Wednesday, July 20, 2011 | Edited by Daniel Moores
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Americans Love Their SUVs...From Detroit Car sales this year are proving the theory that America's love affair with the sport-utility vehicle is far from finished, despite gas prices. And last month, they wanted their SUVs from an American automaker. The SUV may go by different labels these days -- such as CUV, crossover or tall wagon -- and the SUVs feeling the love generally are smaller than in the old school utes. But that doesn't take the luster off GM, Ford, and Chrysler, together posting a 28% year-over-year gain in utility vehicle sales in June, while overall U.S. auto sales were up just 7%. That compares with a 1% fall for Japanese SUVs, but that reflects the impact of the Japanese disaster. We also looked at SUVs from South Korea's Kia and Hyundai: Their SUVs were up 18%. No SUV sold in greater numbers last month than the Ford Escape. The smallest Ford utility's sales jumped 43%. Overall, Ford utility-vehicle sales were up 27% last month -- about as strong as the 29% gain for its cars. Edge and Explorer gains offset losses for the larger Expedition and Flex, and together, these five utilities generated more than a quarter of all Blue Oval sales last month. SUV patriotism abounds at the Fiat-run Chrysler Group, too. There's arguably no utility more American than the Jeep Wrangler, and its sales improved 27% to 11,290 in June. It was America's fourth best-selling SUV, ahead of mainstream players such as the Explorer, Kia Sorento and Honda Pilot. In fact, sales of every Jeep product -- an entire lineup of SUVs -- plus Dodge's Journey and Nitro, are up this year vs. last year. And the less-than-a-year-old redone Jeep Grand Cherokee and Dodge Durango also had strong sales. At GM, sales were down last month for big crossovers such as Buick's Enclave and Chevrolet's Traverse and big truck-based SUVs, such as Chevrolet's Suburban and Tahoe, Cadillac's Escalade and GMC's Yukon XL. But GM's small utilities were standouts: Chevy Equinox sales jumped 56%; sibling GMC Terrain, rose 52% -- all the more impressive, considering they were selling as fast as GM could build them last year. In fact, new and small are the words of the day. Older, huskier models are on the decline for all automakers: Expedition, Suburban, Tahoe, Yukon, Yukon XL, Toyota Sequoia and Nissan Armada together were down last month to 18,751, vs. 54,766 when large SUVs ruled in June 2004. That 66% belly flop compares with overall new auto sales down 27% in the same period. The American SUV doesn't seem to be the auto world's skinny jeans, fashionable but bound to fall out of favor eventually. It has persisted, and in new forms, is thriving. ---------------------------------------- Share of Utility Vehicle Sales in June 2011 General Motors -- 20.0% Ford Motor Co. -- 16.6% Chrysler/Dodge/Jeep -- 15.9% Honda/Acura -- 9.4% Hyundai/Kia -- 9.1% Toyota/Lexus -- 8.8% Nissan/Infiniti -- 6.6% Others -- 13.5% ---------------------------------------- (Source: USA Today, 07/17/11) |
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Small Car Prices Should Drop as Availability Increases Thinking of trading in the clunker in your garage for something that gets better gas mileage? Wait a little longer. Small car prices, which have set record highs this year, are expected to come down this fall. Lower gas prices will make people comfortable driving something bigger. Honda and Toyota, which were hurt by the Japan earthquake, will crank up production of small cars. And Japan and Detroit will offer big discounts on smaller models as their lots fill up. The average new compact car, which cost a record $20,500 in June, should fall to about $19,300 by the end of the year. The average used compact car should fall from a record $11,300 to about $9,600 over the same time, according figures compiled by the Kelley Blue Book auto pricing service. Small-car prices should start falling in September and accelerate through the end of the year. "Values for these vehicles just rose too quickly and got to a level that was really unsustainable," says Alec Gutierrez, manager of vehicle valuation for the Kelley Blue Book car pricing service. Here are factors pushing down small-car prices: • Small-car surplus: Carmakers such as Honda and Toyota are boosting production following Japan's March 11 earthquake and tsunami. The disaster essentially shut down that nation's auto industry and slowed Japanese-brand factories in North America. With factories returning to normal, American dealers will have more Civics, Corollas and Priuses. And they won't have to put small-car buyers on waiting lists, like they did this spring. In fact, some will have more small cars than they need says George Davis, general manager of a Honda dealership in Ann Arbor, Mich. "One minute they're going to look out the window and see 50 cars. Two weeks later they'll see 300. Panic sets in," he says. "They pay interest on these cars and they'll have to discount." • Deals: Honda and Toyota