On the eve of the 2013 New York Auto Show, the media has noted the irony that one of the largest auto shows in the country is taking place in a location where many residents do not even own a car. What is less frequently, if ever, mentioned in the press is the fact that the mix of new cars purchased by New Yorkers who DO own a vehicle is far different from the mix in the rest of the United States.
One of the most vivid differences between new vehicle registrations in New York and the rest of the country is that the luxury market is twice as big in New York as it is everywhere else. Premium vehicles account for almost one of every four new vehicles sold in New York, but just slightly more than one in 10 outside New York. This is predictable given New York City's position as the financial capital of the world.
Another difference, and one that is related to the gap in luxury deliveries, is that leasing is much more popular in New York than elsewhere. About 45% of all new vehicle transactions in New York – across all makes and models – are leases versus about 16% elsewhere. In other words, close to one of every two transactions in the New York area is a lease. Clearly auto manufacturers with a healthy captive finance arm have an advantage in New York. Amazingly, leasing accounts for up to 90% of all transactions in the New York area for some models (Infiniti G37 = 92%, Mercedes-Benz S-Class = 87%, Jaguar XK = 84%, and Acura ILX = 82% in the 2012 calendar year).
As if it wasn't competitive enough anyway, this widespread use of leasing in New York makes the retail environment all that much more cut-throat in New York. The deals hinge almost exclusively on the monthly payment and the sticker price becomes irrelevant.
The mix of body types is different in New York as well. Just 2% of all new vehicles registered in New York are large half-ton pickups and this category ranks fourteenth among all segments, but outside New York these trucks capture over 9% of the market and rank number four. Further in New York, luxury midsize crossovers such as the Lexus RX-Series and Mercedes-Benz ML-Class account for 5.4% of the market, but elsewhere their share is just half that amount.
Nationally, GM and Ford are the number one and three OEMs based on retail registrations, but in New York these companies are not among the top five. In fact, Fiat-Chrysler's New York retail market share of 8.2% outranks that of both its cross-town rivals. The three major Japanese automakers and Hyundai (which includes Kia) all out-distance the two domestics in the New York market.
The story is similar at the make level. The Ford and Chevrolet makes both rank in the top five nationally, but only Ford makes the cut in New York, ranking number four with 7.1% of the market. Honda is the most popular retail make in the New York area with over 15% of the market and almost four percentage points ahead of runner-up Toyota.
The Ford F-Series and Chevrolet Silverado rank number one and two nationally at the model level as has been the case for years. But in New York, these models rank number 32 and 53, respectively. Four Asian sedans and the Honda CR-V make up the five most popular models in New York.
Polk fuel type mix data suggests New Yorkers are not as environmentally sensitive as their urban counterparts on the West Coast. Traditional gasoline-powered vehicles comprise over 86% of all new vehicles registered in New York, more than 10 points higher than the average in the rest of the country. Diesel and electric vehicle shares in New York are less than half those elsewhere. One explanation for these differences is that hybrids and electrics are not as well-represented in the luxury space as they are in the non-luxury market. The non-luxury Toyota Prius, now available in four versions, currently dominates the hybrid market.
Overall, the New York new vehicle market differs markedly from the rest of the country. But, it can't be ignored. New York is the largest of the 211 DMAs and it accounts for 7.8% of all U.S. new vehicle retail registrations, 1.8 points more than runner-up Los Angeles.
Posted by Tom Libby, Lead Analyst, North American Forecasting, Polk (03.25.2013)