Category Archive:

Generation Y Open To New Brands, New Technology And Hybrids

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Survey Shows Generation Y Frequently Multitasking While Driving
AutoPacific_VV.jpgTUSTIN, Calif. (October 21, 2009) — Willing to embrace new brands, new technology and alternative powertrains, Generation Y will redefine the automotive market. A just released study on Generation Y new vehicle buyers in the United States shows Generation Y consumers are more likely than the generations before them to consider purchasing a Chinese or Indian branded vehicle, more willing to accept hybrid powertrains, and more likely to want the latest entertainment technology in their vehicle. As the largest generation since the Baby Boomers continues to gain spending power and enter the new-car market, which automakers will win their confidence? AutoPacific’s study underscores the opportunities for automakers to reach Generation Y consumers as they move through their Teen, Young Adult and Young Family life-stages.
“Growing up with continuously evolving technology and electronics has given Generation Y a unique ability to adapt easily to change, a willingness to accept new brands, and an expectation that their vehicle provide the best of what is available,” said George Peterson, president of AutoPacific, the research firm that conducted the study. Though many Generation Y consumers would choose a trip around the world over a luxury vehicle, Generation Y does expect that the vehicle they buy will be more than just basic transportation. “Generation Y is more likely than older generations to own portable electronics, more likely to research their vehicle options on the Internet, and an astonishing 29%points more likely to frequently multi-task while driving. They know what’s out there, they know the economical and environmental problems we face, and their vehicle expectations reflect that knowledge.”


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Small Cars, Big Market?

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AutoPacific_VV.jpgSurvey Shows What Buyers Want – And Their Hesitation to Think Small
TUSTIN, Calif. (Sept. 9, 2009) – A just released study on the future of small cars in the United States shows American consumers are increasingly interested in smaller cars, but with reservations about size and features. The study underscores the challenge automakers face in trying to meet government mandated improvements in fuel economy while still delivering what consumers want and will buy. Many carmakers have recently introduced new, smaller cars to the market and are launching more in the future.
“Our research indicates that American car buyers are definitely willing to buy a more fuel-efficient car, but that they don’t want it to be much smaller than what they are driving today,” said George Peterson, president of AutoPacific, the research firm that conducted the study. “Tomorrow’s successful small car won’t be tiny. It will be reasonably sized, have increased fuel economy, adequate performance and a full load of customer features.”


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Impact of Cash for Clunkers Program

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The Cash for Clunkers Program Ended at 8PM EDT on Monday August 24.  According to government statistics, 680,114 Cash for Clunkers deals were made using $2.88 billion of the $3 billion authorized for the program..  The average clunker received a $4,235 rebate.  Reimbursements are coming very slowly to dealerships and the government is putting more processors on staff to handle the backlog.  Overall, a rare successful stimulus program.

On July 24, 2009 new car dealers in the United States began accepting trade-ins of older vehicles not worth much for new cars. Based on their fuel economy and the fuel economy of the new vehicle purchased, customers received a voucher for $3,500 or $4,500 to apply to the purchase of a new car or light truck.

Ultimately, the results of this program may be the sale of slightly over 700,000 new cars and light trucks with about 250,000 incremental to what would otherwise have been sold. But the impact goes deeper. There will have been substantial sales tax revenue from each sale going to states and cities that sorely need the income. Additional income taxes will be generated from the additional commissions and salaries dealership personnel otherwise would not have earned. The list goes on.

A brief synopsis of the impact of the Car Allowance Rebate System (CARS) is shown below the fold…

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GM's Chips Begin to Fall – HUMMER and Saturn Sold

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General Motors’ June 1 bankruptcy declaration was quickly followed by the announced sale of HUMMER to China’s Sichuan Tengzhong Heavy Industrial Machinery Company (June 2) and Saturn to Roger Penske’s Penske Automotive Group (June 5). Having the futures of both of these brands out from under the General Motors umbrella can give many American dealerships and their communities cause for celebration.
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AutoPacific Rising Star Winner – Hyundai

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Hyundai is the winner of the first Rising Star Award from AutoPacific. The Rising Star Award is given to the brand climbing the most positions in AutoPacific’s Vehcile Satisfaction Award research. Hyundai climbed eleven positions year-to-year. This is testament to Hyundai Motor America and Hyundai dealers selling vehicles that satisfy their customers and good customer handling at the dealerships.
Hyundai had two category winning vehicles – the Hyundai Genesis won the Aspirational Luxury Car Category and the Sonata won the Premium Mid-Size Car Category.
Other Rising Stars were Infiniti climbing ten positions and Mercury climbing nine.


