Category Archive:

Tesla Tops Consideration and Vehicle Satisfaction Results

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Each year there are several surveys of Vehicle Satisfaction in the United States marketplace.  Two of the most respected are from Consumer Reports, the widely read consumer buyer guide and automotive-specialist research company AutoPacific.  Consumer Reports results were released on December 22, 2016.  AutoPacific’s Vehicle Satisfaction results were released on June 1, 2016.

The results are similar in some ways.  The differences between AutoPacific’s “Future Consideration” results and Consumer Reports “Would Buy Again” results can be dramatic.  AutoPacific’s “Future Consideration” measures owner loyalty.  That is what percentage of the brand’s present owners would consider the brand again?  AutoPacific also assumes vehicle buyers may be considering more than one brand in the future.  This makes the percentage of consumers considering any one brand usually higher than the more definite “will buy” results from Consumer Reports.

brand-consideration-comparison-vvTesla is tops in all three measurements from Consumer Reports and AutoPacific.  Then the comparisons diverge dramatically.  In AutoPacific’s consideration results, popular domestic brands Ford (4) and Chevrolet (6) are in the top ten.  In CR’s “will buy again” results Chevrolet is 9th and Ford is 15th separated by one percentage point.   Second ranked in CR’s results, Porsche is 8th in AutoPacific’s consideration.  Cadillac is second in AutoPacific’s consideration results but 22nd in CR’s rankings.

An interesting result in AutoPacific’s two measurements is that Ford and Chevrolet are very strongly considered while scoring below the industry average in their vehicle satisfaction scores.  This is testament to the strength of their brand image.

So how can consumers use these divergent messages?  Compare the brands at the top and the bottom of the list and see where there are similarities.  In both Consumer Reports and AutoPacific results, Fiat is at the bottom.  Ram, Fiat Chrysler’s truck-only brand has OK results from CR, but is on the bottom of the AutoPacific future consideration results.  Hot-selling Jeep is towards the bottom in all the measurements.  Should the buyer consider buying a Jeep a risk if owners are hesitant to buy another one?  Would a new Jeep get lower satisfaction scores?  Infiniti gets a pretty good satisfaction score from AutoPacific, but both CR “will buy” and AutoPacific consideration scores are very low.  Something is going on there.

For each brand there is a story.  Data compiled by organizations like Consumer Reports and AutoPacific can go a long way in helping consumers fine tune their consideration set when they are in the market for a new car or light truck.


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Auto Industry is Ahead of Fuel Economy Technology

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The Midterm Evaluation of Corporate Average Fuel Economy (CAFE) Standards report issued in July 2016 by the Environmental Protection Agency(EPA), National Highway Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB) set the stage for comments on 2022-2025 CAFE standards.  The comment period ends on September 30, 2016 and some congressional leaders have asked for a further 60 day extension to receive comment.  Reading the details of the report is very enlightening and has largely been overlooked by the media.

Fuel Economy to Double from 2012 to 2025  In the rules established in 2012, fuel economy is to double by 2025 and green house gas emissions are to be cut in half.  This would save 12 billion barrels of oil over the lifetime of 2012-2025 model year cars and light trucks and save consumers billions of dollars in fuel costs.

Report Under-Estimates Truck Percentage of Light Vehicle Market  At the time the initial rules were set, the truck mix was assumed to be 33% of the light vehicle fleet.  Given today’s low gas prices and the popularity of crossover SUVs, the light truck mix is over 60% of the market today and is projected to grow to over two thirds of the market by 2020.  In the Midterm Evaluation the government agencies show the highest truck mix to be 52% with low fuel prices continuing.  If fuel prices return to peak levels seen during the last decade (not projected), the light truck mix is assumed to be 38%.  Given the reality of the market, both of these estimates are conservative and very low.

Automakers Ahead of Schedule in Meeting Future CAFE Requirements  To date, the Midterm Evaluation concludes “auto manufacturers have over-complied with the program”.  This is a surprising statement from agencies that often accuse the industry with foot dragging in fuel efficiency and safety technologies.  They note that “fuel economy technologies are entering the market at rapid rates” and that the costs of adding these technologies have not been as high as estimated back in 2012.

Consumers Have Accepted Enhanced Powertrains  The report also notes that consumer acceptance of advanced fuel efficiency technology has largely been positive.  Ford’s EcoBoost turbocharged powertrain technologies have been well accepted (and strongly advertised).  Stop/Start technology is becoming more accepted according to AutoPacific’s consumer research.  Stop/Start shuts the engine off when stopped and then restarts the engine immediately when the accelerator is applied.  Some Stop/Start systems are seamless.  Others are rough on start-up. As the systems improve acceptance will improve.

