Category Archive:

“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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Luca trumps Max: New Era in Formula One Announced

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Thumbnail image for fia-chef_max-mosley_ferrari-boss_luca-di-montezemolo.jpgIf you read our F1 post from several days ago, the world known as Formula One was on the brink of becoming CART Wars, PART II. A majority of the teams who race in the international F1 Championship were prepared (so they said), to launch a breakaway series, due in large part to their dissatisfaction with the requirements set forth by the governing body and its president, Max Mosely.


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Silverstone: The Beginning and End of Formula One

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silverstone-F1.jpgOn May 13, 1950, the first ever (modern era) Formula One Championship Grand Prix was won by Giuseppe Farina in an Alfa Romeo-dominated event in which the Italian manufacturer cruised to a 1-2-3 finish. Luigi Fagioli and British driver Reg Parnell filled the remaining podium positions. The circuit was a WWII bomber airfield called Silverstone. The circuit has been a part of Formula One since that time, although races have, on occasion been run at other Britich tracks. This weekend, Silverstone hosted its last Grand Prix, and in addition to the race, manufacturers and the governing body announced they are going their separate ways as well. And so, Silverstone may go down in history marking the beginning and in some respects, the end of an era in modern motorsport.


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French Concepts: Renault, Peugeot, Citroen

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Though none of these entries are planned for sale in the North American market, each brought something interesting to the show this year. Renault looks to refine a new approach to the luxury segment, as conservative as the Avantime was not, and Citroen and Peugeot explore alternative powertrains in large luxury coupe-looking sedans.
Renault Nepta
Renault is not expected to build this two-door, four-seat vehicle, though its headlights and grille could appear on future Renaults. Also of interest is the powertrain, a 3.5L twin-turbo V6 delivering 420HP through a seven-speed automatic transmission. The V6 is an evolution of Nissan’s VQ engine family and it is likely that a seven-speed automatic will find its way into Nissan and Renault model lines sooner rather than later.

Ren_07_Nepta_b.jpg

Peugeot 908RC
Definitely one of the best-looking products in all four Paris show halls, the 908RC previews the styling direction for the next iteration of Peugeot flagship, 608. As with Nepta, there’s something interesting about the powertrain. In this case, the 700HP 5.5L V12 diesel is due to be used in Peugeot’s next Le Mans attempt. If Audi can do it, why can’t Peugeot?
Peu_07_908RC_Cncpt_1.jpg

Citroen C-Metisse
Aside from the terrifically deep red paint, which looked far better in person than in photos, this concept felt overdone. Instead of predicting Citroen styling, however, the star is under the hood. Citroen is looking to have a diesel-hybrid in their range in 2010, and the C-Metisse (and Metisse means hybrid in French, by the way) sported a 208HP 3.0L V6 diesel with electric motors supporting it. The motors were at the rear wheels, and good for 20HP each.
Cit_06_Metisse_Cncpt_2.jpg


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GM, Renault, Nissan in Possible Tie-up

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The buzz around the global auto industry on Friday June 30 was that a possible tie-up between General Motors, Renault and Nissan was being seriously discussed by GM’s board. A meeting held on June 20 in Nashville (Nissan North America’s new headquarters) between Kirk Kerkorian, Jerry York and Carlos Ghosn explored possible relationships. Kerkorian’s Tracinda Corp. owns 9.9% of General Motors – the 4th largest shareholder – and Jerry York, Kerkorian’s right hand man, is Tracinda’s representative on GM’s Board. Carlos Ghosn is chairman of Renault and chairman of Nissan. Could he also become chairman of General Motors and then rule the auto world with 25% of the global market?
GM’s Board had a urgently called telephone conference on Friday to discuss the issue. No news yet.
General Motors Share Price Skyrockets
GM’s share price rocketed 8.6% on Friday on the news and skeptics opined that Kerkorian had orchestrated the news to win back the losses his investment in GM has taken over the past year. Others saw this as another wake-up call to Rick Wagoner that the restructuring of General Motors is not moving fast enough and that someone like Carlos Ghosn is needed to impersonally and analytically cut through the inertia that faces the General. Admittedly, Rick Wagoner has one of the toughest jobs on the planet and steering GM is like steering the Titanic. It cannot change direction quickly. But Ghosn demonstrated that you can turn around a huge ship – Japan’s second largest carmaker Nissan returned to profitability two years following Ghosn taking the helm.
Personalities, Personalities, Personalities
Think about the personalities. Wagoner the low-key professional chairman trying to improve the General incrementally. Bob Lutz the charismatic product czar of GM whose impact is just beginning to be seen in newly introduced products. Jerry York the impatient financial wizard from Chrysler/IBM/Tracinda who is delving into GM’s operations. Kerkorian the “long term investor” trying to make a risky investment a sure thing. Carlos Ghosn another charismatic exec credited singlehandedly with saving Nissan. Wow! This is fun!
Don’t Forget China
Oh, don’t forget. GM has a solid presence in China and Renault and Nissan much less so. This tie up could really benefit Renault and Nissan in China.
Stay Tuned
Stay tuned. This will play out quickly over the next week or so. Is Kerkorian just playing with his share price? Is he really able to goose GM into accelerating its restructuring? Will any sort of relationship develop between GM/Renault/Nissan? Between Wagoner/Lutz/Kerkorian/York/Ghosn?


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