dealers will increase rebates, low-interest financing and other promotions, Gutierrez predicts. "GM and Ford will be right behind them, and Hyundai as well," he says. Automakers say they won't cut prices even if Toyota and Honda come out with bigger incentives. Instead, they want to sell cars on quality, styling and features. Dealers and analysts are skeptical, though, saying that once Honda and Toyota restock, prices will fall as rivals try to win customers who have to replace their clunkers. The average age of a car in the U.S. is now 10.6 years, up more than a full year from 2008, according to the Polk research firm. • Lower gas prices: Gas prices are down 31 cents from their peak of $3.98 a gallon in May, and although small-car demand is still strong, buyers have started to shift to larger vehicles. Compact and subcompact sales fell to just under 195,000 last month, down from 238,000 in March, according to Autodata Corp. There's now a shortage of cars at Pacific Honda near San Diego. But there will be a surplus after July and buyers will see deals, says Wayne Meyer, president of the chain that owns the dealership. Pacific Honda has about 38 vehicles in stock instead of the usual 350. "There's going to be so much car availability," Meyer says. Automakers "are going to be defending market share they gained or regaining market share they lost." (Source: Detroit Free Press, 07/18/11) |
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Dealers Sell to Surprised Smart Phone Shoppers Jerry Draga quickly realized the sales power of smart phones. Draga, general manager of Jack Matia Honda in Elyria, Ohio, said he sold vehicles to the first six people who used a new service on the dealership's Web site. The service lets shoppers download detailed vehicle information to their mobile phones by clicking an icon. The downloads generate text messages to the dealership that include the precious mobile phone numbers of the shoppers. Salespeople followed up quickly with phone calls to get the shoppers in for test drives. "We converted the first six," said Draga, who had his dealer management software provider install the service eight months ago. Dealers are finding new ways to interact with shoppers who use mobile phones. The methods combine basic texting with advanced enhancements that speed communication between salespeople and shoppers. The goal of new technology, though, is often decidedly old-fashioned: bring shoppers into showrooms. Capturing cell numbers Some dealers are putting response numbers in print, TV and radio advertising when offering special promotions. When a shopper uses a smart phone to respond, the shopper's cell number allows salespeople to follow up on the lead, said Nicole Case, director of Web solutions at Reynolds & Reynolds. That technique is being used on dealership lots. Some dealers have begun putting text codes on window stickers of cars on their lots so customers kicking tires on Sundays or off-hours can immediately contact the store for more information. Meanwhile, basic texting is booming. In 2010, Americans sent 2.1 trillion text messages vs. 81 billion five years earlier, according to CTIA, an association of the wireless telecommunications industry. It will remain popular for years, Case predicts, because while most American families own a cell phone, only about a third of those cell phones are smart phones with Internet access or e-mail capabilities. Mall of Georgia Chrysler-Dodge-Jeep of Buford, Ga., sends about a text a week to its 3,800 customers to offer service specials or invite them to the store, said Bryan Jackson, service department manager. He said an $80 discount on a set of pickup tires yielded the sale of 24 sets in a month compared with a usual sales pace of three sets. Shoppers to showrooms During a text promotion in June, customers donated 130 cell phones for U.S. servicemen and servicewomen for a 10 percent discount on vehicle service, Jackson said. The campaigns by vendor OneCommand resulted in community good will and service business beyond tire sales, he said. OneCommand sells software to help dealers market cars and services with e-mails, voice messages, texts and other methods. After the fast start, the mobile-phone download feature on the Jack Matia Honda Web site is still generating two additional vehicle sales per month, Draga estimates. The dealership averages about 160 total new- and used-vehicle sales a month. The mobile marketing subscription from Reynolds & Reynolds, which retails for between $100 and $500 a month, includes the creation of a mobile Web site that converts text and photos into an easy-to-read mobile format, Case said. Draga said Web shoppers occasionally are surprised when they receive a follow-up call from the store after downloading vehicle information. "They ask how we got their phone number," he said. But most times, they take it in stride and get their questions answered. Draga said: "We see if we can get them into the store." (Source: Automotive News, 07/18/11) |
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