Blog Posts by Tom Libby

Jeep Off to Extraordinary Start in 2014

As the automotive world focuses on the GM recall crisis, other stories are getting less visibility than they otherwise would. One of these is Jeep and its amazing start to 2014. Consider the following:
  • In the first three months of 2014, Jeep dealers delivered 145,839 new trucks, almost 45,000 (45%) more than a year ago, the largest increase of any brand in the industry (other than the 331% increase at low-volume Maserati).
  • Jeep captured 3.9% of the U.S. market in the first quarter, up 1.2...
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Millennials: Buying Fewer New Cars, but More Brand Loyal

A new study by the Pew Research Center on millennials (age 18-34, also known as Generation Y) provides financial data that support new vehicle registration data collected by IHS Automotive/Polk. According to the Pew study, millennials have more student loan debt, poverty and unemployment than both the preceding generations did at the same age, and, predictably, lower levels of wealth and personal income as well. With less buying power, millennials have been less likely to purchase a new...
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Small Crossover Sales Explode in February

February U.S. car sales were driven in part by the appeal of mainstream compact crossovers. These vehicles offer the ideal combination of value for the money, good fuel economy, car-like driving characteristics, and SUV-like functionality. Midsize as well as sub-compact crossovers offer some of these advantages but not all of them. Compact crossover sales in February drove industry results at the segment, model and make levels. At the segment level, the February results were extraordinary.... Rea...
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Are Brands Important?

In “Twilight of the Brands” in the February 17/24 issue of “The New Yorker,” James Surowiecki  discusses the challenges facing brands in today’s information-rich U.S. economy. Surowiecki focuses on Lululemon Athletica, a yoga apparel company that quickly became the darling of the industry and then tumbled almost overnight because of negative customer feedback. Such instantaneous customer reaction can propel a company to new heights or spell its doom in the blink of an eye, according to...Read...
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Who is Buying the Tesla Model S?

Given all the attention recently focused on Tesla, I thought it would be interesting to see who is buying the Model S. Specifically, what are customers trading in for the Model S, or what other vehicles do Model S buyers have in their garage if they are adding to their fleet? The Model S conquest data, derived from Polk new vehicle registration data, are fascinating. There are two ways of looking at the data. First, the pure conquest data show that the Model S is conquesting owners of... Read...
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Five Car Brands that Excelled in 2013 and Why

U.S. car dealers delivered 15,600,199 new cars and light trucks in 2013, up 8% from 2012. This is the fourth consecutive year-over-year increase and follows three years of double-digit growth from 2010 through 2012 as the industry climbed out of the 2009-10 recession. Of the 38 makes now on the market, 29 enjoyed year-over-year increases in 2013, eight saw declines and one (Tesla) could not be compared to 2012 since it had no sales at all last year. The five makes with the largest increases... Re...
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Luxury Share of U.S. Auto Market Remains in 10-11% Range

The competition in the luxury part of the U.S. new vehicle industry has perhaps never been as intense as it is right now, and, in a related trend, new product activity in this space is as frenetic as ever. BMW, Lexus and Mercedes-Benz continue to vie for luxury sales leadership with Audi and Cadillac aggressively trying to move up. Many of the luxury makes have been expanding into new segments, with such products as the Evoque, F-Type and CLA. There are other examples of this trend coming...
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Inconsistent Trends: Local Oil Production and EV Sales

Given the complexities of the global and U.S. economies, inevitably there are going to be economic and/or industrial trends that run counter to one another, but it seems to me that we are now experiencing two movements that are particularly inconsistent. Last month, The New York Times  ran a story about the surge in U.S. oil production, saying local oil output will increase by 800,000 barrels a day annually for at least the next three years (Dec. 17 page B1). Imported oil's share of total... Read...
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Luxury Deliveries Climb at Year End

December brings to mind snow and cold, but for luxury dealers in the U.S., this month will be the "hottest" of the year. U.S. consumers purchase more new luxury vehicles in December than in any other month of the year, according to monthly Polk new vehicle registration data. This contrasts with the monthly tallies for the non-luxury space, where March and August are the peak months. Luxury registrations also rise in the spring, but not to the same degree as non-luxury deliveries; rather,...
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Porsche Macan: “De-Nichification” Continues

The Porsche Macan, Porsche's all-new small crossover revealed last week in Los Angeles and to be launched in the U.S. next spring, should be a "slam dunk," given the landscape of today's new vehicle market. The small luxury crossover segment is one of the fastest-growing in the industry, with registrations more than quadrupling since 2008 and share of industry up by almost the same amount (see table below). The number of small luxury crossovers in the market has doubled from four in 2008 to...
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Mercedes-Benz CLA Has a Strong Start

