The Truth About Cars » Sales The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Apr 2014 13:30:05 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Sales Ford C-Max Sales Decline Post-Fuel Economy Revision Wed, 23 Apr 2014 13:30:05 +0000 Ford_C-Max

Sales of the Ford C-Max have down as of late, with lowered fuel economy figures cited as the reason.

Autoblog reports sales of the hybrid from January through march 2014 were 42.5 percent from the previous year as 5,566 — 2,295 of which were sold in March alone — have left the lot.

After a number of lawsuits alleged the C-Max couldn’t meet the initial fuel economy numbers in the real world, Ford lowered the numbers to 40 mpg city, 45 mpg highway and 43 mpg combined, down from the 47 mpg throughout the range originally proclaimed.

Ford Americas chief Joe Hinrichs is aware of the decline in sales, and says his company needs to “reinvest in the product because [the C-Max] is a great car,” while Ford itself believed sales would remain strong despite the controversy surrounding the fuel economy figures.

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Automakers, Dealers Prepare For 2016 Off-Lease Market Flood Tue, 22 Apr 2014 13:30:50 +0000 Used cars

Currently, around 2.13 million cars will come off-lease by the end of 2014, up from 1.7 million last year. By 2016 and beyond, however, over 3 million vehicles annually will turn up on many a CPO and used car lot, replacing a long drought with an El Niño-esque flooding of the U.S. used car market.

Automotive News reports the predicted rise in off-lease vehicles, though a boon for used-car dealers and their customers, will slam new-car buyers come trade-in time, as lower prices for used means lower value for those trading their vehicles for a new experience in the showroom floor. Rising interest rates and lease payments to make up for lower used pricing will also add pain to a new-car buyer’s wallet come 2016.

As for automakers and dealers, both parties are preparing the flood with various strategies being put together, such as Volkswagen’s partnership with DealerMatch — allowing VW dealers to buy and sell as many used vehicles as desired for a flat monthly fee, in lieu of the auction lot’s per-vehicle rate — and workshops designed to optimize CPO sales among dealers and sales representatives.

That said, some automakers and dealers may still find themselves overwhelmed by the coming tsunami due to leasing more vehicles than are sold. senior analyst Jessica Caldwell says leases accounted for 26 percent of all new sales in the U.S. last year, while 28 percent of sales in Q1 2014 were leases. The increase in leases is aided by easy credit, rising residual values and record-low interest rates, and serves as a marketing tool to build customer loyalty through repeat visits as each lease agreement draws to a close.

The last time over 3 million vehicles came off-lease was in 2002, when 3.4 million returned to the used-car lot before slowly coasting downward to a low of 1.56 million a decade later.

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Musk: Tesla Will Build Cars In China Within Next Few Years Tue, 22 Apr 2014 13:00:56 +0000 Model S - Tesla Motors China

Though Tesla is now just delivering new vehicles to China, CEO Elon Musk predicts his company will build luxury electric vehicles in the burgeoning market within the next three to four years.

Bloomberg reports the move to localized production would allow the automaker to sell their wares while also avoiding China’s 25 percent import tariff. Right now, a new Model S retails for $118,000 in Beijing due to VAT, shipping and import duties, compared to $71,000 in Los Angeles. Musk hopes to qualify the Model S for local subsidies to help offset costs in much the same way the luxury EV sedan receives federal tax credits back in the United States.

In addition, Tesla is expanding its Supercharger network to China, with Beijing and Shanghai among the first cities to join. No word yet as to how much the automaker is investing in the expansion.

A number of challenges lay ahead for Tesla’s move into the market, including slow adoption of electric vehicles among Chinese consumers and lack of a robust infrastructure, as well the loss of China general manager of operations Kingston Chang prior to the automaker’s entry. That said, Tesla plans to increase overall global sales 56 percent this year, moving 35,000 EVs out of the showroom in so doing.

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GM Sales Unaffected By Recall, Reveals China Expansion Plans Mon, 21 Apr 2014 14:00:22 +0000 File photo of General Motors logo outside its headquarters at the Renaissance Center in Detroit

Reuters reports a lawsuit related to the 2014 General Motors recall crisis filed in federal court in California has placed airbag supplier Continental Automotive Systems U.S. at-fault for its role in the recall. Attorney Adam Levitt of Grant & Eisenhoffer proclaimed the supplier knew about the out-of-spec ignition switch at the heart of the recall as early as 2005, yet “did nothing to redesign its airbags” to deploy even when electrical power was cut, “nor did it warn NHTSA or the public.” Continental joins Delphi Automotive as the second supplier to face a lawsuit linked to the ongoing recall crisis.

Between the National Highway Traffic Safety Administration and GM, Automotive News says the former found itself pushing the latter on a number of occasions to do more than issue service bulletins, regional recalls, warranty extensions and customer-satisfaction campaigns regarding problems ranging from corroded fuel filler pipes in full-size vans and risks of fire from door modules in fullsize SUVs, to malfunctioning airbags in Camaros and Malibus and the aforementioned ignition switch affected over 2.26 million 2003 – 2011 vehicles to date. In a 2013 email released to the public by the ongoing Congressional investigation into the recall, NHTSA Office of Defects Investigation director Frank Borris expressed his frustration with the automaker to GM executive Carmen Benavides over GM’s slow approach to communication and action, as well as needing more provoking to do more than the least amount of effort to resolve an issue.

In more NHTSA/GM news, The Detroit News reports the agency has closed the book on its four-year investigation of 334,000 2004 – 2007 Saturn Ions regarding steering problems after the automaker announced they would recall the cars. Four service bulletins linked to power-steering repairs will be issued by GM, affecting the Ion and Chevrolet Cobalt, as well as the Saturn Aura, Pontiac G6 and Chevrolet Malibu. A total of 10 crashes linked to power-steering failure — with two resulting in injury — 4,787 complaints and 30,560 warranty claims were discovered by the NHTSA during the investigation.

