June new car sales expected to dip: JD Power and LMC Automotive

DETROIT: June 2016 — New-vehicle retail sales in June are expected to reach 1,206,700 units, a 0.5% decline from a year ago on a selling-day adjusted basis, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail sales through the first half of 2016 are projected to reach 6.8 million units, down 0.2% from the same period in 2015. With the sales slowdown expected to continue in the second half of the year, LMC Automotive is reducing its retail light-vehicle sales forecast for the year to 14.2 million units from 14.3 million units.

  • The seasonally adjusted annualized rate (SAAR) for retail sales in June 2016 is projected to reach 13.3 million units, down from 13.5 million units in June 2015.
  • New-vehicle retail transaction prices thus far in June are at an all-time high for the month at $31,089. The previous record was $30,202, set in June 2015. Incentives are also at a record high for the month of June at $3,278 per vehicle, $119 per vehicle more than the previous high in June 2015.
  • With record transaction prices, consumers are on pace to spend $37.5 billion on new vehicles in June, surpassing the record high of $35.2 billion for the month of June, set in 2015.
  • Increased fleet sales are expected to off-set slower retail sales, increasing total light-vehicle sales in June to 1,546,800, a 0.8% increase on a selling-day adjusted basis from 1,475,062 a year ago. Fleet sales are expected to hit 340,000, a 5.9% increase from 308,640 in June 2015 on a selling-day adjusted basis.
  • The SAAR for total sales is projected at 17.0 million units in June 2016, the same level as a year ago.
  • The lower level of retail sales has had an impact on the total light-vehicle market. LMC Automotive is maintaining its full-year forecast at 17.7 million, but cautions that volume may be at risk, as rising fleet sales may not be enough to maintain total volume.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

  June 20161 May 2016 June 2015
New-Vehicle Retail Sales 1,206,700 units

(0.5% lower than June 2015)2

1,207,853 units 1,166,422 units
Total Vehicle Sales 1,546,800 units

(0.8% higher than June 2015)2

1,535,331 units 1,475,062 units
Retail SAAR 13.3 million units 13.7 million units 13.5 million units
Total SAAR 17.0 million units 17.4 million units 17.0 million units

1Figures cited for June 2016 are forecasted based on the first 16 selling days of the month.

2The percentage change is adjusted based on the number of selling days in the month (26 days in June 2016 vs. 25 days in June 2015).

John Humphrey, senior vice president of the global automotive practice at J.D. Power, said: “We have seen a slowdown in retail demand since April, posing a significant challenge to manufacturers on a volume basis. Despite sales slowing down, consumer spending remains at record levels due in large part to a continued shift from cars to trucks. The key going forward will be to what degree automakers are able to adjust production levels to slowing demand rather than relying on profit-damaging incentives to move inventory. This will be something to watch as the industry is nearing what is close to being the peak of an average cycle.”

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “Year-over-year growth is evaporating, and while we are now expecting a slight contraction in retail sales, the total light-vehicle market should remain 1% higher than 2015. However, risks continue to mount for the second half of 2016, with 200,000-300,000 units of volume risk. If the selling rate averages 17.5 million units, which is higher than the projected 17.1 million-unit pace in the first half of the year, total sales for the year will end at 17.4 million units, or a decline of 0.3% from 2015.”

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And the 10 lowest rated cars are …..

BY GERRY MILES

There are the Razzies, the jazzies and many other names for things in the worst of categories that hold an unwanted place in the American desire to rank so many things.

Consumer Reports, which rates everything from dishwashers to xylophones it seems has released its lowest-rated cars in 10 categories with the overall lowest scores.

Their hope to avoid your purchasing a clunker to replace the one you’re trading away. To paraphrase their report, everything but these vehicles is a better choice.

The Overall Score offers a complete perspective on each model, combining road-test score, reliability, owner satisfaction, and safety, including government and insurance industry crash-test results.

Several of these vehicles are due for replacement this year, and are likely to be carrying significant incentives, or at least have some generous negotiating room. As the maxim goes, great deals are rarely found on great cars. In these cases, falling for a smooth sales pitch and a swell cash-back offer could lead you to suffering years of buyer’s remorse.

To quote the Consumer Reports release; “avoid one of the worst cars of 2016 and other subpar vehicles, check all of our tested vehicles. Better yet, skip right to our 10 Top Picks of 2016 to see the truly exemplary models.”

Remember forewarned is forearmed. Let the buyer beware.