Monthly summaries of U.S. car and light truck sales focus on macro results such as the seasonally adjusted annual rate (SAAR), corporate results and brand results. Micro outcomes get less publicity even though they may be as noteworthy, if not more so. For instance, there has been little mention given to the fact that Mercedes-Benz dealers delivered 4,895 CLAs in October, its second month on the market. This tally follows 2,310 sales in September. The October figure is surprisingly strong and...R...
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Smaller Powertrains Drive Jaguar Forward

After two lackluster years, Jaguar is now thriving in the U.S. In both 2011 and 2012, Jaguar suffered registration declines even though the industry recorded double-digit growth. But this year, Jaguar's registrations have jumped 25% through August when compared to a year ago. This is the fourth highest year-over-year gain among all makes (with 1,000 or more registrations) that were also on the market for all of 2012, after Porsche, Cadillac and Subaru. Jaguar's gain is almost three times the...Re...
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Automotive Leasing Moves Beyond the Luxury Market

Leasing is not just back; it has climbed to new heights in the U.S. car business. Through the first seven months of 2013, leases have accounted for 20% of all new vehicle transactions, the highest annual lease penetration in at least 10 years if it holds for the rest of the year. The Fed's bond-buying program, which has suppressed interest rates, coupled with the higher quality and residuals of new vehicles, has helped to make leasing more attractive to the consumer. This industry-wide rise...
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Georgetown University Study: Today’s Millenials Face Multiple Challenges

U.S. new vehicle registration data indicate that millenials' (age 21-34) portion of total new vehicle registrations continues to decline (see chart below). In the first seven months of this year, 11.2% of all new vehicle purchases were made by millenials, down from 14.5% five years ago. There are two schools of thought on why this trend is occurring:
  1. Millenials are not as interested in cars as their predecessors because, among other things, today's millenials are immersed in the digital age...
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August 2013: A Terrific Automotive Sales Month, Particularly for the Japanese

August U.S. new car and light truck sales were not merely good — they were extraordinary. Consider the following:
  • U.S. customers purchased 1,503,151 new cars and light trucks in August, the highest monthly volume since May 2007
  • This August total converts to an annual rate (SAAR) of 16.1 million, the highest monthly SAAR since November 2007
  • The August year-over-year increase of 17% was the highest monthly change since June 2012
  • Every manufacturer enjoyed a sales increase in August
  • August Ford...
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There are 33 New Vehicle Segments in the U.S. Market, But...

Drive on any U.S. highway for more than 10 minutes and you can't help but notice the wide variety of vehicles on the road. There appear to be dozens of colors, wheels, designs and body types from which to choose, not to mention the variety of less visible features such as engines, transmissions and connectivity technologies. A visitor to the U.S. could rightfully be overwhelmed by the plethora of different cars and light trucks on the road. Yet, a review of body type registration data reveals......
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Huge Opportunity: Orphan Owners

When car owners either trade their vehicle for a new one or add a vehicle to their household fleet, 55-60% of them choose a vehicle from the same corporation as their existing vehicle. But what about car owners whose brand has been discontinued (frequently referred to as "orphan" owners)? This is now a topical question since GM and Ford together have recently discontinued five brands. As of April, there were over 14.4 million orphan owners in the U.S. (including owners of vehicles from all...Read...
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Domestic Automakers Gain Car Share

There is mounting evidence that the three "domestic" automakers, long known for their strength in light trucks, are turning out more competitive cars and that consumers are noticing. New retail registration data for the first five months of 2013 show the domestics have gained almost two points of car market share (versus the same time period in 2012) with almost all of this increase coming at the expense of the Asian makes. The domestics have made these gains while at the same time increasing...R...
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Premium “Sweet Spot” - Small Crossovers

The "sweet spot" in the U.S. premium new vehicle market right now, at least from a volume standpoint, is the compact crossover category. Small luxury CUV registrations have jumped almost four-fold over the past five years, with almost 75,000 being delivered in the first five months of 2013. The segment's share of industry has reached 1.15% and small luxury crossovers now account for more than one of every 10 luxury registrations (with all luxury crossovers together making up a third of the...Read...
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OEM U.S. Branding Strategies – Chrysler Goes Its Own Way

At the brand level, the structures of the U.S. marketing and sales operations of all the major automakers are similar with the exception of one. The OEMs operating in the U.S. have one dominant make accounting for at least 60% (and much higher in most cases) of all its U.S. registrations while Chrysler's registrations are spread more evenly across five makes (see chart below). Chrysler's U.S. structure is the result of both acquisitions and a different marketing strategy. Chrysler purchased...
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