As for bringing the affected vehicles in for service, Automotive News reports GM-affiliated and non-GM dealerships are having a rough time with the recalls, citing a lack of parts, growing backlog of recall-related repairs, and lost sales and dealer-related financing. However, GM President Dan Ammann says the main recall hasn’t had a “measurable impact” on overall sales, citing a 4 percent truck-led U.S. sales gain in March and a “decent start” to April’s sales. That said, Ammann has not ruled out a future impact from the recall news.

In the meantime, GM will invest $12 billion into China by 2017, with plans to boost production capacity 65 percent by 2020 based on expectations of the local market to reach 33 million to 35 million new vehicles made per year by the start of the new decade, which Ammann claims will be double that of total projected U.S. demand at the same time. The expansion would total capacity to 8 million units per year, fueled by 60 all-new or refreshed products introduced to China between now and 2018, including 11 new utility vehicles — such as the Chevrolet Trax — and a new Cadillac model every year through 2016.

Finally, The Detroit News reporter Henry Payne took to heart GM CEO Mary Barra’s statement before Congress about allowing her son to drive an affected Cobalt so long as the key was by itself in the ignition switch, turning up at a local dealership to drive an affected 2006 Cobalt to see for himself what would happen. In short: Nothing involuntary, as Payne had to put the switch into the “accessory” position himself to recreate what may have happened in the reported accidents and fatalities linked to the switch.

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AutoNation Parts Ways With Third-Party Lead Providers, Pursues Own Online Project Mon, 21 Apr 2014 13:00:41 +0000 autonation-inc-logo

In its pursuit of establishing an online store where shoppers can do (almost) everything related to the car-buying experience, AutoNation Inc. announced last week it would no longer use third-party lead providers, focusing instead on its own online plans.

Automotive News reports the move is related partly to rising costs, whose savings will be invested toward AutoNation’s online storefront as laid out in the announcement by CEO Mike Jackson:

We’re really looking at the whole spectrum of how we interact with our customers. We’re also going to be looking to broaden the brand attributes of AutoNation and move into different business fields with branded products from AutoNation, whether that’s service contracts, warranty contracts. We’re full of ideas.

The project, launched in 2012, aims to make shopping for a new car at any of its 229 branded dealerships as seamless as possible, from making the purchase at home, to finalizing financing et al the next day. $100 million will be invested into the project over the next several years, with the bare-bones version of AutoNation’s storefront opening for business in December 2014.

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New Nissan Compact Hatch To Lead Fight For Increased European Growth Mon, 21 Apr 2014 13:00:31 +0000 Nissan_Almera_front_0071129

Eight years after the Nissan Almera left Europe, the automaker is planning a return to the C-segment hatch market in October, with the overall goal of 5 percent overall European market share by the end of FY 2016 in mind.

Automotive News Europe reports the compact hatchback will bow at the 2014 Paris Auto Show prior to going on sale soon after, and will be built in Nissan’s Barcelona, Spain factory, where capacity has been boosted to 80,000 units annually with the aid of a $178 million investment.

As for the Qashqai, which took over for the Almera in Europe upon the latter’s departure to great success, Nissan Europe boss Trevor Mann believes the compact won’t ding sales of the second-gen compact crossover:

In any segmentation you get that cannibalization. We think Qashqai sales will stay level. That car has defied what’s normal. The original annual sales target was 130,000 units. In the first year we made 160,000 units and since then we’ve been making 300,000 units.

Currently, Nissan holds around 4 percent of overall European market share. With the compact hatch leading the way, the automaker aims to own 5 percent by the end of FY 2016 in late March 2017.

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Cain’s Segments: Canada Recap April 2014 Tue, 15 Apr 2014 13:23:35 +0000 TTAC-Q1-Canada-recap-chart-best-selling-SUVs
March 2014’s Canadian auto sales results displayed a further willingness on the part of buyers to gradually forsake cars and turn to smaller crossovers.

Despite the increased strength of the Toyota Tundra and Ram Pickup range, pickup truck sales growth has stalled, and indeed reversed.

Year-over-year, minivans are getting back into the swing of things, but not to the extent that they’re selling as well as they did two years ago.

Although sales at BMW, the second-ranked luxury brand through the first quarter, are down slightly this year, overall premium brand auto sales are up 7% in a market that’s managed less than a 1% improvement over the last three months. BMW, Mercedes-Benz, and Audi own 52% of the market for luxury auto brand vehicles. Mercedes-Benz has the advantage in Canada of not just selling a new entry-level sedan, the CLA, but also the more popular entry-level hatchback B-Class, which accounts for 16% of Mercedes-Benz passenger car sales.

Canadians are very nearly as willing to support traditional Detroit-based brands as their neighbours to the south – GM, FoMoCo, Chrysler/FCA own 45% of 2014’s U.S. market, 44% – but the same does not go for Cadillac and Lincoln. Cadillac is America’s fourth-ranked premium brand, but Cadillac slides to seventh in Canada. Lincoln ranks ninth in Canada, but in the U.S., where Lincoln volume is 19 times stronger, it moves up to eighth. Land Rover sales are 52% stronger than Lincoln sales in Canada, while Lincoln sales in the U.S. are 65% stronger than Land Rover sales. 1.6% of the new vehicles sold in the U.S. in the first quarter of 2014 were Cadillacs and Lincolns; only 0.8% in Canada.

Canadians still made Ford the top-selling auto brand in Q1 of 2014. Ford brand sales tumbled 11% in March and 8% in Q1, however, as first quarter car sales slid 22% and the F-Series, approaching replacement, fell 6%. (YOY, Ford’s share of a pickup truck market that’s down 2.5% has fallen from 38% to 37%.) The Fusion is currently Canada’s second-best-selling midsize car after leading the category in calendar year 2013. In fact, the Mustang is the only Ford car product to record a year-over-year sales increase in Q1.

As a whole, Ford Canada was outsold by the Chrysler family of brands in each of the last three months. (GM Canada outsold Ford/Lincoln in December.) Ford had become the usual leader, but even with the Chrysler Group’s total lack of car success in 2014, Dodge/Ram/Jeep/Chrysler/Fiat have opened up a 7726-unit lead through three months. Chrysler Canada says their car sales are down 21% this year. Even if we exclude the 200 and Avenger (about to be replaced and defunct, respectively) from the equation, the company’s car sales were down 1%.

