The IHS Automotive Blog | Driven by Polk

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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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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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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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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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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Is There any Logic to Brazil's Auto Market?

Several protests took place in Brazil during the month of June. Everything started with public transportation fares that were increased, although the increases were less than $0.10. And even after the increase was cancelled, protests kept going on, focusing on corruption, the amount spent to build stadiums for the World Cup, poor educational and health systems despite high taxes, amongst other things. (For more about the protests, see the links at the bottom of the blog.) Ironically, protests......
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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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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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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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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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How Used Cars Are Hindering Mexico's Potential

Since January, Mexico has been able to import American and Canadian vehicles that are Model Year (MY) 2007 or older. Up until December, the limit was MY04 or older and in 2009, it was MY99 or older. In 2019, any used vehicle can be imported from the U.S. and Canada, regardless of its age. This is not a new problem: in 2006 and 2007, Mexico imported more used vehicles then it sold new cars. Although the imports cooled down last year, they gained strength again earlier in 2013. There was an...
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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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