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Consumers Still Reluctant To Buy New Cars

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TUSTIN, Calif. (April 20, 2009) — A just completed national internet survey shows a marked increase in consumers’ unwillingness to consider purchasing a new car. Beginning in September 2008 AutoPacific, a Tustin, Calif.-based automotive market research firm, looked to its internet consumer panel to gauge the likelihood of consumers to purchase or lease a new (not used) vehicle in the next 24 months. The most recent survey shows those who definitely/probably will not buy has increased from 22% in September, 2008, to 38% in March, 2009 to 42% in April. This trend is reinforced by the survey’s definitely/probably will buy numbers which have decreased from 53% last September, to 37% last month to 35% in April 2009. Over 1,100 persons responded per survey.
“In early 2008 the US auto industry was hobbled by high gasoline prices, while consumer confidence was beginning its own collapse. Then, just as gas prices declined, the financial crisis hit, and vehicle sales fell even lower,” says George Peterson, president of AutoPacific. “A key component of AutoPacific’s sales forecasting practice includes monitoring consumer intentions on a regular basis. One might think that the government’s stimulus expenditures, warranty guarantees for GM and Chrysler vehicles, or the rising stock market would have turned consumer sentiment around. But this survey shows that hasn’t happened, at least not yet.”

Posted in: Auto XPRT Speaks...

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From Model Ts To Microprocessors — How Cars Have Changed

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Today’s Consumers Expect More Features in Their Vehicles as Technology Grows
TUSTIN, Calif. (April 15, 2009) — You have some free time. You decide to plug in the laptop and surf the Internet using your wireless connection. After a few minutes you grab a cold soda out of the refrigerator, recline your seat and decide to watch some satellite television. And you’ve done all of this in a parking lot waiting for your child’s soccer practice to end.
Today many comforts of home as well as their technologies are available in your car, so you never have to be far from the entertainment, information and luxuries you enjoy. This is quite a departure from the days of the Model T Ford when cars weren’t even equipped with fuel gauges or electric starters. Some of today’s cars can be started with the push of a button from yards away.
“Features that were once the stuff of science fiction are now common on even entry-level cars,” said George Peterson, President and CEO of AutoPacific, a Tustin, Calif. automotive research firm which has been conducting consumer insight research since 1986. “The newest, most advanced features usually appear first on luxury vehicles and then migrate throughout as the technology becomes less expensive. Our research has revealed there is strong and growing demand for all types of new technology in vehicles, with safety features having the most demand.. For example, many drivers are interested in vehicles that will stop themselves in emergency situations, warn you when other cars are too close, or even parallel park themselves.”


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Survey Shows Public Very Aware Of Auto Industry Troubles And Not Inclined To Buy

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AutoPacific Research Indicates Balance of Year May Continue to be Difficult for Car Companies
TUSTIN, Calif. (April 3, 2009) — A national Internet survey conducted between March 31 and April 1 reveals that the American public is extremely aware of the current challenges facing the American automobile industry and the Obama administration’s actions to confront them. Only three percent in the survey said they were not aware of the billions of dollars in government loan guarantees made to General Motors and Chrysler, 94 percent knew that both companies had been required to submit viability plans in hopes of receiving additional government aid, and 89 percent were aware that the White House had declared neither plan represented “a credible path to viability.” The survey findings were the result of over 700 responses.