But the Ram truck lineup, Dodge’s Grand Caravan, and the Jeep brand currently account for seven out of every ten Chrysler Canada sales, and the volume achieved by that group is up 12% in 2014. Minivan sales in Q1, 65% of which came from the Grand Caravan and Town & Country, are up 7%.

Cars are still capable of succeeding in the Canadian auto market. Sales of the best-selling Civic, Canada’s third-best-selling vehicle overall, are up 10% this year. Yet cars are currently responsible for less than 41% of the industry’s volume, and the decline can be spotted in the Civic’s closest rival, the Hyundai Elantra, which is down 9%. Hyundai and Kia, which combine to sell more passenger cars in Canada than any other automotive conglomerate by far, have seen their car sales slide 9%.

As a symbol of the tussle between traditional passenger cars and newfangled crossovers, consider the BMW 3-Series and Audi Q5. No other premium brand products have sold as often as this pair. They’re tied for the lead as Canada’s top-selling luxury brand automobiles through three months. With 1664 sales each, they’re not uncommon: only 53 nameplates have generated greater volume in early 2014.

The Q5 is playing on the winning side. 55% of vehicles sold in Canada in 2014 by Mercedes-Benz, BMW, Audi, Cadillac, Lincoln, and their luxury rivals have been SUVs or crossovers of one kind or another.

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Toyota Looking To Conquer Africa Tue, 15 Apr 2014 11:58:19 +0000 Toyota Land Cruiser 79 Bakkie

Though Toyota already has a presence in South Africa, the automaker is eyeing the last untapped market in the world: The African continent.

Automotive News reports Toyota patriarch Shochiro Toyoda gave his son, current president Akio Toyoda, a mission last year to explore markets outside of the “Asia-Europe-America” sphere, especially those where the younger Toyoda had not visited. His travels took him to a knockdown factory in Kenya, where there are 40 cars per 1,000 people according to IHS Automotive, laying the early groundwork for an all-out campaign to get as much of the final frontier as possible.

Success in the market may have to come in the long term, however; IHS predicts GDP per capita in Sub-Saharan Africa won’t reach the threshold of $3,000, as well as the ownership rate of 70 units per 1,000 people, until 2030 at the earliest. Toyota Africa CEO Johan van Zyl, who is scouting for new factory locations outside of South Africa, knows this reality well:

It’s a growing market, a market with a future. We have quite an ambitious [annual sales] target. But we must also understand, this is not going to happen overnight. We have to put the right things in place. And that is what we are busy doing, to ensure that we have the right foundation for the business in the future in Africa.

In the meantime, the automaker will launch the Quest compact in South Africa next month. The Quest — based upon the previous-gen Corolla — will help boost production towards full capacity at Toyota’s Durban plant; while max capacity is 220,000 annually, current production is 160,000 units per year. Unlike many auto makers, Toyota is not pursuing a new brand or platform for their new, low-cost car.

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GM Internal Investigation Hindered By Corporate Culture Tue, 15 Apr 2014 10:58:40 +0000 GM Next

Bloomberg reports now-former General Motors engineer Brian Stouffer conducted a two-year internal investigation into the out-of-spec switch at the heart of the automaker’s current recall crisis, only to find confusion and resistance along the way to finding answers as to why vehicles up through 2008 were stalling out. In addition, Stouffer reported to three different executives assigned to the investigation in one year as it moved along, as well as the lack of sufficient cases that met the criteria required. Only in late 2013, when Delphi responded to Stouffer’s inquiry by providing the document showing the changes made to the switch back in 2006, did the investigation come to a head.

Automotive News posits that the link between the out-of-spec switch and the 13 fatalities under the spotlight may have been muddied under other circumstances focused upon the drivers involved, ranging from being unbelted and driving under the influence, to speeding and lack of experience behind the wheel. Further, both police and the National Highway Traffic Safety Administration didn’t immediately make the link between the switch and undeployed airbags, the former citing numerous instances and the various reasons behind each failure.

Though it would appear as though GM were the new kings of recalls as of late, Boston-based used-car shopping site iSeeCars compiled data of the top 15 automakers who sold vehicles in the United States between 2005 and 2014, and found the automaker among the middle of the recall list with 96 recalls for every 100 vehicles sold. Toyota took the No. 1 spot with 167 recalls per 100 sold, while Mercedes-Benz took last place with 38 per 100.

Within GM, public relations head Selim Bingol and human resources chief Melissa Howell have both left the automaker “to pursue other interests.” The departures are not related to the recall crisis, according to spokesman Greg Martin, explaining the exits as “a part of any transition where the CEO makes changes and puts together her leadership team.” That team will now consist of John Quattrone, who will head the human resources department CEO Mary Barra ran until 2011, while head of investor relations Randy Arickx will serve as interim PR chief until a permanent replacement is found.

Finally, The Wall Street Journal reports Opel may finally break even ahead of a 2016 target date after years of seeing red. The charge toward equilibrium is being cautiously led by CEO Karl-Thomas Neumann, whose changes to the company — including the closure of a plant in Germany, a $6 billion investment in Europe, and the introduction of 23 models by 2016 — have helped Opel see a rise of 3 percent in European Union sales during the first two months of 2014. The news follows similar signs of hope for GM overall, as Automotive News adds Cadillac’s and Buick’s first-ever wins in J.D. Power & Associates’ 2014 Customer Service Index, as well as the Chevrolet Equinox/GMC Terrain twins being the only two midsize SUVs to receive a “good” rating by the Insurance Institute for Highway Safety in the small-overlap test as small victories for the automaker.

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New PSA Boss Tavares Prepares To Rebuild Company Mon, 14 Apr 2014 14:15:58 +0000 Carlos Tavares

Though PSA Peugeot Citroen secured funding in a three-way deal between itself, the French government and Dongfeng, new boss and former Renault COO Carlos Tavares has a hard road ahead of him as he rebuilds the ailing automaker.