Enhanced Gasoline Powertrains Can Meet 2025 CAFE Standards  To meet 2025 CAFE requirements, the agencies identify several technologies that will play an important part.  Most are enhancements to gasoline powertrains.  Tops on the list are transmissions with 8-speeds or more (70%) .  General Motors and Ford are working together to develop multi-speed transmissions.  More engines will be turbocharged (54%).  Stop/Start will become more commonplace (38%).  The most interesting fact is the report assumes less than 2% of the vehicle fleet will be full electric vehicles and less than 1% will be a plug-in hybrid.  Mild hybrids are estimated to be 14% and full hybrids will be 14% to meet 2025 CAFE.  There is only passing mention of fuel cell vehicles.

Substantial Cost Increases to Meet Future CAFE Standards  Improving fuel economy is not free.  Back in 2012, cost increases of over $3,000 per vehicle were estimated to meet 2025 standards. The cost is now estimated by the agencies to be around $1,250 (over a 2021MY vehicle).  Nowhere in the report does it mention how much the cost to get from 2012 to 2021 is.  The report estimates that meeting the 2022 to 2025 standards will increase lifetime vehicle costs by $87 billion.  This is estimated to be offset by fuel savings of $120 billion and other benefits of $55 billion.  The net benefit is estimated to be $88 billion.  Like many government reports, the arithmetic is vague and the conclusions are shaky.

AutoPacific’s bi-monthly Fuel Price Impact Study shows that consumers are not particularly willing to spend more for a vehicle that is more environmentally friendly.  Consumers also say that their present vehicle is clean enough and the focus should be on cleaning up other sources of pollution.  The Midterm Evaluation does not mention that there has been any research conducted to determine consumers’ willingness to pay substantially more for higher fuel economy vehicles.

Plug-In Electric Vehicles Not Needed to Meet Federal CAFE  Perhaps the most interesting conclusion in the report is that plug-in electric vehicles are not needed to meet the Federal 2025 CAFE standards.  This is not welcome news to Tesla’s Elon Musk or Nissan’s Carlos Ghosn.  The primary reason electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs) will impact the overall vehicle fleet are to satisfy California’s mandate for zero emission vehicles (ZEVs) in the fleet.  California’s regulations also are shared with northeastern states.

Even Tougher Standards in the Future?  The report is very complimentary of the auto industry’s progress in adopting enhanced technologies to meet future fuel economy requirements.  While some might hope that this would lead to a reduction in future standards, it might result in even tougher fuel economy goals.


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“Trucks” to Continue to Outsell Cars – XSUV Segment

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500 wide Car Truck Sales 1987-2021500 wide Car Truck Mix 1987-2021AutoPacific, an automotive specialist research and product planning consultancy, forecasts that trucks, including XSUVs will be about 60% of the market for the foreseeable future.  In fact, reading the crystal ball for the next five years, this percentage of the mix may be low.  The charts above detail how cars and truck sales and market penetration have evolved since 1987 and the forecast for the future.

The hottest product segment in the American light vehicle market is the crossover SUV (XSUV).  A crossover SUV can be as large as a Chevrolet Traverse or as small as a Chevrolet Trax.  There are dozens of XSUVs in between.  And there will be more.

The XSUV segment has become so hot because this type of vehicle corrects the criticisms buyers had of traditional SUVs which sold very well, but were not optimal.  Buyers wanted products that were not hard-core off-roaders, but more civilized and city friendly.  The SUV market exploded in the early 1990s with the introduction of the Ford Explorer and Jeep Grand Cherokee.  It wasn’t until 1996 that the crossover SUV began slipping into the marketplace.  First the Toyota RAV4 and Honda CR-V appeared.  They were followed by the luxury crossover RX300.  Clearly the manufacturers were listening and reacting.

Here are just a few of the things we know about the evolution of the SUV market over the next five years…

Cadillac  Cadillac states that it has too few XSUVs (one, the upcoming XT5) and wants to add two or three more to its lineup while adding one more car as a range topper between now and 2020.

Buick  Buick is adding the small Envision XSUV to its lineup this Spring.  Envision is assembled in China.

