Category Archive:

Selling Smaller Cars in the US Won't be Child's Play

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AutoPacific_VV.jpgAutoPacific, Inc. and SIGMA GmbH use Model-Level Social Milieus to Help Manufacturers Determine How to Make Small Cars Sell to US Consumers
TUSTIN, Calif. USA and MANNHEIM, Germany (December 9, 2009) – Tightening CAFE standards may force smaller cars on US car buyers who are not inclined to downsize. “Our research shows that, despite what the U.S. Government is telling us, few Americans want to downsize to smaller cars,” says George Peterson, President of AutoPacific, “Finding more buyers inclined to purchase smaller cars will not be easy.”
For years, the US automobile industry has relied heavily on analyzing demographic factors in order to segment the marketplace, and sell consumers vehicles with different characteristics. Traditional socio-demographic targeting using variables such as sex, age, education or income, has been the norm. While many manufacturers have tried to create independent systems for segmenting the market, the results are often short-lived, and lack a global perspective in an industry that clearly must design and sell vehicles on a global level.


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Do Green Cars Really Add Up?

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AutoPacific_VV.jpgReconciling Consumer Expectations with Reality Won’t be Easy
TUSTIN, Calif. (December 2, 2009) — A study released today by automotive research firm AutoPacific shows that while consideration for alternative fueled vehicles is on the rise, it is often driven by economic forces, rather than consumer desire to help the planet. “We have witnessed that hybrid consideration increased with fuel price, until people became used to higher fuel prices,” says Jim Hossack, Vice President of AutoPacific. “Fuel prices have settled down in 2009 and so has demand for hybrid vehicles”
Going green will not be a walk in the park. Hybrid considerers are 10 percentage points more likely than gasoline considerers to agree with the statement, “I am prepared to pay a higher price for an environmentally friendly vehicle.” This is even truer for plug-in hybrid considerers (+17 percentage points) and pure electric considerers (+ 19 percentage points). However, they plan to pay between $2,000 and $5,000 less on their next vehicle than gasoline considerers. “Clearly, there is a disconnect here. While green car considerers indicate that are willing to pay more, they are actually budgeting less for their next car. This needs to be reconciled, or alternative fueled vehicles may stall in the marketplace,” said Hossack.


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2011 Audi A8 Premium Luxury Reveal

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On Monday November 30, Audi AG revealed the all new Audi A8 flagship sedan to the world media in Miami, Florida. There were 850 journalists in attendance from the USA, Europe, South America, China, Japan, Russia… anywhere you can name.
2011 Audi A8 SV VehicleVoice.jpg
Capping Audi’s Centennial Anniversary, the launch of the A8 is very significant to the company. The A8 is being introduced in Europe and China earlier in 2010 with the USA getting A8 in Winter 2010 or Spring 2010.
Study Team Visits USA and China The A8 has a special place in AutoPacific’s heart. In early 2006, AutoPacific hosted an Audi study team working on finalizing the concept of the A8. The team was in the USA for about three weeks. After visiting the USA, they spent a month in China where Audi outsells BMW and Mercedes-Benz by two-to-one. This group of engineers, planners, designers, financial experts and production managers were extremely enthusiastic, very knowledgeable and anxious to do what was right for the car and for Audi.
The results of their work is the all new 2011 Audi A8. Wow, what a car!


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Audi A8 Premiere – Launch Gala the Old Way

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Old Time Extravaganza Let’s call it a shindig. A Hollywood premiere. Audi celebrated its 100th Anniversary and introduced its all new A8 premium luxury sedan to the world on Monday night in Miami Beach at the renowned Founainbleau Hotel.
Audi Pavilion Miami 11-09.jpg

Audi’s Miami Beach Pavilion Hidden by Palm Trees

Audi constucted a monolithic hurricane-capable structure about a quarter mile up Miami Beach in which to hold the affair. The building will be used for about a week with Audi-related events. Media and glitterati on Monday night, dealers, community VIPs, consumers will all get a chance to see the new A8 during the week of November 30.
The total cost for the program is said to be $9.5 – $10million. This is a very significant sum today and goes back to the way automakers used to launch their cars – before today’s huge buget cuts.
Miami Design Week As a sponsor of Art Basel Miami Beach, Audi has provided transportation to various venues and display space for contemporary art.