Reuters reports Tavares will focus using the joint venture it shares with Dongfeng to go after 1.5 million sales by 2020, bring exports to Southeast Asia and establish a research center. He will also tighten up both working capital and the number of models sold in each market, as well as squeeze savings from PSA’s suppliers.

However, development woes, pricing issues on some models, and the use of heavy discounts and incentives are all roadblocks on Tavares’ “Back in the Race” plan expected to be issued in full Monday, as well as currency challenges in Latin America and Russia and lower-cost products from around Asia.

As part of the plan, Tavares is expected to halve the number of models it currently offers. On the bright side, the 308 and 2008 both delivered a combined 5.2 percent sales increase in the first two months of 2014, as well as an 8.5 percent Q1 2014 gain over PSA’s home market.

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Wash. Governor Inslee Signs Pro-Tesla Legislation, Hackers Find Ubuntu Inside Mon, 14 Apr 2014 13:45:11 +0000 Ubuntu_GNOME_13.10_ScreenShot

Automotive News reports Washington state governor Jay Inslee signed legislation that would allow Tesla to continue with its direct-sales business model within the state while also clarifying current law that favors traditional franchise dealership networks by preventing other automakers from following in Tesla’s path. The EV automaker thanked the state government “for supporting a culture of innovation and ultimately making the right decision for consumers” with the introduction of the bill into law.

In other government news, the California Air Resources Board is considering cutting EVs priced at $60,000 and above from the agency’s Clean Vehicle Rebate Program as funding continues to run low, according to Capitol Weekly. Though the move would be temporary, the cap would push-out both the Cadillac ELR and Tesla’s Model S and upcoming X, a move that Tesla feels is disappointing:

[CARB] aims to paint Tesla as the sole purveyor of EVs (electric vehicles) to the wealthy, while disregarding the fact that individuals of similar affluence may still continue to receive a rebate by purchasing a different EV.

Finally, Autoblog Green reports a group of tech-savvy Tesla owners have dug into their EV’s console via its exposed Ethernet connector, discovering a subsystem powered by Linux distribution Ubuntu. The individual behind the dig, known only as ‘nlc,’ was contacted by the automaker through its service center, warning him that his exploration could void his car’s warranty should he persist.

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Honda Pursues 70k Annual US Fit Sales Mon, 14 Apr 2014 13:30:26 +0000 2014-honda-jazz-2015-honda-fit-photo-gallery-medium_17

In 2008, Honda sold nearly 80,000 Fit subcompacts to the United States, and is preparing to move 70,000 annually from the lot to the driveways of America thanks to its new Celaya, Mexico plant.

Ward’s Auto reports the automaker had a difficult time hitting the milestone set in 2008 due to production constraints at home and fervent demand abroad. With the new plant, however, Honda will be able to make 200,000 Fits annually, as well as the Fit-based crossover set to begin production later this year.

As for who Honda expects will buy the 70,000+ Fits aimed for the U.S. market — aside from lifestyle bloggers — product planner Hiroaki Hamaya says the subcompact is already “capturing the highest household income and percentage of college grads.” Data from J.D. Power bears this out: Fit buyers hold an average income of $75,000 while 64 percent of them have graduated college. However, median age and percentage of buyers under 35 currently lag behind competitors such as the Ford Fiesta and Chevrolet Sonic.

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Cain’s Segments: Muscle Cars Fri, 11 Apr 2014 18:43:11 +0000 2010_Dodge_Challenger_RT_Classic

The Ford Mustang is selling more frequently in 2014 than it did in the same period of 2013. Ford is also grabbing greater U.S. market share in the relatively high-volume muscle car sector.

This might seem surprising given that Ford is set to replace their fifth-gen pony car with a new edition for 2015 – don’t people want to wait for the new model? Yet such a turn of events isn’t unprecedented, and it’s not as though a few current Mustangs couldn’t be sold at this moment because their buyers find the next Mustang less desirable.

Unlike the Porsche Boxster’s class of European roadsters, the sales achieved by the Mustang, Chevrolet Camaro, and Dodge Challenger garner attention not just because they stir up the passions of automotive enthusiasts but also because the numbers are high. These aren’t rare cars; their ubiquity can be traced back both to their affordability and to their history.

Moreover, there may be no sports/sporting/sporty car sub-segment where the competitors are so easily identifiable. While it’s true that loyal Mustang owners may never consider the Camaro, the three cars in this group are still plotted on the same connect-the-dots map. The same can’t really be said of the Scion FR-S (hardtop, and a backseat) and Mazda MX-5 Miata (two-seat droptop), nor even the Honda Civic Si (two doors and a trunk) and Volkswagen Golf GTI (hatchback).

And so we compare rear-wheel-drive muscle. Even at the end of winter. Even in a transition year.

The Mustang, sales of which have improved by 2276 units through one quarter of 2014, is America’s 60th-best-selling vehicle overall, less than 1700 sales back of the Lexus RX, GMC Acadia, Jeep Patriot, and Subaru Impreza/WRX. It ranks just ahead of the Nissan Pathfinder, Chevrolet Camaro, Nissan Frontier, and Kia Forte.

Camaro sales have increased by a less impressive 370 units. The Camaro is America’s 62nd-best-selling vehicle so far this year.

Both the Camaro and Mustang have stolen market share from the declining, aging Dodge Challenger. Never capable of challenging the Mustang and Camaro in terms of U.S. volume, Dodge has nevertheless increased its Challenger sales volume every year since the car arrived in 2008. In 2013 there were twice as many Challengers sold in America as there were in 2009.

The first quarter of 2014 has seen the Challenger’s market share in the category fall to 22% from 28.5% one year ago. Meanwhile, the Mustang has outsold the Camaro by a grand total of 28 units in 2014 – 681 units in March, specifically – and its share in the category has grown to 39% from 33.9% in Q1 of 2013. Camaro market share is up from 37.6% to 39%.

