OEM

Alfred Sloan Lives: Moving Mainstream Customers to Luxury

Alfred P. Sloan died almost 50 years ago, but several of his strategies that built GM into the world’s largest automaker remain intact. Sloan created a “ladder of brands” at GM to enable the consumer to “move up” the ladder to more prestigious makes as his household financial position improved; today six auto manufacturers offer both mainstream and premium makes in the U.S. to similarly allow the consumer to “move up” the ladder, so to speak. IHS Automotive loyalty data (see below) show that...Re...
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Targeting Automotive Search With Improved Analytics

Optimizing paid and organic search among digital advertisers and lead generators is becoming increasingly more important and of interest to auto marketers.  However, much inefficiency currently exists in the marketplace.  Traditionally, digital analytics and marketing companies identify key terms that generate click traffic for specific campaigns. Automotive website companies provide extensive reporting for the optimization process through key words and terms. While these analytics allow...
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Ford Fusion Moves up in the Midsize Car Segment, Despite the Asian Stronghold

The domestic OEMs have lagged behind their Asian competitors in the U.S. new car market for many years. From 2009 through 2012 the domestic OEMs’ combined share of the retail car market was below 28%. Last year it inched up to 28.2%, and through the first four months of 2014 it stands at 28.7% (based on IHS Automotive analysis of Polk new vehicle registration data). Although the current car offerings from GM, Ford and Chrysler are clearly superior to their predecessors in many perspectives,...
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Nissan Targets 5% of Brazil Auto Market Share with New Facility in Brazil

Nissan just opened a new plant in Brazil, with capacity to make 200,000 light vehicles per year. Nissan has built the Livina/Grand Livina MPVs and the Frontier pick-up in a plant owned by Renault in the southern part of the country. With the new facility, they will make the March and Versa in Brazil. Previously, they were imported from Mexico, but when Brazil set limits on vehicle imports from Mexico in 2012, they had to change their strategy. The new factory, which was built in 36 months,...
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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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The Best-of-the-Best: Automotive Loyalty Award Winners Named

It was my pleasure to be a co-presenter last night, along with Edouard Tavernier, as 33 winners were recognized for automotive loyalty and conquest during the Polk Automotive Loyalty Awards presented by IHS. For those of you unfamiliar with how owner loyalty is measured, it’s determined when a household that owns a new vehicle returns to market and purchases or leases another new vehicle of the same model or make.   This year's Polk Loyalty Awards recognized the best-of-the-best and winners...
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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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How Quickly Should an OEM Phase a Vehicle Out?

I always think about the title of this post – how quickly should an OEM phase a vehicle out? – when I analyze Chevrolet’s numbers in Brazil, the second market for the brand just behind the U.S. Before I get to the figures, let me give you a quick background. Traditionally, Chevrolet had sold rebadged Opel models in Brazil: Monza, Corsa, Zafira, Meriva, Astra, Vectra. During GM's Chapter 11 time, no investments were made in Brazil, which got Detroit's approval of using local revenue to develop......
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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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Will Automotive Luxury Brands Succeed in Brazil?

Do you have the impression that the Brazilian president meets the CEO of an automaker daily? Lately there have been a lot of announcements that OEMs will start – or resume – production in Brazil. This year, Honda and Mercedes-Benz announced new plants, while Audi stated it is coming back to Brazil and making cars in a VW plant where it built the A3 some years ago. VW confirmed it is finally updating the locally made Golf (currently still in its fourth generation). Last year, BMW announced its......
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Farewell to Brazil's Oldest Vehicles

Brazil is waving goodbye to some of its oldest vehicles. Not because OEMs have decided to drop them or because customers were not going to the dealer network looking for them, but because all vehicles sold in Brazil beginning January 1, 2014 must have ABS and airbags. And some last-longing models simply cannot comply with the rules. That is the case of the Volkswagen Kombi, known as the Transporter T2 in the country. Made in Brazil for the past 56 years, it was the first vehicle assembled...
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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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Which Vehicles do Canadians Love to Buy?

Seeing the Signs Every new vehicle sold is a signal to OEMs that customers want more of that type of car or truck. In essence, customers are voting with their wallets and with business interests ever focused on customer loyalty and customer retention, an OEM should be seeing the market signs. National Trend: Consumers Continue to Buy New Through the second quarter of this year (2013 Q2), new vehicle sales are once again on the rise in Canada. New vehicle registrations indicate that...
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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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Is there any Logic to Argentina's Auto Market?

If you follow my posts, you have read that there is not much logic in Brazil's automotive market (if not, you can follow the link at the bottom of the blog). Today, I will show that neighboring Argentina faces the same problem. Argentina is struggling with inflation. Last year, inflation was 10% according to the government, but opposition in Congress says it was 25% – the highest rate in South America and only behind Venezuela. The government is known for reporting lower inflation and higher...
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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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Exports Hurting Production in Brazil

Tax incentives were very effective in 2012 and helped Brazil reach a new sales record of 3,573,076 light vehicles. With this success, Brazil remained the fourth largest automotive market in the world, just behind China, the United States and Japan. Polk's automotive forecast does include any changes in this ranking in 2013 when sales in Brazil are anticipated to reach 3.63 million light vehicles. However, Brazil's importance declines when we analyze production numbers. Last year, production...
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Automotive Customer Loyalty - Who's Winning and How?

It's not always about who has the largest market share or the broadest product line. Sometimes repeat sales for OEMs and dealers are fruitful when you're a small player, too. Yesterday, Polk issued a press release of customer loyalty on automakers who beat the industry average by looking at first quarter results.  What did we find?
  • Thirteen brands exceeded the average industry increase for make loyalty when we compared buyer behavior from Q1 2012 and Q1 2013. The first three months of the...
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