of its made-in-China Chevy Sail to emerging markets over the coming years, a decision that further justifies an investment in Chinese capacity. Only 5k Sails were exported last year (to Chile), but exports should rise to 20k units this year. Still, even those increased numbers pale in comparison to Chevy’s 125,625 Sails sold in China last year. But GM is already looking at shipping knock-down kits of the Sail abroad as it looks to increase Sail exports beyond even the 20k units planned for next year. After all, if The General has to bump UAW workers into the second tier to build subcompact cars in the US, production of low-cost cars like the Sail will have to stay in China for the forseeable future.

Can Saab overcome a miserable couple of years that saw global sales plummet as the Swedish brand was kicked out of the GM kingdom? If so, you will be seeing lots of this, the first US-market ad from Saab since the brand’s sale to Spyker was completed. Meanwhile, with Volvo in rebuilding mode as well, seeking to maximize its marketing spend per vehicle, America had better get used to the Swedish turnaround storyline. And, for the sake of these two marginal brands, consumers had better respond to their heritage-heavy pitch.

Holden may be rightly proud of its competition-creaming new Caprice Police Pursuit Vehicle, but Phoenix’s Finest just have one question: how often do you have to change those tires? And, as TTAC’s commentariat pointed out during the Michigan State Police’s trials, maintenance costs are nearly as important for police fleet buyers as pure performance. So, though the Caprice might out-hustle and out-interior-size its police-duty competition, the fact that only a limited number of civilian Zeta-sedans will make it to American roads means parts and maintenance won’t be as cheap or easy as the old Panthers. And because it hustles so nicely, those tires won’t be the only thing that will inevitably wear out. Still, it’s probably safe to assume that at least a few police departments will be seduced by the Caprice… so you’d better start burning that grille into your memory banks.

The Fiat 500 faces an interesting challenge in the US Market. Yes, it offers the fashion-nugget flair of a MINI Cooper at a lower price… but it’s also smaller, less powerful and not all that much more efficient. Automotive News [sub] reports that the new 500, which offers 101 HP from its 1.4 MultiAir engine, will be rated at 38 MPG Highway/30 MPG City with a manual transmission, and 34 MPG Highway/27 MPG City with an automatic. Compared to a 120 HP MINI Cooper, the manual 500 enjoys a 1 MPG advantage on both city and highway ratings, but with the popular automatic transmission, it actually gets worse mileage than the 36/28 MPG slushbox Cooper. Why the big discrepancy in the 500’s manual-versus-autobox efficiency? Probably because the European-spec 500 doesn’t offer an automatic, which was added to the vehicle (along with retuned suspension and more sound deadening material) just for the US market.

So, while the 500 starts some $5k lower than the MINI, and it’s not all that much smaller on the inside (front legroom is down about an inch compared to the MINI, while rear headroom is short by some 2.5 inches… but the 500 wins on other measures), the efficiency with an autobox leaves quite a bit to be desired… especially for a 100 HP, 98 lb-ft car.  And with the Fiesta offering a less flashy but larger 40 MPG option (with a self-swapping gearbox) at a similar price point, the 500 has some serious charming to do.

Volvo has come to the kind of conclusion we haven’t heard from an automaker in some time: it’s selling too many models. With nine models currently on the market, the Chinese-owned Swedish automaker has opted to cut that number by “five or six” nameplates, and will rebuild its US lineup around its XC60 and XC90 crossovers, and S60 sedan. As a Volvo spokesman explains to Bloomberg

We have to focus on the key segments with significant volume potential.

The first model to go from the lineup will be the V50 station wagon, but from there it’s anyone’s guess. To help kick off the speculation, we present the graph above, charting the recent sales fortunes of the nameplates that Volvo is considering for death. Since the one model on the chart that has already been marked for death (the V50) has the lowest volume, it might be safe to guess that the next model up the volume ladder (C30) will be the next to die. From there, it’s a lot more complicated. Last year the S40 moved 5,623 units, the C70 sold 5,263 units, the XC70 sold 6,626 units and the S80 sold 7,724. In terms of sheer volume, there’s reason to kill every one of these nameplates… but strategically there’s just as much of an argument for investing in any one of them. Too bad there’s only marketing resources for “five or six” nameplates. So, which models would you kill?

Chevy dusts off its “may the best car win” theme with a series of videos “daring” consumers to compare the Cruze… with its outgoing competition. The absurdity of the alleged
“comparison” is probably best highlighted in this video, in which the 2011 Cruze takes on a 2010 Elantra… even though an all-new 2011 Elantra is already at dealerships. With a much-improved 2012 Focus coming soon as well, a similarly rigged bashing of the outgoing Focus is made only slightly less unfair by the fact that the Focus isn’t available yet. Ditto the Honda Civic smackaround. And the Corolla. It’s almost as if Chevy knows that the Cruze is about to face some of the toughest competition in the industry… with a design that has been produced since 2008. Too bad the bowtie brand doesn’t seem willing to face the challenge.

I know fanboyishness is frowned upon in this establishment, so let me make this brief: what Pagani has achieved over the nearly 20 years of its existence is one of the most inspiring stories in the car business. The number of people who decided to get into the supercar game since 1992 could fill books, and yet among them all, Pagani alone seems to have carved out a truly sustainable niche in the business. Built one at a time with creativity and flair, Pagani’s creations boast all the supercar must-haves like power, performance and presence, but add something that is increasingly absent from modern cars: character. It’s an overused phrase to be sure, but Pagani’s Zonda could not only go toe-to-toe with Ferrari and Lamborghini’s finest, they make some of the most exotic metal look and feel, well, a bit ordinary… cynical, even. In an age when even the most super of supercars have been commodified, Horacio Pagani’s love of materials, dedication to the complete car, and unconventional but classic tastes have vaulted his firm to the top of the supercar heap. His latest car, the Huayra, a 700HP carbon-fiber beast some seven years in the making, seems to be more than capable of continuing that legacy.