To better understand just how common these cars are, however, consider the total sales from individual automakers. Ford, Chevrolet, and Dodge combined for 50,198 Mustang, Camaro, and Challenger sales in the first three months of 2014, 16,519 units more than the combined sales at Fiat, Mini, and Scion. The Mustang, Camaro, and Challenger’s total beats the whole Mazda brand by 8230 units; Infiniti by 18,977 units. The Mustang and Camaro, individually, outsell Volvo.

2014 won’t necessarily be a reliable barometer for American muscle car sales, with a redesign of the Challenger yet to be introduced, the aging Camaro, and the Mustang’s replacement. But the first three months of 2014 could still be an accurate gauge for what we can expect as the pages on this year’s calendar flip over.

And by the by, GM also sold 8179 Corvettes during the first three months of 2014, a 178% year-over-year increase.


3 mos.
3 mos.
Chevrolet Camaro
8624 8102 + 6.4% 19,568 19,198 + 1.9%
Dodge Challenger
4882 6132 - 20.4% 11,034 14,540 - 24.1%
Ford Mustang
9305 7688 + 21.0% 19,596 17,320 + 13.1%
21,922 + 4.1% 50,198 51,058 - 1.7%
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More Trade-Ins Pulled Underwater As Negative Equity Level Rises Thu, 10 Apr 2014 13:00:30 +0000 01-cadillac-dealership4

As more consumers trade-in their old vehicles for a newer model, a growing number of consumers are owing more on their trade-in than their vehicle’s actual worth.

Automotive News reports a gradual rise in negative equity among trade-ins beginning in Q3 2011 according to information from the Power Information Network. At that time, 22 percent of trade-ins were upside down; however, by Q1 2014, the percentage reached 27.3 percent after hitting 25.9 percent and 23.6 percent in the first quarters of 2013 and 2012, respectively.

The cause? Longer loan terms of 73 to 84 months (and now, beyond), increased subprime borrowing, and declining values in the used-car market as negative equity takes hold.

Regarding the aforementioned loan terms, Experian Automotive said the loans were the fastest growing category in Q4 2013 compared to the previous year, taking 20.1 percent of the new-car market and 23 percent of used-car retail volume in comparison to 19 percent and 12.5 percent respectively in Q4 2012. However, PIN senior director Thomas King explained that while 73+-month loans should be watched carefully, the only consumers who suffer from being upside down are those who roll the negative equity in their trade-ins into the next vehicle repeatedly.

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Off-Lease Consumers Add Fuel To New-Vehicle Demand Wed, 09 Apr 2014 14:15:54 +0000 Cadillac-Pre-owned

New-vehicle sales are on the rise due not only to demand originally held back by the Great Recession, but by consumers coming off of their leases for their next latest and greatest.

Automotive News reports Manheim Auctions chief economist Tom Webb proclaimed that off-lease volume will be on par with new-vehicle sales throughout 2014 before surpassing sales the following year and into 2016, forecasting over 3 million new leases signed in that year alone:

If you consider that new vehicles are increasingly being bought by high-income households that do, in fact, want to trade on a regular cycle, then they should be in a lease, not a retail contract.

Webb added that since residual risk “always has to reside somewhere,” the perfect place for such risk would be none other than the lessor “who has a portfolio of vehicles and hopefully also has a professional remarketing arm.”

Speaking of remarketing, Webb says the certified pre-owned market is in good health, with sales of CPO vehicles outpacing the off-lease market for the third consecutive year in 2014, with the latter providing the foundation stones for the former.

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Tesla Follows The Money, Launches Financing Arm Tue, 08 Apr 2014 17:29:12 +0000 550x365xtesla-model-s-logo-550x365.jpg.pagespeed.ic.C2rTVvi0LG

After setting up a retail lease program, Tesla is now moving closer towards a full-fledged captive financing arm, by launching a financing unit for corporate leases.

According to a statement released by Tesla,

The Tesla business lease is available through Tesla Finance, a subsidiary we’ve set up especially to offer this new product to business customers. The lease program completes a suite of products, including the Resale Value Guarantee and loans from our banking partners, that covers a comprehensive range of financing needs for Model S customers.

While Tesla touts the simplicity of the lease, which contains a simple agreement that can be completed electronically, the real news is the establishment of Tesla Finance. The business lease program could very well be a stepping stone to a full-blown captive financing arm for Tesla, which would enable them to expand sales of their future products to a wider customer base, as well as providing a new revenue channel for their auto manufacturing business.


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Cain’s Segments: Large Cars Tue, 08 Apr 2014 16:00:50 +0000 550x412xCharger-front-550x412.jpg.pagespeed.ic.KXQyYPzVIR

America’s large car category shed more than 18,000 sales in the first quarter of 2014 as new entities weren’t able to add enough sales to overcome the declines of established players.

The Nissan Maxima was the only volume-brand big car to record more sales in the first one-quarter of 2014 than during the first three months of 2013. In March, the Dodge Charger was the only volume-brand big car to generate a year-over-year sales increase.

March large car sales were down 5%, a loss of just under 3000 units.

Buick has posted only two months of improved LaCrosse sales in the United States in the last year. LaCrosse volume decreased in 2011 and 2012, then fell 17% in 2013 and is down 15% in 2014. Improved Regal sales over the last six months have softened the blow, but the Regal remains the lowest-volume Buick.

Elsewhere at GM, the desire to reposition the Impala upmarket has resulted in an anticipated sales decline. The Impala range continues to be one of America’s best-selling car lines: it ranks 15th among passenger cars year-to-date, down from 12th in Q1 2013. In a market where car sales have fallen 4% in 2014, GM’s car division is up 3% and Chevrolet car sales are up 6% (and 13% in March).

The Cruze’s 17% Q1 boost and the Corvette’s extra 5238 extra sales have carried the bulk of that increase. The SS, a car we knew was headed for niche status in its quest to steal sales from SRT Chryslers and Dodges, plays in the high-priced corner of this arena. Only 1283 have been sold since its introduction in the fall.

Chrysler and Dodge have combined to own 28.5% of the category’s early 2014 sales, up slightly from the 27.8% they achieved a year ago despite their decreased volume. Passenger car sales in Chrysler/Dodge/Fiat showrooms are down 20% this year as the Avenger dies off, the 200 awaits replacement, the Dart slides 30%, and the 300 and Charger suffer from the same affliction that is besetting other big cars.

