Blog Posts by Tom Libby

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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GM and Ford Gain Share in Growing Sub-Compact Segment

One reason for the improved U.S. market shares for both GM and Ford in 2013 is their rising shares of the non-luxury subcompact car category. GM's share of this segment climbed from 8.6% in 2011 to 14.3% last year, and it should reach 15% this year. Both the Chevrolet Sonic and Spark have sold well and represent improvements versus the Daewoo-based Chevrolet Aveo. In 2012, the Sonic ranked number two in the subcompact segment based on registrations, trailing only the Versa. Ford did not... Read...
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Dynamics of Commercial Van Segment Mirror General U.S. Market

Just as the U.S. new vehicle market continues to fragment into dozens of segments and hundreds upon hundreds of models, the commercial van segment is splitting into two distinct categories, each with a wide range of models. Back in 2008, the commercial van customer had five models from which to choose, but by next year there will be 11 models on the market. Prior to 2009, there was one commercial van segment and it was perennially dominated by Ford's E-Series (Econoline and Club Wagon). In...
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Toyota Camry’s Market Share Increasingly Under Pressure

It is no secret that Toyota owes much of its climb in the U.S. market to the success of the Camry. This sedan has been the most popular car in the U.S. every year since 1997, with the exception of 2001 when it was edged out by the Accord, and Toyota has not hesitated to stress the Camry's leadership position in its advertising. The Camry and Corolla represent the core of Toyota's car lineup in the U.S., though obviously there are other successful Toyota cars. The Camry's position at the...
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Flying Under the Radar, Subaru Thrives

Given that U.S. new vehicle registrations in 2012 were spread across 52 makes and 331 models, it's difficult to summarize the results concisely. This leads to a focus on the larger makes that dominate the industry. Yet one smaller make has been outperforming the industry for years and deserves some recognition. Subaru's recent performance in the U.S. has been remarkable. Two facts stand out. Subaru is the only make in the entire U.S. industry that has had five consecutive year-over-year sales...R...
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Ford and GM Showing Market Share Gains in Early 2013

Ford and GM are now solidly profitable and Ford's credit rating has moved out of the junk category, but the U.S. market shares for both companies declined significantly in 2012. Whether share is calculated by looking at the first two months of this year versus the same time period a year ago or versus all of last year, the results are the same. While these trends are discouraging in and of themselves, they are particularly concerning right now because the European operations of both companies...R...
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Automotive Worlds Apart: New York City vs. the Rest of the U.S.

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...
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Will Large Cars Survive?

Mainstream large cars, such as the Avalon, Maxima, Taurus and Impala, continue to lose favor. Their combined share of the U.S. market has retreated from 5.8% in 2008 to just 3.5% in 2012 (the results were similar this past January, with the large car share declining from 4.1% a year ago to 3.9% this year). Large cars now account for a smaller slice of the U.S. market than minivans, itself an endangered species. And the number of large cars continues to decline, down from 14 in 2008 to 7 now....Re...
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Dodge, Nissan and Kia Aim to Move Up in the Small Car Arena

Three new cars are striving to gain ground in the huge non-luxury small car segment. The 2013 Dodge Dart was launched last June, the redesigned 2013 Nissan Sentra last November, and the 2014 Kia Forte sedan arrives later this month. This segment accounted for 16% of all new vehicle registrations in 2012, second only to the midsize cars 17.6% among the 32 segments tracked by Polk. The non-luxury small car segment has been dominated for years by such well-known models as the Corolla, Civic and...Re...
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2013 Looks Bright for U.S. New Vehicle Sales

January 2013 U.S. new light vehicle sales climbed 14% from a year ago and sales for the rest of the year are expected to climb as well, though at a more modest rate. There are several drivers of this growth, both at the macroeconomic level and within the industry itself. Consider the following:
  • Interest rates remain exceptionally low, and with the Fed promising to keep them there until unemployment declines to 6.5%, we can expect to see low rates for quite awhile. This means that OEMs and...
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GM is Relying on New Product Blitz to Halt Share Decline

The next 18 months are important for all OEMs, but perhaps more so for GM than for any of its rivals. From mid-2012 through mid-2014, GM will unveil the greatest array of all-new or re-designed vehicles in recent memory, if not in the company's history. In 2012, the company brought to market the Spark minicar, Malibu midsize sedan, Verano compact car, XTS large luxury car and the ATS compact luxury car. Coming in 2013 are new versions of the Silverado and Sierra large pickups, the full-size... Re...
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Large Variation in Hybrid and Electric Vehicle Mixes Across Different Metropolitan Areas

The mix of new vehicle powertrains varies as much among the different regions of the United States as does the mix of makes and models, if not more so. The 15 Designated Market Areas (DMAs) with the highest percentage of hybrid powertrains together account for almost 30% of all hybrid registrations nationally, yet these same 15 markets include just 12.5% of all new vehicle registrations. Nine of these 15 hybrid-rich areas have a hybrid penetration greater than 6%, while the national...Read More...
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German Luxury Makes Resonate with the Young Buyer

Automotive marketers continue to covet the young buyer and this holds true in the luxury market as much as in the mass market. The luxury marque that captures the young buyer then merely has to retain him/her and move him/her up the ladder, while the luxury brand that fails to appeal to the young demographic is faced with the more expensive task of conquesting from a competitor. This is not to imply that customer retention is "easy," but it is generally acknowledged to be less expensive to...Read...
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Is the End of the Year the Best Time to Buy a Select Vehicle?

If your current car or truck is getting long in the tooth and you've been thinking about trading it in, you may want to drop by your local dealership before year-end. While some people believe the fall is the best time to buy a new car because the dealers want to clear out their inventory to make room for the new models, in fact the end of the calendar year is just as good a time, if not better. Here's why:
  • Dealership employees and vehicle manufacturer employees, including retail salespeople,...
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