The Lowest-Rated Cars in 10 Categories:
Lowest-Rated Subcompact: Mitsubishi Mirage
Lowest-Rated Compact: Fiat 500L
Lowest-Rated Midsized Sedan: Chrysler 200
Lowest-Rated Compact Luxury Car: Mercedes-Benz CLA250
Lowest-Rated Midsized Luxury Car: Lincoln MKS
Lowest-Rated Family SUV: Dodge Journey
Lowest-Rated Luxury Compact SUV: Land Rover Discovery Sport
Lowest-Rated Large Luxury SUV: Cadillac Escalade
Lowest-Rated Minivan: Chrysler Town & Country
Lowest-Rated Green Car: Mitsubishi i-MiEV

 

Consultant pulls curtain on Big 3 in Detroit

After the Detroit Auto Show wowed everyone with new models, some were left noticeably nonplussed, skeptical and doubting. James Bell, an independent consultant for the automotive industry with nearly 20 years of experience, including Kelley Blue Book and General Motors, instead opined on what he saw at the Detroit Auto Show from the Big 3.

“Much has been made of the recent resurgence and sales success of the “Detroit 3”, said Bell, who also offered to look a little closer behind each curtain:
  • Ford disappointed many at the last month’s Detroit Auto Show when their “big news” was not a new car or truck but rather BIG investments in connectivity, autonomy, mobility/ride sharing, and the customer “experience.”

Not until later in the week did they make decent product news by announcing four new SUVs in next few years.

  • FCA provided some fun with the “this is NOT a minivan” Pacifica and lots of love for the high margin Jeep and Ram brands in effort to avoid its darker ironic reality of overall financial drama as evidenced by delayed updates to key products such as the Grand Cherokee and Ram. And they announced the death of the Chrysler 200 and Dodge Dart sedans until another maker can be roped into producing one car for both brands. In both cases, it seems that, as in the early 2000’s, the hypnotic dance of the cheap fuel cobra has worked its magic once and lulled these companies into complacency thanks to profitable truck and SUV sales.
  • Only GM seems to be planning for a more realistic future by using today’s false windfall to keep the pedal down on alternative fuel vehicles like the Chevrolet Volt and Bolt, even in the face of fewer sales in the near term. Seems GM might have learned a lesson from bankruptcy after all.”

New vehicle sales may jump 8.1% in February: JD Power

DETROIT, Mich. — New-vehicle sales in February 2016 are expected to increase 8.1% from a year ago, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

New-vehicle retail sales in February are projected to reach 1,046,700 units from 968,316 in February 2015, with the same number of selling days (24 days).

The seasonally adjusted annualized rate (SAAR) for retail sales in February 2016 is expected to reach 13.9 million units, up significantly from 12.8 million units in February 2015 and the strongest retail SAAR in the month of February since 2002 (14.7 million).

Total light-vehicle sales are expected to reach 1,357,800, up from 1,255,769 from a year ago.

The SAAR for total sales is projected to reach 17.7 million units in February 2016, up 1.4 million units from 16.4 million a year ago and the highest rate since 2000 (18.9 million).

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

February 2016    January 2016     February 2015

New-Vehicle Retail Sales
1,046,700 units    892,119 units    968,316 units
(8.1% higher than Feb. 2015)
Total Vehicle Sales
1,357,800 units     1,147,132         1,255,769
(8.1% higher than Feb. 2015)
Retail SAAR
13.9 million units   14.1m units        12.8m units
Total SAAR                           17.7 million units    17.6m units        16.4m units

Figures cited for February 2016 are forecasted based on the first 11 selling days of the month.

Thus far this month, the compact car segment posts the highest retail sales in the industry for the second consecutive month. Demand for compact cars is driven, in part, by product activity: high incentives that are offered on outgoing vehicles ahead of the launch of the redesigned vehicle attract the budget-conscious, while all-new or redesigned models revitalize interest in the segment. Unfortunately, the improvement in compact car sales is not enough to offset weakening demand for cars overall, with market share for cars at only 42%, the lowest level on record for the month of February.

Consumers are on track to spend more than $32 billion on new vehicles in February, nearly $3 billion more than in February 2015 and for the first time exceeding $30 billion in the month of February.

Customers are opting for leasing and long-term loans at record levels. So far in February, leases and loans of 72 months or longer combine to represent 65.1% of all retail sales, a record level for any month. The previous record was set in January 2016 at 64.3%.

John Humphrey, senior vice president of the global automotive practice at J.D. Power, said: “The year-over-year sales growth projection for February is strong, but we need to keep in mind that it is aided by the fact that sales in the upper East Coast, Midwest and Texas were hampered by weather last February. To further put the February sales projection into context, while the retail SAAR of 13.9 million is unquestionably a high level of vehicle demand, it is the lowest monthly level since last June and well below the 15.3 million pace last September.”

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “Thus far, 2016 is off to the races, with February looking to keep the selling rate in line with expectations. Consumers seem to be shrugging off the volatility in the stock market and higher interest rates. Very low fuel prices and many new vehicles in showrooms should help drive another strong year for auto sales.”