FCA Drops Cars to Add XSUV and Pickup Capacity  Fiat Chrysler Automobiles is dropping its Chrysler 200 and Dodge Dart in favor of more capacity for XSUVs and pickups.  The Ram pickup will take over the FCA Sterling Heights, Michigan Plant when the Chrysler 200 is dropped.  FCA’s huge Belvidere, Ilinois plant will be populated by XSUVs when the Jeep Compass and Patriot plus the Dodge Dart fade away.

Toyota Pushing RAV4  Toyota Motor Sales has stated that they would not be surprised if the RAV4 XSUV overtook the Camry mid-size car as its best selling product.  Camry was the best selling car in the USA in 2015.

Lexus will add a 3-row XSUV above the RX350 in the next few years.500 wide SUV XSUV Sales 1987-2021500 wide SUV XSUV Mix of SUV 1987-2021

 

The charts above show the impact of crossover SUVs on the light truck market.  Huge volume increase and market share increase.

Hyundai Aggressively Adding XSUV Capacity  Hyundai is replacing 50,000 units of car capacity in its Montgomery, Alabama assembly plant with the Santa Fe Sport.  That drops capacity for the Hyundai Sonata and Elantra from 400,000 to 350,000 units per year.  Hyundai admits that they underestimated the demand for XSUVs years ago.  This capacity move reacts to market demand and dealer pressure to get Hyundai dealers more XSUVs that are easier to sell and require less incentives and discounting.

Hyundai will add 45,000 units to its Tucson compact XSUV volume this year.  Built in South Korea, Tucson has been limited because it is popular around the world and the vehicle was capacity constrained.

Hyundai also recognizes there is a hole at the bottom of their XSUV lineup and are adding a sub-compact B-Segment XSUV to fill that hole.  There is a possibility that a smaller A-Segment XSUV will replace the Hyundai Accent hatchback.


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Fun Controversy Around Cadillac Poolside Advert

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Brilliant Ad – Controversy Worth its Weight In Gold  Cadillac, once the Standard of the World, has aired an outstanding ad for the Cadillac brand and the Cadillac ELR electric coupe.  It was first shown on the American broadcast for the Sochi Winter Olympics and more recently for the Oscars that aired on Sunday, March 2.  And what a controversy has ensued.  Cadillac’s agency Rogue created the Cadillac Poolside ad to espouse unbridled American confidence and showcase what Cadillac stands for.  In the process, the spot has left leaners and right leaners sniping against each other on numerous websites.  On Thursday, March 6, arch-conservative pundit Rush Limbaugh (click on the link to be taken to the transcript of the Limbaugh show about the Cadillac ad)  devoted the top of his second hour to the controversy the ad has created.  The Cadillac Poolside ad pushed a button that allowed Limbaugh to rant for about a half hour.


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Patrick Paternie

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I probably was the last person to ride with Patrick Paternie on a new vehicle evaluation.  Patrick passed away on March 10 following a race in his classic Porsche.

Patrick Paternie: Volvo Chili Cook-Off, Scottsdale, March 8, 2010

I spent two days riding in Volvos with Patrick.  He had sought me out to be his co-driver and I looked forward to his commentary and stories.  I knew he was a good driver and would never take risks that so many of the hot-shots on these press previews sometimes take.

Patrick regaled me with stories of how he and his wife Linda towed a big trailer behind a Suburban in Arizona and there just wasn’t enough oomph in the big SUV to keep up with traffic with the trailer following behind.  He talked about how Linda had come to like riding  in his Ford pickup because of all the room in the cab.  He was especially complimentary about a drive with the Aston Martin Rapide in Alaska.  He said the Rapide was much more capable than he would ever have thought.  The folks at Aston Martin admit the car has been “placed at a considerable discount”.  He travelled widely for his passion.  I was jealous.

We talked about heart surgery I had undergone last November.  “How did you know you had a problem,” he asked.  “Sprained ankle,” I replied.  That got me to the doctor’s office and to get a physical my medical insurance provides every year.  Surgery followed a few weeks later.

Patrick never alluded to having a heart problem.  He looked fit and healthy.  He raced.  He finished.  He was 65.  We miss him.


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Chevrolet Traverse – 2013 What Were They Thinking?

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We have always liked the General Motors Lambda Platform crossover SUVs (XSUVs).  The Buick Enclave is the most elegant and chrome laden.  The GMC Acadia picks up sheetmetal from the now-dead Saturn Outlook for 2013.  That’s OK.  The Outlook wasn’t bad looking and GM likely saved bundles by using /modifying tooling for the “fresh” Acadia.  The Chevrolet Traverse was the last Lambda launched and was arguably the better looking of the three “mainstream” Lambdas – Traverse-Acadia-Outlook.  It carried the bold crossbar in its grille that has come to clearly identify a Chevrolet when seen in the rearview mirror.