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Ford's EcoBoost Establishes a Beachhead

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Ford Motor Company launched a new powertrain technology called EcoBoost earlier in 2010. EcoBoost will eventually be available on 90% of Ford’s lineup in the USA. The first EcoBoost installations are in Ford’s new D3 Platform vehicles – Ford Taurus SHO, Lincoln MKS, Lincoln MKT, and Ford Flex. EcoBoost’s first installation is a 3.5L V6 with gasoline direct injection and twin turbochargers. Power output on the Taurus SHO is 365HP while on the MKS, MKT and Flex is 355. The EcoBoost 3.5L has 350lb-ft of torque. These technology advancements yield substantially better performance while achieving equivalent fuel economy as a vehicle equipped with a non-EcoBoost 3.5L (of course this is only on paper. EcoBoost is so fun to drive you’ll be in it all the time – achieving equal fuel economy is just a dream).
EcoBoost Badge_VehicleVoice.jpg
EcoBoost a $5,000 Proposition Anyway, EcoBoost is not free. A Taurus SHO is almost $40,000 and the price increase for EcoBoost on the MKT, MKS and Flex comes out to about $5,000. That price includes all wheel drive which EcoBoost requires to handle the power and torque on the front wheel drive platform. So, with the power and price increase, how many is Ford selling?
EcoBoost Installations Running Ahead of Forecast According to George Pipas, Ford’s spokesman for sales reporting and arcane numbers, the Taurus SHO now represents about 15% of the Taurus lineup. This is 5%-pts higher than Ford had estimated. Each Taurus SHO generates $10,000 more economic profit than an average Taurus. Installation rate on the Lincoln MKT is 47%. About 30% of Lincoln MKS gets EcoBoost (and 37% gets AWD). The Flex has about an 11% rate lowest of the four.
So, it appears that EcoBoost is well on its way to being a success even in these tough economic times. In each vehicle line, with the possible exception of Flex, the installation rate is healthy for a performance option. It will be interesting to see what the mix is of EcoBoost engines as Ford continues to roll the technology across its vehicle lines.


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Mitsubishi i-Gas and i-MiEV – Ready for Prime Time?

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I have been looking for a chance to drive the diminutive Mitsubishi i-Cars ever since I first saw the photos of them. When visiting Mitsubishi HQ in Cypress, California, there they are in the lobby on display. But it wasn’t until the just finished Outlander and Friends press preview Mitsubishi held in Palm Springs that I was able to drive both of the i-Cars.

Mitsubishi i-MiEV_SV_VehicleVoice.jpg

There were two i-Cars at the preview – the i-MiEV (Mitsubishi innovative Electric Vehicle) – the all electric Japanese kei car that the press is reporting on continuously and its gasoline-powered base car. Lets talk about the gas-powered version first.
“kei” Car for the USA? First, the Mitsubishi i is a very, very small car. It is a Japanese “kei” car meaning it is designed to be a tiny commuter car for dense urban environments. It also means that the car is limited to a 660cc engine. The example we were able to drive was powered by a turbocharged 660cc engine, had an automatic transmission and all wheel drive.


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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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Motorist Choice Awards Reveal Vehicles That Please Both Hearts And Minds

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vv_intellichoice_autopacific_mca.jpgAwards Show Consumers Enjoy Luxury and Size
(August 11, 2009) — Right brain, left brain; the practical versus the emotional — an age-old dilemma often at the center of decision making when buying a new car or truck. The 2009 Motorist Choice Awards recognize new cars and trucks that give their owners both economic and emotional satisfaction, helping new-car buyers find vehicles that best satisfy all of their personal-transportation needs. The fourth annual Motorist Choice Awards survey, announced today, scores 196 cars, trucks, crossovers and SUVs. With the top overall scores in both owner satisfaction and value, the Lexus LS placed highest of any 2009 model year vehicle.
Large and luxury vehicles dominated this year’s results. The top 34 ranked cars, and 106 of the top 107, are large cars, luxury cars, sport utility vehicles, crossover SUVs or minivans. Only one small car, the BMW 1-Series, scored in the top 100, landing in the 35th slot. Toyota Prius is the next-highest-scoring small car, coming in 107th.
Awards are given for top-scoring vehicles scoring in each of twenty-three segments, as well as for the top-scoring brand. Nine manufacturers earned segment wins, led by Toyota with nine awards (including three for Lexus), followed by General Motors with six (Chevrolet 4, Cadillac 2), Honda with three, and Chrysler with two (Dodge 1, Jeep 1). Audi, Ford, Hyundai, Nissan and Volkswagen took top honors in one segment each.
(And check out our video on YouTube.)


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