Ford is kind enough to fill us in on specific Taurus Police Interceptor sales data. 887 of the 6576 Tauruses sold in the U.S. in March were not intended for civilians; 2285 of the 14,594 year-to-date. The Explorer Police Interceptor has generated 1415 more sales than its sedan counterpart so far this year. Sales of the conventional Taurus are down 28% to 12,309 units in 2014, less than what the Impala range managed in March alone. (Chevrolet has also sold 769 Caprice PPVs in 2014, up from 679 a year ago.)

Kia’s Cadenza has outsold the Hyundai Azera by 491 units since the Kia went on sale in April 2013. On four occasions between June and October of last year Kia managed to top 1000 units, selling more than 3300 Cadenzas in July and August combined. On admittedly subjective grounds, we’ve left the Hyundai Genesis and Equus, Kia K900, and Lexus ES off this list because of their premium standing. It’s arguable, and you will argue. But for the record, total Genesis sales were down 31% to 2170 units in March (down 35% to 5236 in Q1) in the lead-up to the replacement of the sedan’s portion of the lineup. Hyundai also sold 331 Equus luxo-barges and Kia sold its first 105 K900s. The ES was down by just 14 units to 6784 in March but is down 10% to 15,103 sales year-to-date.

Speaking of the Camry’s Lexus sibling, the latest Avalon got off to a rip-roaring start in December 2012, but those massive year-over-year increases were bound to come to an end. The bad news? Toyota isn’t selling as many Avalons this year as they did last year. The good news? Toyota should easily sell more than 50,000 Avalons this year, having sold an average of 31,000 Avalons per year between 2008 and 2012.

Nissan is having no problem selling more of their handsomely priced Maximas in 2014. But the year-over-year comparison only tells part of the story, as Maxima volume had fallen 9% to a four-year low in 2013, and Q1 2014 sales are actually down 17% compared with the first quarter of 2012. The Maxima’s replacement was foreshadowed by the Detroit auto show’s Sport Sedan Concept.

Passenger cars account for a smaller portion of the auto industry’s output this year than last. And after bringing in 7.9% of 2013’s first quarter car sales, these large cars are responsible for just 7.2% of America’s car market in 2014.

3 mos.
3 mos.
Buick LaCrosse
3550 4157 - 14.6% 10,522 11,372 - 7.5%
Chevrolet Impala
12,952 14,766 - 12.3% 36,858 44,343 - 16.9%
Chevrolet SS
350 865
Chrysler 300
5367 5686 - 5.6% 13,000 16,034 - 18.9%
Dodge Charger
10,816 9386 + 15.2% 24,956 26,098 - 4.4%
Ford Taurus
6576 7929 - 17.1% 14,594 19,442 - 24.9%
Hyundai Azera
760 1117 - 32.0% 2118 2709 - 21.8%
Kia Cadenza
868 2495
Nissan Maxima
6008 6088 - 1.3% 14,461 14,007 + 3.2%
Toyota Avalon
5946 6982 - 14.8% 13,295 17,525 - 24.1%
56,111 - 5.2% 133,164 151,530 - 12.1%
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Chevrolet Offers Incentives, Extends Truck Month To Take Back Sales Crown Mon, 07 Apr 2014 13:02:44 +0000 2014-Chevy-Silverado _12_

Though Ram knocked Chevrolet off the monthly sales throne for the first time since August 1999, the brand is ready to reclaim their part of Truck Mountain by offering incentives and extending their annual Truck Month into April.

Automotive News reports brand vice president Brian Sweeney threw down an additional $1,000 on the hoods of 2014 Silverado double-cabs in pursuit of “the heart of the pickup market.” Furthermore, Chevy’s second Truck Month boosts incentives offered last month, dropping a maximum discount of $8,974 into the bed of the Silverado 2500 HD crew cab or $8,162 for the light-duty double cab V8 model.

Lease offerings were also boosted for the reclamation battle, as one email from a Northeastern United States gave details for a regional lease agreement of $269 per month with $1,900 due upon signature; the Ram’s terms were $259 per month, but with a higher down payment of $2,999 upon signature.

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CARB ZEV Credit Restructuring Leaves Tesla With Fewer Credits Mon, 07 Apr 2014 13:01:11 +0000 tesla-model-s-logo

A change to the California Air Resources Board’s Zero-Emission Vehicle credit program will leave Tesla with four credits per car cold for the foreseeable future, down from seven credits for every Model S through 2013.

Bloomberg reports the change will award zero-emission vehicles with long-driving ranges and refueling times no greater than 15 minutes — such as the outgoing Honda FCX Clarity, with its hydrogen fuel cell technology — the maximum of nine credits, while Tesla — which had, until now, earned the maximum of seven — will receive four credits going forward due to failing the rapid-refueling requirement.

Tesla, the top seller of CARB ZEV credits to other automakers, has plans to introduce battery-swap stations that would allow drivers to exchange depleted packs for new ones in around one minute. However, until enough of the stations are in place, the 2014 Model S will be rebranded a Type III ZEV going forward.

The new standards — originally meant to be in place by October 2013 — were designed by CARB to emphasize actual use of ZEVs over theoretical capabilities.

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Fiat Adds Automatic Abarth, Young People “Don’t Drive A Manual Transmission” Mon, 07 Apr 2014 05:39:00 +0000
In a bid to boost sales of the Fiat 500 Turbo and Abarth, the two boosted versions of Fiat’s city car will get an optional automatic transmission.

Automotive News is reporting that Fiat will add the two-pedal gearbox in July, when the 2015 models begin production. While Fiat sold about 36,000 500s in the USA last year, around 5370 of those were Abarths, and Fiat boss Jason Stoicevich puts a lot of the blame on its manual-only configuration.

Speaking to AN, Stoicevich was blunt in his assesment of what was holding the Abarth back, stating

Frankly, [young people] just don’t drive a manual transmission,”

According to him, the addition of the auto could add another 2700 or so units to the Abarth’s sales tally. Overall, 500 sales have been down by about 13 percent year-over-year.

