Wednesday, April 25, 2012 | Edited by Daniel Moores
||Auto Sales Tracking at 14.68 Million Units, Reports CNW
Based on the first 19 days of April, the auto industry is on track to sell 1.25 million units, a 7.8 percent increase vs. a year ago, according to CNW Research. That would put the True Delivery Rate at 14.68 million units for the year.
The market research firm also noted a 13 percent increase in floor traffic from a year ago, which it attributed to consumers wanting to see new arrivals inside showrooms. That's why closing ratios slowed somewhat, CNW said, but remained 5.5 percent ahead of last year.
"Same store" sales were also up by more than 7 percent, excluding stores closed for major remodels and stores in the process of moving or going out of business. But CNW's Art Spinella noted that economic concerns among potential buyers continue to persist.
"The persistent problem of climbing concerns related to home-centric economics hasn't diminished and, in fact, rose another 2.1 percent in the first half of April," Spinella wrote in his monthly newsletter. "That has been somewhat offset by continued higher acceptance of subprime loan approvals, which are helping drive the market."
The share of consumers with subprime credit visiting dealerships grew by 19 percent from last year's 7.5 percent read, indicating that shoppers with poor credit are feeling more confident about their ability to acquire a new car or truck.
As for used, the days' supply issue continues to plague the segment, declining by another 1.3 percent vs. a year ago. "While a smaller gain than in the past few months, it is still an important metric and clearly responsible for the increased sales prices registered in the first 19 days of the month," Spinella wrote.
Consumers who are buying new cars are increasingly willing to pay a bit more even though discounts dipped nearly 3 percent vs. March. The average MSRP of cars purchased rose 8 percent vs. year ago, and, compared to March, MSRPs are up 1.5 percent.
Core Transaction prices were also up by 5.6 percent to $31,216 vs. April 2011 and up 2.3 percent compared to March. But those increases have come at a price, Spinella noted.
Manufacturer incentives, including special loyalty programs, dealer/salesperson enticements and regional spiffs, rose by more than 35 percent compared to last year. Spinella, however, noted that the comparison is unfair given that last April's incentive level dropped 33 percent vs. the previous April.
"Consumers want a new vehicle, but they'll be pushed into it just so far," wrote Spinella. "They're willing to spend a bit more, but not as much as the MSRP price increases. That, in turn, means returning to incentives at both the manufacturer and dealer levels.
"For manufacturers, being able to hold their grosses and not bumping up incentives too drastically slipped through 2011 and the opening days of 2012," Spinella added. "But competition and a smaller-than-expected pool of new-car buyers forced their hand. While smarter about which types of incentives to use and where to provide them, the overall cost is still up, and will probably be higher for the rest of this year."
(Source: F&I Magazine, 04/24/12)
||Edmunds' 2012 List: Vehicles Best at Holding Value
Car research site Edmunds.com recently announced the 2012 winners of its Best Retained Value awards, which recognize the brands and new car models that have the highest projected residual value after five years, expressed as a percentage of their True Market Value when sold new.
American Honda, struggling in the new car marketplace and in need of some good news these days, was the big winner for resale values:
"Honda has long had a reputation for dependable used vehicles," Joe Spina, director of remarketing at Edmunds, said in a statement. The wins by the Honda and Acura brands "continue to expand the company's status as one of the best values."
- The top mainstream brand was Honda, with an average retained value of 47.9% after five years.
- The top premium brand was Acura, with an average retained value of 44.6% after five years.
- Among the model-level wins in 23 market segments, Honda took four, beaten only by Ford, with five top models for holding their resale value.
Some segment surprises: Ford's Mustang scored three wins, one as a coupe and its Shelby GT 500 model both as a coupe and convertible. And the top hybrid was not a Prius, but was Honda's Civic.
The fine print: 2012 models launched by the end of last year and with sales in February of at least 20% of average sales in their market segment (based on body style and average segment price) were eligible. All nameplates with sales of 100,000 or more in 2011 were eligible for the brand awards.
Winning individual 2012 models by market segment:
Category, brand/model, retained value
• Compact truck: Toyota Tacoma, 57.3%
• Convertible $35K-$45K: Lexus IS 250 C, 46.8%
• Convertible over $45K: Ford Shelby GT500, 46.5%
• Convertible under $35K: Mini Cooper, 48.9%
• Coupe $25K-$35K: Ford Mustang 46.8%
• Coupe $35K-$45K: BMW3 Series44.0%
• Coupe over $45K: FordShelby GT50047.5%
• Coupe under $25K: Mini Cooper, 50%
• Hybrid: Honda Civic, 46.1%
• Large HD truck: Ford F-350 Super Duty, 48.6%
• Large light truck: Ford F-150, 48.4%
• Sedan $20K-$30K: Subaru Impreza, 45.3%
• Sedan $30K-$40K: Lexus IS 250, 46.3%
• Sedan over $40K: Cadillac CTS, 42.0%
• Sedan under $20K: Honda Civic, 50.0%
• SUV $25K-$35K: Honda CR-V, 54.6%
• SUV $35K-$45K: GMC Acadia, 46%
• SUV over $45K: Acura MDX, 44.2%
• SUV under $25K: Subaru Forester, 44.6%
• Vans: Honda Odyssey, 43.5%
• Wagon $25K-$35K: Mini Cooper Countryman, 48.5%
• Wagon over $35K: BMW 3 Series, 42.7%
• Wagon under $25K: Scion xB, 47.3%
• Compact truck: Toyota Tacoma, 57.3%
• Convertible $35K-$45K: Lexus IS 250 C, 46.8%
(Source: USA Today, 04/19/12)
||Market Improves for EVs, Hybrids
The market for hybrids, plug-in hybrids and electric vehicles is perking up, just when many were ready to write it off.