LMC Automotive’s forecast for 2016 remains 17.8 million units for total light-vehicle sales and 14.5 million units for retail light-vehicle sales.

Lando ‘Defender 2,000,000’ gavels for £400,000 at Bonhams Charity Auction

Land Rover Defender

Land Rover Defender

 London – A one-of-a-kind Land Rover Defender sold for a record £400,000 at a prestigious charity auction at Bonhams tonight, from which all proceeds are being donated to Land Rover’s humanitarian and conservation partners. This is the thought to be the most valuable production Land Rover ever to be sold at auction.

The unique vehicle, the two-millionth of the iconic Series Land Rover and Defender models manufactured at Land Rover’s Solihull plant since 1948, was sold to a bidder from Qatar. The vehicle was built in May 2015 by an all-star cast of brand ambassadors and people from Land Rover’s history including Bear Grylls, Virginia McKenna OBE and Stephen and Nick Wilks, sons of the founders of Land Rover. All proceeds from the sale will be donated to Land Rover’s humanitarian and conservation partners: the International Federation of Red Cross and Red Crescent Societies (IFRC), who will use the donation to help communities in South-East Nepal to improve how they tackle natural disasters, and the Born Free Foundation who plan to use the funds to support the ‘Project Lion Rover’ wildlife conservation initiative in Meru National Park, Kenya. The project provides critical equipment to help protect lions and other wildlife and establishes education and community involvement to tackle issues such as snaring and poaching.

Vehicle’s perception of reliability influence new car shopping: JD Power Auto Avoider Study

bug-used-car Consumers Likely Reacting to Negative Publicity about Recalls and Tech Failures

BY GERRY MILES

Okay, it “may” be a cliche that perception is reality, but new data is proving that it does matter and where retailers will hurt the most: in the showroom.

For the first time in nearly a decade, concerns about reliability have increased as a reason shoppers avoid certain models, according to the J.D. Power 2016 U.S. Auto Avoider StudySM released today.

The study, now in its 13th year, examines the reasons consumers purchase, reject and avoid models in the marketplace when shopping for a new vehicle. The 2016 study measures shopping behavior among new-vehicle buyers who purchased during 2015.

B0G7Y4 Car dealership forecourt Miami Florida USA

Vehicle reliability has become a top consideration in deciding which vehicle to buy. This year, 55% of new-vehicle buyers cite reliability as a leading purchase reason—the third-most frequently cited reason after exterior and interior styling—vs. 51% in the 2015 study. Notably, as recently as 2013, vehicle reliability was mentioned by just 48% of new-vehicle buyers as a reason for purchasing. Reliability has also become a greater reason shoppers do not consider―or avoid―other models (17% in 2016 vs. 14% last year).

“Though vehicle reliability and durability have improved significantly over the years, they remain a vital consideration for consumers,” said Dave Sargent, vice president, quality practice, J.D. Power. “With so many auto recalls in the news and challenges with the introduction of new technology, consumers are even more attuned to the expected reliability of new vehicles. This impacts which models consumers avoid and which ones they ultimately purchase. Bad news can tarnish an automaker’s reputation in an instant, yet, can take years to build back up. Automakers need to convince consumers of the true reliability of their vehicles so it is not a reason to avoid selecting a particular model.”

According to Sargent, “concerns with vehicle reliability can also have a ripple effect on other aspects of vehicle consideration and ownership.” Study findings show that buyers who avoid models for reliability reasons tend to also have concerns regarding resale value, cost of maintenance and even safety.

As gas prices remain low, fuel economy has become a less frequently cited reason consumers select their new vehicle (51% vs. 55% last year). In fact, gas mileage has reached a five-year low as a reason to purchase a specific model. It is also cited less frequently as a reason to reject other models that were considered.

More than half (54%) of new-vehicle owners who replaced a vehicle buy the same brand or a brand within the same corporation, while 46% bought a vehicle from a different corporation entirely. Both premium and non-premium brand replacers say the top reason for not repurchasing the same brand is they “simply wanted to try something different.”

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“This is a major challenge for auto marketers,” said Sargent. “In the auto industry, building consumer trust, loyalty and advocacy is paramount to ongoing success. However, there are so many great vehicles available to consumers that merely satisfying your customers is simply the cost of entry. To truly succeed, automakers must keep their exterior and interior designs fresh, ensure competitive performance and fuel economy levels, offer an array of advanced technology and achieve an excellent reputation for vehicle reliability.”