EDIT: 500 Abarth sales figures updated

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GM Adds Clinton Media Director To Crisis Team Fri, 04 Apr 2014 19:27:37 +0000 Original 5 tower complex, John Portman, 1977

In an interview with New York Magazine, consumer advocate Ralph Nader said General Motors CEO Mary Barra has “a good opportunity” to make serious changes to the corporate cost culture that gave rise to the 2014 ignition recall crisis. Suggestions include appointing an independent ombudsman with a direct line to the president and CEO for engineers who need to speak out about possible problems without having to go through “cost-concerned bosses,” as well as holding accountable all involved in any cover-up of any potential product issues.

Nader also believes the federal government should go after personal prosecutions of those tied to the current recall, but adds that unless the media keeps putting the pressure on the Justice Department to do so, the only thing that could come is a settlement in the vein of the one reached between the agency and Toyota earlier this month.

As for where Barra was during the 14 years it took for the recall to surface, Forbes wove her 34-year-long résumé with General Motors into the recall timeline. In short: Barra would have been made aware of the ignition switch problem as early as 2011, when then-CEO Dan Akerson made her head of global product development, yet it was only in December of 2013 — when the torch was passed from Akerson to Barra — when the new CEO was presented with an analysis of the issue linked to the Chevrolet Cobalt; the recall decision would be presented to Barra by product development chief Mark Reuss at the end of January 2014.

Detroit Free Press reports the National Highway Traffic Safety Administration received 200,000 from GM in response to the 107-question survey aimed to drill down what had happened leading up to the recall, as explained in a statement issued by the automaker:

The company has submitted some 200,000 pages of documents and will provide today answers to nearly 65% of the questions. GM is cooperating fully with NHTSA and is keeping the agency apprised at every step of its progress as it works to respond to the remaining questions within the Special Order.

The agency will release the documents upon vetting, a process that could take weeks to accomplish.

Meanwhile, Bloomberg reports the task force appointed by the Obama Administration to manage GM’s bankruptcy proceedings were not made aware of the out-of-spec ignition and subsequent reports linked to its failure. The task force spent more time focusing on what brands needed to be cut and how pensions and health care would be handled, with then-current product-liability claims — totaling $414 million pre-bankruptcy — given a broad look without looking ahead toward future claims.

Within the Capitol, the nation’s lawmakers are considering higher fines and criminal liability in the wake of the two congressional hearings earlier this week. Senator Jay Rockerfeller of West Virginia plans to propose an update to the 2000 TREAD Act in the aim of giving the NHTSA more firepower to take automakers to task over failures to properly and quickly handle potential problems, while regulators would like to boost the agency’s fine limit from $35 million to $300 million.

Back in Detroit, GM has hired crisis-communications expert and former director of media affairs for the Clinton Administration Jeff Eller to join the growing team of experienced crisis managers — including Kenneth Feinberg and Anton Valukas — assembled to guide the automaker through the ongoing recall debacle. Eller worked on the Firestone-Ford crisis in 2000, and will have a number of GM’s allies inside the Beltway on his side.

GM’s partner in the maelstrom, Delphi, may emerge less unscathed if the supplier’s stronger bankruptcy protections hold according to Reuters. Unlike the automaker, Delphi did not assume successor liability during its 2009 bankruptcy proceedings, forcing lawyers to convince any judge who hears their cases that Delphi covered-up the design flaw, and thus, should force “New Delphi” into becoming liable.

Speaking of lawsuits, Bloomberg reports U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas is preparing to consider issuing an order to GM to instruct all affected consumers to park their vehicles until the flaw is fixed. The order is part of a class-action lawsuit filed by Robert Hilliard on behalf of Charles and Grace Silvas, seeking as much as $10 billion in lost resale value for the vehicles under the recall. The Detroit News adds Hilliard sent an email to Barra with evidence from an affidavit illustrating that even with the key stripped down to the bone, the switch will still shut the vehicle off, including the airbag system.

Finally, Reuters reports GM dealerships may have more than polar vortices to weather on the sales floor as a result of the recall. Dealers have reported fielding as many as 50 calls per day from concerned consumers over what to do with their affected vehicles, as well as offering more rental cars and taking in more trade-ins. Spokesman Jim Cain offered his view on the situation facing dealers:

Time will tell. In the long term, we will be judged on how we take care of customers. We have advertising incentives and other tools to use if there’s evidence that sales in the short term may be impacted. But we haven’t seen that.

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Cain’s Segments: Q1 2014 Full-Size Truck Sales Fri, 04 Apr 2014 15:16:43 +0000 450x244x2014-Chevrolet-Silverado-1500-Exterior-006-450x244.jpg.pagespeed.ic.zAXX8qzO80

Year-over-year comparisons are a completely valid comparison tool, indeed a vital one, when analyzing the sales volume reported by automobile manufacturers. The auto industry is seasonal; cyclical at the best of times. The number of vehicles sold in say, January, bears little resemblance to the number of vehicles sold in May.

Studying the market share changes from one month to the next, rather than in a year-over-year fashion, is also a perfectly useful yardstick, even if certain automakers do uniquely prioritize certain seasons. And so we consider America’s March 2014 pickup truck sales figures, in which GM’s two full-size trucks suffered a market share decline in the full-size truck category from 32.1% in March 2013 to 31.9% in March 2014.

Yet much worse was the drop from February’s 35% (which itself was down from 39.1% in the previous February) to last month’s 31.9%. The market share owned by the Chevrolet Silverado and GMC Sierra in January 2014 was, at 33.3%, also superior to March’s tally, and also way down from the previous January’s 38.9%.

News that the Ram P/U – formerly known as the Dodge Ram – outsold the Silverado in March was greeted both by many a headline and a harsh rebuke from General Motors. Regardless of how you view the General Motors truck partnership, as a solitary unit with two faces or as two separate entities, GM’s twins outsold the Ram by 16,578 units in March.

Ram sales shot up 26% to 42,532 units, equal to 22.9% of the full-size truck category. Those gains undoubtedly ate into GM’s total, but the Ram and Toyota Tundra also worked together to steal some of Ford’s market share, as well.

