April 2, 2015
March Sales a Mixed Bag for Dealers
Automakers experienced mixed sales results in March, reports AIADA’s March issue of Market Watch. Toyota’s sales surged to 194,905 vehicles for a 4.4 percent improvement over March 2014. Hyundai, up 12 percent; Kia, up 7.3 percent; and Subaru, up 10.4 percent; all thrived in March despite bitter cold covering much of the country. In contrast, Honda’s sales fell 5.2 percent, Nissan slipped 3 percent, and Volkswagen’s sales were down 18.2 percent from a year ago. “Consistently low gas prices and healthy consumer demand are working in dealers’ favor,” said AIADA President Cody Lusk. “At this pace, the industry could be looking at its sixth consecutive year of growth.” International brands sold 867,097 vehicles in March, up from 685,118 in February and occupied 56.1 percent of the U.S. market, compared to 54.5 percent last month. AutoData Corp. reports that the seasonally adjusted annual rate (SAAR) reached 17.15 million units in March, compared to 16.49 million units a year ago. Industrywide, 1,545,802 light vehicles were sold last month. Sales for all brands, unadjusted for business days, were up 0.6 percent from March 2014. Click here for more from AIADA’s March edition of Market Watch.
Porsche Says Macan May Pass Cayenne as U.S. No. 1
According to Automotive News, Porsche said the new Macan compact crossover could pass the larger Cayenne SUV to become the brand's top-selling U.S. model. The Macan, which debuted in the spring of last year, will have its first full year of availability in 2015. In the U.S., Porsche's largest market, the crossover could match or surpass levels of the Cayenne, which accounted for a volume of 16,000 units in 2014, Porsche sales chief Bernhard Maier said on Wednesday. Porsche sold 3,526 Cayennes and 2,600 Macans in the U.S. through March, according to the Automotive News Data Center. Volkswagen-owned Porsche, the No. 2 contributor to VW Group profit behind luxury brand Audi, sold 7,241 Macans in the U.S. last year. The Macan was Porsche's best-seller in Europe with a volume of 3,457 in the first two months, according to JATO Dynamics. The Cayenne was No. 2 with 2,762 sales. Separately, Maier reaffirmed expectations that Porsche's global deliveries will exceed 200,000 cars this year, hitting a long-planned target three years early. For more on Porsche’s projections for its Macan, click here.
Carmakers Amp Up Passenger Cars to Compete with SUVs
Automakers are rolling out larger, more aggressive-looking cars at the New York International Auto Show as they face growing competition from crossovers and SUVs, reports The Detroit News. With more buyers opting for pricier crossovers built on car platforms, automakers are raising the bar by making their sometimes boring small and midsize cars more attractive. They are touting "premium" features like 7-inch infotainment screens and upgraded interiors, in cars as low as $16,000. "Automakers are trying to push envelope to make more fun, more interesting, less family-hauler type of vehicles," Edmunds.com senior analyst Jessica Caldwell said. Styling has been amped up in the midsize segment, she said, with looks that are "less pragmatic and more emotional." At the show, automakers are rolling out new versions of cars like the Honda Civic, Chevrolet Malibu, Kia Optima, Nissan Maxima, and Chevrolet Spark to compete with the flurry of new SUVs being introduced, including the Mercedes-Benz GLE, Lexus RX, Toyota RAV4, and Infiniti QX50. Honda Motor Co. unveiled a dramatic, larger Civic—a car that's always been aimed at value-oriented buyers looking for reliable but modest transportation. Read more about how automakers are trying to make their cars more competitive with SUVs here.
Ford, Mercedes-Benz Set Up Shop in Silicon Valley
According to The Wall Street Journal, four decades ago, Japanese auto companies anticipated U.S. demand for fuel efficient cars and hit the market with vehicles that caught the Detroit Three by surprise, permanently altering the ranks of the biggest automakers. Today, the disrupters are bubbling up from California’s Silicon Valley. As software giants and startups rush to make smarter vehicles, established carmakers are scrambling to avoid becoming victims of another sea change. “What happened with the mobile industry with the smartphone is about to happen with the car,” said Jen-Hsun Huang, chief executive of Santa Clara, Calif.-based chip maker Nvidia Corp. The most common response: setting up research offices in the technology industry’s backyard. Click here for a map of offices. Most major car makers and many of the top auto suppliers, including Robert Bosch GmbH and Delphi Automotive PLC have Bay Area research outposts. German luxury brands have been picking up talent and technology here since the 1990s. The location gives them access to the region’s tech powerhouses, including Google Inc. and Apple Inc. who are vying for a piece of the automotive market. Read more about how automakers are tapping into Silicon Valley by clicking here.
With Car Dealerships' Ranks Thinned, the Survivors Thrive
Only a few years ago, in the depths of the recession, the local car dealership seemed to be living on borrowed time. Now, reports The New York Times, with the economy back, auto sales are booming, and investors seemingly cannot get enough of the hardscrabble business of “moving metal.” Last month, Berkshire Hathaway, Warren E. Buffett’s holding company, completed its acquisition of the Van Tuyl Group, the largest privately held dealership group in the country. The franchise car dealer is not only surviving, but even thriving. A big reason for the revival is the simple math of fewer locations receiving more business. But industry experts say the story goes much deeper than that, and reflects a profound shift in the business model of auto sales. Dealerships increasingly have the high-tech atmosphere of an Apple Store, and consumers arrive fully informed about a car’s features and price. It’s a marked departure from the high-pressure sales environment traditionally associated with dealerships. New technology is not only changing the car-buying experience, but it is also fostering rapid consolidation in the industry. Larger corporations are expanding their reach over more locations. Read more of The New York Times’ coverage of the shifting auto retail industry by clicking here.
An Industry in Action: Register Today for AIADA's Auto Summit
Make your voice heard in Washington, D.C., by joining AIADA May 11-12 for the 9th Annual International Auto Industry Summit. AIADA has a full program of speakers lined up, starting with our opening dinner, headlined by Robert O'Neill—a renowned member of Navy SEAL Team 6—who will discuss his involvement in several high-profile operations. Dealers will also hear from Erin Kerrigan, managing director of Kerrigan Advisors, on the state of the dealership buy/sell market; congressional speakers; and Washington, D.C., insiders like Politico's chief White House Correspondent, Mike Allen. Gen Y Guy® Jason Dorsey will help dealers understand how to connect with millennial employees and customers. Additionally, AIADA and Global Automakers will unveil the results of this year's Economic Impact Survey, and OEM executives from Hyundai, Toyota, and Subaru will be on hand for the always-popular panel discussion. Please, do not wait. Registration for AIADA's 9th Annual International Auto Industry Summit is limited. Register now by clicking here or calling 1-800-GO-AIADA.
Around the Web
Fisker Karma Set to Return This Month? [MotorAuthority]
Prosecutors Ease Crackdown on Buyers of China-Bound Luxury Cars [CNBC]
Luxury Cars Do Battle at NY Auto Show [WSJ]
2016 Lexus RX makes World Debut [Detroit Free Press]