Chevrolet Traverse Front End Goes Plain Jane

Now they’ve gone and ruined it.  For the 2013 mild freshening, Chevrolet has abandoned its bold and distinctive front end appearance for a milquetoast “car” front end look for its crossover.  This fits into the VehicleVoice category of “WHAT WERE THEY THINKING?”


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Jealous George – No Detroit Auto Show This Year

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North American International Auto Show Logo

An annual pilgrimage for the auto industry is to attend the press days at the North American International Auto Show in Detroit each January.  Unfortunately, this year I cannot attend because my physicians caution that I should not be heaving carry-ons into and out of overhead bins and baggage carousels.

So, I’m jealous.

One of the primary businesses of AutoPacific is to keep on top of what is the latest in the auto industry worldwide, so AutoPacific will still be well represented at Detroit.

I asked each of our staff members to remind me why I should or should not be jealous of them attending instead of me.  Read below the break for their input.


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2012 Lexus CT200h – Range Expansion Attracts GenX and GenY to Lexus

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Lexus CT200h 2011 FV.jpg
Think Audi A3, BMW 1-Series and Volvo C30 and you can better understand the competitive set Lexus is targeting with its all new CT200h 5-door hatchback to be launched in February 2011. Also think of the CT200h as a product really designed for the European market where it is right-sized and right-styled.
The competitive set in the USA sells less than 1,500 units per month now – or about 18,000 per year – small potatoes in a 12,000,000 unit industry. Lexus is going after 1,000 units per month – immediately intending capturing 40% of this small segment. Can they do it?
Given pricing in the low $30,0oo range, the CT will undercut the IS 250, but Lexus management tells us it won’t squeak in under the $30K barrier which could prove to be a psychological threshhold.


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HUMMER Gals Love Consumer Brands

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Women owning HUMMERs have a strong affinity for ten consumer brands in the USA.
AutoPacific’s Research Suite database that annually collects the opinions of over 30,000 buyers of new cars and light trucks asked which of 27 brands a new owner would buy from. The results from AutoPacific’s Consumer Brands Study clearly show the interrelationship between owners of auto brands and buyers of twenty-seven consumer brands like Walmart, Lowe’s, Apple, Sony, Hugo Boss, Costco, McDonalds and more.
What the study shows is that you likely won’t find a Porsche driven by a woman in a Walmart parking lot, but you are likely to find a Land Rover driven by a woman at an Apple Store. Using these data AutoPacific can develop clear profiles of the dynamics between these auto brands and consumer brands.
HUMMER Female Brands.jpg
Looking only at female buyers, HUMMER buyers were most likely to shop at Lowe’s, Old Navy, The Gap, Walmart and to buy Coca Cola, Levi’s, Axe, LG, HP and Hugo Boss.
Land Rover Female Brands.jpg
The only other brand that came close to HUMMER gals was Land Rover. They were tops in Polo, Methoc, Sony, Gucci, Hugo Boss and HP. They were also in the top five among Trader Joe’s, Whole Foods, Apple, Starbucks, Costco and Louis Vuitton shoppers.


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AutoPacific Sales Forecast: U.S. Light Vehicle Sales Set to Recover…Slowly

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Gradual Recovery Over the Next Five Years, But No Return to 17-Million Unit Years Anytime SoonAutoPacific_VV.jpg
TUSTIN, Calif. (December 21, 2009) — 2009 will be a memorable year for the automotive industry — unfortunately for all the wrong reasons. The U.S. light vehicle market is expected to close out 2009 at a disastrous 10.3 million sales, down from 16.1 million sales just two years prior and the lowest industry volume since AutoPacific began forecasting automotive sales in 1988. Naturally, the national economic collapse had a profound impact on retail sales of light vehicles.
The industry can look forward to year-on-year recovery over AutoPacific’s five-year forecast period, but at a relatively gradual pace. In the near term, AutoPacific forecasts industry volume of 11.4 million units in 2010 as the economy slowly heals but also as unemployment hampers faster industry sales recovery. 2015 will see industry sales of 15.4 million, a significant improvement from 2009 volumes but still a far cry from the near-17 million unit years seen through much of the past decade.


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