This week’s Ur-Turn comes from David Ruggles, a noted industry figure, prolific TTAC commenter and author of the Autos and Economics blog.
In my 44 years in the auto industry there have been a couple of continuing themes I have observed. First, there is never ending change. Second, consumers are uncomfortable with the negotiating process required when buying a vehicle. These days vendors to auto dealers are trying to sell dealers on the concept that “transparency” is the key to success in selling cars.
I have this feeling that our most impressionable automotive years are our high school years. Maybe it’s because I was so eager to drive that I noticed anything with wheels. Maybe it’s that auto shop class where I got to wrench on a Wankel (that sounds wrong doesn’t it?). Whatever the reason, it seems many of my brand and model name identities were formed in the mid 1990s. For me, “Impala” doesn’t conjure up the W-Body abomination GM has been selling for the past 13 years. Instead “my” Impala has always been the 1994-1996 Caprice Impala SS with the 5.7L Corvette LT1 engine. This is my benchmark on which every Impala must be judged.
TTAC has a long tradition of digging deep into manufacturer sales data, frequently focusing on retail versus fleet sales. It’s become commonly accepted that high fleet percentages are a sign of weakness in product lines, at least as far as retail consumer preference goes. The traditionally low fleet percentages of Japanese brands have been singled out as evidence of those companies’ ability to attract crucial retail dollars, or at least their superiority in matching production to demand. And they were right. For many years, Toyota and Honda in particular could count on strong retail sales of premium-priced products in a way that the Big 3 couldn’t. Changing trends in the American vehicle market are undermining this model, though.
I’m a longtime reader of the blog, and also have been car less for the past 17 years. I live in a major Pacific Northwest city and haven’t needed a car. But I’m getting older, I’m partnered up and need to visit in-laws out in the boonies, and I just find myself wanting a car. I don’t want an older car. The two cars I did own back in my teens and early 20s were a 1980s Buick Skylark and a 1988 Dodge Omni. I think dealing with the repairs on those two beaters put a bad taste in my mouth for very old cars. So I’m looking at new or slightly used. (Read More…)
Google’s autonomous car program tends to get the lion’s share of attention when discussing the tech giant’s auto initiatives. But lurking in the background is a more immediate project that has the potential to finally “disrupt” (as Silicon Valley types are so fond of saying) online automotive sales.
I told you that I would report back to the TTAC faithful when something new came up.
Well, for quite a few weeks there has been the usual distribution of dominance when it comes to high mileage cars that are curbed by their owners. 70% to 80% of the vehicles in the Top 25 of trade-ins mileage wise (out of 6000+ a week) were either Ford and Chevy trucks, Honda cars, or Toyota anything.
This week the streak is broken. Thanks to two Saturns which managed to cross the 400k mark.
Throughout the history of the automobile in America, one city has been synonymous with the industry and culture of cars. Booming with America’s great period of industrialization, Detroit became the Motor City, the hometown of an industry that created a blue-collar middle class and a culture based on personal mobility. But as America has entered the post-industrial age, as the focus of our economy has shifted from production to consumption, Detroit has been left behind. Long used to defining consumer tastes, Detroit was caught unawares by the changes wrought by globalization and the rise of information technology. And as America’s traditional auto industry struggles to redefine itself in the new economy, another Motor City is rising to meet the challenges of a new age.
One month is far too premature to make any predictions about 2012′s sales race, but we still got our hands on the data, thanks to independent analyst Timothy Cain. As usual, the Ford F-Series and Toyota Camry were the top dogs.
Are car buyers rational? Anyone who deals with car-shopping consumers on a regular basis would probably answer with a hearty “no.” In fact in my experience, helping prospective car buyers navigate the many considerations and options available on the market usually ends with me throwing up my hands and saying “if you like a car, just buy it.” But according to research cited by Wired’s Jonah Lehrer, conscious reasoning might not be the ideal way to shop for a car in the first place. Sometimes “going with the gut,” and making a decision without thinking it through is the best way to solve complex choices like finding the car that’s perfect for you.
Conventional wisdom says that the Chinese will suck all the know-how out of their foreign joint venture partners, and once they are through with them, they’ll discard them like Dracula a bloodless virgin. As a thank you, the Chinese will flood foreign countries with cheap Chinese cars. The trouble with conventional wisdom is that it is rarely true, or wise. Actually, the Chinese are now worried that the foreigners amass too much power. “Foreign car producers have begun to take more control of their joint ventures in China, sidelining their Chinese counterparts from business partners to factory providers,” China Daily writes today. China Daily is owned by the Chinese government. (Read More…)
Nissan’s “we have cars” ad may not meet with the approval of TTAC’s commenters, but it appears to be having some kind of effect. According to mid-month analysis by the A+ rated experts at Edmunds Autoobserver, Nissan’s looking at the strongest retail sales growth in the industry this month, building on last month’s already-strong performance. (Read More…)
The internet has been a boon for car buyers in a million ways, but for new car marketers it’s been a decidedly mixed bag. GM’s California-only experiment selling new cars over eBay was quickly abandoned, after generating moreembarrassment than sales. Now, another high-ish profile online new car marketing gag has flopped, as Autoweek reports that Groupon’s car debut is going nowhere:
Only four consumers agreed to pay $200 for a $500 discount voucher on a new-vehicle purchase at LaFontaine Buick-GMC-Cadillac in Highland, Mich. Groupon and LaFontaine had set 10 as the minimum required for the vouchers to be issued.
I missed the latest twist in Chrysler’s California dealer drama when I was traveling in Iowa last week, but because it’s such a significant story (and because Ford recently proved how expensive dealer drama can be), we’ll commit the cardinal rule of blogging and take a look at some week-old “news.” California’s DMV won’t report the findings of its investigation into Chrysler’s allegedly non-compliant “company store” until September 29, but the Detroit News has reported that ”about 75 percent” of these dealer complaint cases end in settlement and that
Chrysler Group LLC may be on the verge of selling its company-owned flagship dealership in Los Angeles to a private retailer, which could appease angry franchise dealers in California.
So much for ChryCo leaving the state in an angry huff. In fact, angry is about the last thing CEO Sergio Marchionne sounds about the whole thing…