Following are some of the key findings of the 2016 study:

  •  Top Reasons Shoppers Buy/Avoid a Vehicle: Exterior styling is the top reason shoppers buy a particular model (59%). It is also the top reason to avoid a particular vehicle (31%), followed by the vehicle costs too much and interior styling (18% each).
  • Perception of Reliability Weighs Heavily on Purchase Decision: Despite industry-wide efforts to improve reliability, the fact that reliability emerges as a key driver of purchase and avoidance underscores the importance of customer sentiment and perception in an environment of highly publicized recalls.
  • Car Buyers Doing Less Window Shopping: Since 2012, new-vehicle buyers are considering fewer models and shopping fewer dealers. On average, buyers physically shop only three models, one of which they buy.
  • Domestic Brands vs. European and Asian Brands: There remains a significant disconnect between perception and reality regarding the reliability of domestic brands compared with European and Asian brands. Avoidance of domestic models due to reliability concerns (24%) is nearly twice that of European (13%) and Asian (12%) models. In reality, the actual reliability of most domestic models is competitive with that of their import competitors.

The 2016 U.S. Auto Avoider Study is based on responses from nearly 26,500 owners who registered a new vehicle in April and May 2015. The study was fielded between July and September 2015.

Michelin shows off new Pilot Sport All-season 3+ Tire

PLT_0824_Mercedes_Ocean_17i

Latest Pilot family tire delivers incredible wet, dry and winter performance

 DETROIT –   At the North American International Auto Show, Michelin introduced the latest innovation from its Pilot Family of performance tires: the MICHELIN® Pilot® Sport Michelin_Pilot_Sport_AS_3__LogoAll-Season 3+. The MICHELIN Pilot Sport A/S3+ delivers true all-season performance and incredible wet and dry braking. This latest addition to the MICHELIN Pilot Family is an evolution of the MICHELIN Pilot Sport A/S 3, transferring the best of high-performance racing technology into a street tire made for the roads and highways of North America.

The MICHELIN Pilot Sport A/S3+ combines a unique tread design with enhanced compound technology to provide excellent snow traction and incredible wet and dry braking:

  • 28% better snow traction than the MICHELIN® Pilot® Sport A/S 3
  • More dry grip than a leading competitive max performance summer tire
  • The shortest wet and dry braking of leading competitive tires in the ultra-high performance A/S category

“All-season tires are known for being effective for three seasons, and in regions with light-PSAS3plus_Lt1Q_8ito-moderate winter weather,” said Scott Clark, chief operating officer, Michelin North America. “For those considering high performance all-season tires, the Michelin Pilot Sport A/S3+ is the best choice as it combines breakthrough levels of dry and wet grip while providing great snow traction for true all-season performance.”

As a member of the Pilot Family, the MICHELIN Pilot Sport A/S3+ benefits from Michelin’s heritage in endurance racing and arsenal of technological innovations. Specifically, the new tire features:

  • Michelin’s Helio+ CompoundTM combined with unique biting edges in the tread grooves that grab loose snow to help acceleration and braking in winter conditions, PSAS3plus_Tread_8iresulting in confident mobility in cold and snow conditions.
  • Variable Contact Patch 3.0, originally developed for Formula 1 endurance racing, which distributes the forces and temperatures more evenly over the contact patch. It is combined with an aggressive asymmetric tread pattern inspired by the MICHELIN Pilot Super Sport, simultaneously maximizing dry grip, wet grip and even wear.
  • PSAS3plus_Rt3Q_8i
  • Extreme amounts of silica in the tread compound (derived from wet endurance race tire technology used at Le Mans) combined with variable thickness sipes and large circumferential grooves, resulting in incredible wet grip and resistance to hydroplaning in deep water.

The MICHELIN® Pilot® Family of tires — which also currently includes the MICHELIN® Pilot® Super Sport, MICHELIN® Pilot® Sport Cup 2 and MICHELIN® Pilot® Alpin® PA4 — is the direct outcome of more than 120 years of tire innovation and validation.

“With the MICHELIN Pilot Family of ultra-high performance tires, we continuously merge the lessons derived from our global motorsports victories with our uncompromising standards for quality and safety,” added Clark. “Installing a set of tires from the MICHELIN Pilot Family is a simple way for driving enthusiasts to improve their vehicle’s performance.”

The MICHELIN® Pilot® Sport A/S3+ tire is designed, engineered and manufactured in North America. It will launch in March and eventually be available in 90 sizes, ranging from 175/65/R15 to 285/35/ZR20 with fitments for vehicles such as the Corvette, BMW M3, Audi A5 and Ford Mustang, among others. Michelin will offer a limited 45,000-mile warranty and the product will start with a manufacturer’s suggested retail price of $149. The MICHELIN Pilot Sport A/S3+ tire is backed by the Michelin Promise Plan, a comprehensive tire service package for MICHELIN replacement tire owners.

Consumers are encouraged to visit the Michelin Tire Selector on http://www.michelinman.com to find a complete listing of MICHELIN Pilot Sport A/S3+ tire benefits and to research the best tire for their individual needs.