In the first three months of 2012, U.S. sales of hybrids, plug-in hybrids and EVs shot up 44 percent from the year-ago quarter, to 113,457. March sales of those vehicles were double those of January.
It was a breakout quarter for sales of vehicles with alternative powertrains, which had been rising at a much slower pace than expected despite waves of fresh entries.
The strong performance is a measure of validation for automakers that have persevered despite tepid demand for hybrids and criticism in political circles.
Hybrids accounted for the bulk of alternative powertrain sales -- 106,207, compared with 7,250 EVs and plug-in hybrids.
Sharper sales of the longtime hybrid king, the Toyota Prius, drove much of the growth as buyers snapped up recently launched models, including a wagon and subcompact. Also providing a lift: launches of General Motors' mild hybrid technology, dubbed eAssist, on volume models such as the redesigned Chevrolet Malibu, released in February.
Plug-in hybrids and pure EVs still represent a tiny -- albeit growing -- slice of the market for electrified vehicles. Sales of the Chevrolet Volt plug-in hybrid easily hit their highest mark yet in March. The Nissan Leaf electric car sales nearly quadrupled from the first quarter 2011, to 1,733 units.
In the press -- and in political circles eager to find fault with public and business strategies promoting alternative powertrains -- hybrids, plug-in hybrids and EVs have taken a beating.
As recently as January, Bloomberg reported that "slow hybrid sales have brought a dose of reality" to the industry. Also that month, Automotive News noted the "tepid" response by consumers to the industry's growing menu of hybrids and EVs.
Surging fuel prices have helped change that. Through last week, U.S. gasoline prices are up 19 percent since the start of the year, to a nationwide average of $3.87 a gallon.
But that doesn't explain fully the jump in hybrid, plug-in hybrid and EV sales. During the last two gasoline price spikes, in the summer of 2008 and the spring of 2011, the market share for hybrids, plug-in hybrids and EVs didn't crack 2.2 percent.
Analysts and dealers point to two other factors that are helping to drive sales higher this time: Pent-up demand and new models that are drawing people who never before had found what they wanted in an hybrid -- a wagon, for example, or one with a price they could afford.
Last year production of the Prius was slashed because of the March 2011 earthquake.
"This year that supply problem has largely been solved, and you're seeing increased demand on top of it," says Alan Baum, an industry consultant in suburban Detroit who tracks hybrid technology. "We're going to see hybrid sales only get stronger in coming months."
With gasoline prices spiking last month, Leonard Northcutt, an Oklahoma dealer who sells Toyota, Chevrolet and Buick vehicles, sold all seven Priuses on his lot over a 10-day stretch. Normally that would have taken at least 45 days, he says.
Northcutt says some of those buyers considered a Prius last year but were deterred by high prices stemming from the tight supplies.
"I think some people are saying 'Uh-oh, I've seen this before,'" Northcutt says. "They already worry that gas prices are headed above $4 so they want to do something before it gets to that point."
Toyota's new Prius models also are attracting buyers, says Zion Rowan, direct sales manager at Toyota Sunnyvale in California. Toyota launched the Prius V wagon last fall. Last month the Prius C subcompact and Prius plug-in hybrid debuted.
"A lot of Prius V buyers have told us that they've been waiting for more cargo space and room in the back seat," Rowan says.
The lower price of the Prius C -- about $4,000 below that of the regular Prius liftback -- finally has put hybrid technology within reach for many buyers, says Ben Mitchell, Toyota's corporate manager of product planning. He says the base model Prius C, which stickers for $19,710, including freight, and gets 53 mpg in city driving, is selling fastest.
"For the vast majority of Prius C buyers, this is their first hybrid," Mitchell says.
Toyota sold 27,800 Priuses in March, up 49 percent from 18,605 a year earlier. The new models made the difference: Toyota sold 4,937 Prius Vs, 4,875 Prius Cs and 891 Prius plug-in hybrids.
Other hybrids have hit the market, too. In the first quarter Hyundai sold 4,968 units of the Sonata Hybrid, which was launched in May 2011. GM sold 1,767 Chevrolet Malibu Ecos and 3,146 Buick LaCrosses with eAssist. Neither was in its lineup a year earlier.
An auto with eAssist is called a mild hybrid because the small electric motor can't propel the vehicle on its own. It simply assists the gasoline engine in certain driving conditions.
In all, there are 41 hybrids, plug-in hybrids and EVs sold in the United States today, up from 19 in 2008, IHS Automotive senior consultant Paul Lacy says.
At the Al Serra Auto Plaza near Flint, Mich., Chevrolet sales manager Jim Purves is "way more confident" in the sales potential of the Volt than he was just a few months ago.
Says Purves: "People are getting more familiar with how the car works. That's expanding the customer base."
(Source: Automotive News, 04/23/12)
Daily Sales Tip: You Are Always on Stage
What habits do you have that could potentially create a negative perception of you with your customers and prospects?
It could be your style of dress, a dirty or bent business card, disorganized samples, typos and grammar mistakes in written communication, your table manners at business dinners, a cluttered car, talking too much, or any of a myriad list of behaviors that your prospects and customers observe. Think hard, and be honest with yourself. Then begin the process of changing these behaviors.
You see, in sales you are always on stage. Everyone from the guys in the guard shacks, to the receptionists, to the decisionmakers are watching you and based on their perceptions, deciding if they like you or not.
If you want to close more business and earn more commissions, it is imperative that you work tirelessly to influence these perceptions. Being likeable won't necessarily guarantee you get the deal done, but being unlikeable will almost certainly guarantee that you won't get the sale.
Source: Sales trainer/consultant Jeb Blount