Ford’s slower growth is more understandable and more acceptable given the state of their current truck. It’s about to be replaced. Meanwhile, Ford topped 70,000 F-Series sales for the fourth time in the last eleven months, no mean feat.

With 11,589 sales, Toyota topped the 10K mark for the fourth time in the last eight months. Toyota had done so only twice in the previous 31 months. At the current pace, Toyota could sell more than 130,000 Tundras in America for the first time since 2008. In fact, Toyota hadn’t sold this many Tundras in a single month since August of that year. Clearly Tundra volume remains low in comparison to Detroit’s big trucks, but that doesn’t make it a rarely seen vehicle. The Tundra ranked 41st among all new vehicle nameplates in Q1, up from 48th in the Q1 of 2013.

Purely on volume terms, Toyota’s 25% increase was moderate. 2319 more Tundras were sold in March 2014 than in March 2013; Chevy’s 7% March improvement equalled 2686 extra sales. 2014 marked the fifth consecutive year in which Silverado volume improved in the month of March. The problem for General Motors, from an outsider’s perspective, isn’t the Ram’s ability to grab the number two spot, nor is it the fact that Silverado growth was well below the segment’s average. GM points to transaction prices – and Chrysler’s incentives – as a sign of health, and one wouldn’t dare argue that making more money off more trucks is a bad thing.

Yet a strategy that consistently requires the Silverado and Sierra to eat an increasingly smaller portion of an increasingly larger pie is a scheme that’s not terribly worthy of applause in one of the most hotly-contested, highest-volume vehicle categories in the industry.

3 mos.
3 mos.
Ford F-Series
70,940 67,513 + 5.1% 173,358 168,843 + 5.4%
Ram P/U
42,532 33,831 + 25.7% 96,906 77,594 + 24.9%
Chevrolet Silverado
42,247 39,561 + 6.8% 107,757 116,649 - 7.6%
GMC Sierra
16,863 13,817 + 22.0% 42,213 40,796 + 3.5%
Toyota Tundra
11,589 9270 + 25.0% 27,402 23,580 + 16.2%
Nissan Titan
1314 2084 - 36.9% 3318 5112 - 35.1%
166,076 + 11.7% 450,954 432,574 + 4.2%


3 mos.
3 mos.
Ford F-Series
38.2% 40.7% 38.4% 39.0%
Chevrolet Silverado/GMC Sierra
31.9% 32.1% 33.3% 36.4%
Ram P/U
22.9% 20.4% 21.5% 17.9%
Toyota Tundra
6.2% 5.6% 6.1% 5.5%
Nissan Titan
0.7% 1.3% 0.7% 1.2%
Full-Size Share Of
Total Pickup Truck Market
89.8% 86.1% 88.8% 86.8%
Full-Size Pickup Share
Of Total Industry
12.1% 11.4% 12.0% 11.7%
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Mitsubishi Outlander PHEV Arrives In UK Showrooms Minus Premium Price Fri, 04 Apr 2014 12:04:34 +0000 03-2013-mitsubishi-outlander-phev-paris

Already available throughout Europe, the Mitsubishi Outlander PHEV is now just arriving in United Kingdom showrooms at a post-credit price tag of £28,249 ($47,000 USD).

Autoblog Green reports the plug-in hybrid SUV without the £5,000 credit would start at £33,249 ($55,000 USD), but with the credit, the starting price is around the same level as its diesel-powered sibling, thus allowing UK consumers to pick the SUV they want without worrying too much about affordability.

As for what they will get out of their Outlander PHEV, the hybrid has a range of 32 miles in all-electric at a limited speed of 75 mph, and can tow over 3,000 lbs.

On sale now, the first SUVs will arrive in May, with the PHEV arriving in the United States in 2015, which will share a facelift with its U.S.-based gasoline-powered twin. No word on how the PHEV will be priced in the U.S.

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Subaru May Revive The WRX Hatchback Fri, 04 Apr 2014 11:10:18 +0000 2015-Subaru-WRX-blue-tree_rdax_646x396

Strong sales of the WRX hatchback in America have led Subaru to re-consider their “sedan only” policy for the current generation WRX.

An Australian enthusiast site spoke to WRX Project General Manager Masuo Takatsu, who said that strong demand for the hatch in America (where it accounted for half of WRX sales) has led them to re-consider their plans

“We have received strong interest from the US, where the hatchback was 50 per cent (of previous-generation WRX sales), so we’re now considering. The main target for WRX is the US…Japan is number two, Australia number three. Basically, we target these three markets.”

Takatsu said that limited resources were behind the lack of a hatch at launch, and interestingly, a two-pedal variant of the STi. Subaru’s Australian arm eventually expects the CVT powered WRX to account for as much as 50 percent of WRX sales, though the hatch has always been a much weaker play.

Oddly, the 90+ percent take rate for the sedan in Australia runs counter to its competitors like the VW Golf GTI, Ford Focus ST and Renaultsport Megane, which are all hatches. On the other hand, Americans are notoriously fond of sedans, but are the biggers buyers of WRX hatchbacks.

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Answer Of The Day: Reader Response To The ELR Sales Question Fri, 04 Apr 2014 09:00:17 +0000 cadillac-elr-ad

The best comment on the ELR sales and inventory figures post didn’t even come from the comment section. Instead, it ended up in the TTAC reader feedback inbox.

One of our readers, who asked for his name to be withheld, had this to say about my ELR post

Not trying to excuse the elr….but you have to look at inventory on it with some sort of intelligence… not the usual approach. There are about 500 elr dealers…. do the frickin math.

Two units per store. Some have more….some have less. You act as if there are ELRs pouring onto the streets.

OEM has to supply the dealers who signed up to sell it right? Launches have to fill the channels…. you write like Cadillac is drunkenly building these without a clue.

Our reader certainly has a point, but I still think that there are too many examples on the lots, given how these cars are selling.  And the high price tag – even if most of these cars will be leased – makes it a hard sell, especially against a Tesla Model S.

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