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White House Ousts GM's Wagoner – Questions Viability

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President Barack Obama delivered an address to the nation this morning at 11AM where he summarized the results of review of General Motors and Chrysler by The Presidential Task Force on the Auto Industry. The conclusion of the report was that neither of the plans presented to the Task Force by GM and Chrysler are viable.
Wagoner Gone – Replaced by Henderson: Immediately, General Motors’ Chairman Rick Wagoner was let go to be replaced by Fritz Henderson – a very capable and experienced senior executive. Clearly, the Task Force determined that the GM plan did not go far enough. GM now has another sixty days to rework the plan and come back with a viable approach. If they do not, the government can move the Corp into bankruptcy to get its house in order.
Our question is “What will GM’s brand and vehicle line profile look like on June 1?”
Chrysler and Fiat Agree to the Framework of a Tie-Up: Minutes after Obama’s speech, Chrysler announced the it had reached developed a framework for a tie-up with Fiat with the blessing of the Treasury Department. Fiat receives a third share of Chrysler for technology sharing allowing Chrysler to launch competitive new products based on Fiat powertrains and platforms. This is needed to keep Chrysler competitive. Chrysler CEO Bob Nardelli keeps his job because he has been at the helm for a relatively short time (since August 2007) compared with Wagoner’s eight years at the helm.
Government to Guarantee Warranties (Warrantees): Obama stated that beginning today the warranties offered by GM and Chrysler are stronger than they have ever been because they would be guaranteed by the government. Also, adopting a spelling not seen for decades, the government refers to these plans as “warrantees”. This support by the government is to create confidence in purchasing a new General Motors or Chrysler vehicle today.
Other Actions – Tax Credits, Scrappage Plans, Etc: Obama also mentioned the sales tax credit for purchasing a new vehicle that has been approved by Congress. Pending are plans for incentives to scrap older, gross polluters.
Further Question: Ford: Ford Motor Company has not taken part in government loan guarantees having planned financially for tough years back in 2006. While Ford is struggling like GM and Chrysler it does not seem to be hurt as much in the market as they are. Market share is not down as much.
How will Ford be impacted by the statements of the President, The Presidential Task Force on the Auto Industry, and the restructuring forced on GM and Chrysler by the government? Will Ford thrive or continue to struggle?
Another Question: Financial Company CEOs: Rick Wagoner fell on the sword for General Motors performance during his tenure but you can argue that the performance of the financial community has been much worse and much more damaging to the economy. Where can we see the heads of the banks, investment banks, and insurance company CEOs rolling down Main Street?


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Californians Can Have Any Color Car They Want – Until Later

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The Color Nazis at the California Air Resources Board has backed off of a proposed regulation that would have required dark colored vehicles to have reflective paint to keep vehicle interiors cool thereby reducing the load on the air conditioning system. What this may have done would be the elimination of black, dark blue, dark green, dark grey paint colors. All are popular in the State.
The fact of the matter is that interior heat load is determined more by the tint of the glass than of the color of the vehicle. Maybe CARB does now recognize this because they have changed their position. See the following excerpt from their March 27, 2009 Press Release and quotes from the CARB website
From the website: “In 2006, California adopted the California Global Warming Solutions Act, also known as AB 32. This law created a comprehensive, long term plan for California to reduce greenhouse gas emissions to 1990 levels by 2020. Cool Paints was identified as an Early Action strategy, to be in place no later than January 1, 2010. This strategy is based on measures to reduce the solar heat gain in a vehicle parked in the sun. A cooler interior would make drivers less likely to activate the air conditioner, which increases carbon dioxide emissions.
Potential approaches include reformulation of paint to reflect near-infrared sunlight, parked car ventilation, and solar reflective window glazing. It is expected that cool paints, together with reflective glazing, will reduce the soak temperature of the typical vehicle parked in the sun by 5 to10 degrees celsius.
From the CARB March 27, 2009 Press Release: “Of note, the proposal now specifies solar control requirements only for new vehicles windows (glazing). The original proposed
regulation contained requirements for both vehicle paint and windows to improve their ability to reflect heat from the sun. The intent of the paint requirements was to introduce reflective paint (currently used in architectural paints to keep houses and businesses cool) into the automotive arena. The requirement was never at any point to limit consumer color choices or ban any colors. Based on input from the automotive industry, paint, pigment suppliers, and comments from a public workshop held on March 12th, ARB staff has determined that a clear path to achieve solar reflectivity for the darker colors has not yet been identified. We are planning to address the paint-related portion
of the proposal in a future regulatory action. ”
So, for now, it appears that darker colors are safe.


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