Tag Archive | "Ford"

Ford Profit Driven Down By North America, Warranty Costs


Via Reuters

Ford Motor Co posted a lower-than-expected first-quarter profit on Friday as the No. 2 U.S. automaker saw $400 million in higher warranty costs in North America, sending shares down 3.4 percent.

The company also saw incentives in North America rise in the quarter due to heavy competition and an aging lineup of vehicles it will address with the launch of 16 new models in the region this year.

Fitch Ratings analyst Stephen Brown called 2014 a transition year for Ford and said earnings will improve in the second half.

“They’ve got a few challenges out there, but … the company has a lot of new products coming online this year. They haven’t seen the benefits (of the new vehicles) on dealer lots yet.”

Ford Chief Executive Alan Mulally, 68, told analysts on a conference call that there was no change to plans for him to remain at the company through the end of the year. Earlier this week, a source said that Ford will soon name Chief Operating Officer Mark Fields as Mulally’s successor.
While Ford adjusts its warranty reserves every quarter, Chief Financial Officer Bob Shanks said the total was larger in the first quarter because the company has seen more field service actions, such as safety recalls and addressing customer complaints, over the last two years. He said that was a trend in the industry as vehicles become more complex.

The company affirmed its forecast for pretax profit for 2014, a year in which it is launching a record 23 new vehicles globally. It also said it is amending and extending its revolving credit facility.

Shanks said the underlying business remains strong.

“The run rate is very healthy and we feel that we’re moving forward very nicely in terms of what we expect for the year and setting us up for stronger growth and stronger profitability in 2015 and beyond,” he told reporters at the company’s Detroit headquarters.

Net income fell 39 percent to $989 million, or 24 cents a share, from $1.61 billion, or 40 cents a share, in the year-earlier period.

The quarter included the $400 million in additional costs for warranty reserves in North America for vehicles from as early as the 2001 model year, and $100 million in costs related to higher freight and other items due to the harsh winter in North America. It also included previously disclosed costs of $400 million, mostly due to the currency devaluation in Venezuela. All three items totaled 17 cents a share.

Excluding one-time items for European restructuring, Ford earned 25 cents a share, 6 cents below analysts’ estimates in a poll by Thomson Reuters I/B/E/S, or about the same amount as the warranty reserves. Weather costs accounted for another two cents.

Revenue was up slightly at $35.9 billion, above the $34.06 billion analysts had expected.

EUROPEAN LOSS NARROWS

Ford, which still expects a pretax profit this year in the range of $7 billion to $8 billion, said its credit facility is expected to grow to about $12 billion, from $10.7 billion after its completion at the end of the month. It sees operations in South America weaker than it previously forecast for the year, while Asia Pacific’s profit will be higher than last year.

Shanks said various global launches, including its redesign for the highly profitable F-150 full-size pickup truck, remain on track.

Net pricing in the quarter was up only $175 million as incentives increased $471 million over last year. Most of those higher incentives were offered in North America, where net overall pricing actually declined $139 million.

The North American operating profit fell by more than a third to $1.5 billion. RBC Capital markets analyst Joseph Spak said that was below Wall Street’s expected consensus of $2.2 billion and the company’s profit margin in the region was weaker than expected.

The North American operating margin fell to 7.3 percent from 11.1 percent last year as Shanks said the warranty and weather-related costs took a bite of 2.5 percentage points. However, Ford affirmed its outlook for a full-year margin in the region of 8 to 9 percent.

Overseas, business was more positive as demand continued to increase in China, the world’s largest auto market, and the company’s losses in Europe narrowed and were lower than expected according to analysts.

Stifel analyst James Albertine said the outlook in Europe trumped the overall profit miss. “EU growth may come more quickly than anticipated,” he said in a research note.

In China, Ford said its market share hit a record 4.5 percent, up from 4.4 percent in the fourth quarter. The profit in Asia Pacific rose to $291 million from a year-ago loss of $28 million, and the company’s profit margin in the region was a far stronger than expected 11 percent.

The company’s loss in Europe, which has been a drag on Ford profit for several years, was $194 million, down from $425 million a year ago.

Shanks affirmed the company’s previous outlook that it will return to profitability in Europe in 2015, helped by its own cost-savings actions as well as a rising European auto market.

The loss in South America, however, deteriorated to $510 million from a loss of $218 million last year due to the currency devaluation in Venezuela and Argentina. Ford now breaks out Middle East and Africa as its own region and its profit there rose 15 percent to $54 million.

Ford shares were down 3.4 percent at $15.77 on the New York Stock Exchange on Friday morning.

Posted in Auto Industry NewsComments (0)

Ford, Chevy and Toyota Lead the Way in Edmunds.com’s Inaugural Most Popular Vehicle Awards


Santa Monica, Calif. – Ford, Chevrolet and Toyota are the most decorated brands among a diverse selection of new cars and trucks that earned the 2014 Most Popular on Edmunds.com Awards. The inaugural awards were presented by the car shopping Web site at the 2014 New York International Auto Show.

Ford has the strongest representation of any brand recognized by the Most Popular on Edmunds.com awards, with 10 winning vehicles. Highlights include the Ford F-150, which was named one of the 2014 Most Popular on Large Trucks; and Ford Mustang, which was named one of the 2014 Most Popular on Entry Sport Cars.

Chevy and Toyota each earned seven awards. Highlights include the Chevy Colorado, which was named one of the 2014 Most Popular on Compact Trucks; and the Toyota Camry, which was named one of the 2014 Most Popular on Midsize Sedans.

Acura, Audi, BMW, Cadillac, Dodge, GMC, Honda, Infiniti, Jaguar, Jeep, Kia, Lamborghini, Land Rover, Lexus, Mazda, Mercedes-Benz, MINI, Nissan, Porsche and Tesla also were honored in a range of categories.

“Edmunds.com is in a unique position not only to offer independent and trusted reviews of every vehicle on the market, but also to see firsthand which cars and trucks most pique the interest of shoppers on our site,” said Seth Berkowitz, president, Edmunds.com. “By naming these award-winning vehicles, we hope that car shoppers have an easier time evaluating some of the excellent choices available on the market today.”

The 2014 Most Popular on Edmunds.com awards were determined by finding the three models in each of 23 vehicle segments with the highest total monthly car-shopper consideration in calendar year 2013. “Consideration” means the number of unique visitors during a calendar month to the research and inventory pages on Edmunds.com desktop site for each new model.

Posted in Auto Industry NewsComments (0)

Industry Records 1.4% Sales Increase in March


After three months of harsh winter storms, new-vehicle sales in March rose 1.4% from a year ago to 3.74 million units, according to Autodata Corp. The seasonally adjusted annual rate (SAAR) stood at 16.4 million, up from last March’s 15.3 million rate and up from 15.34 million in February. The following is a breakdown of sales performance by manufacturer:

BMW: The BMW Group reported an 8.1% increase in March sales vs. one year ago, with sales totaling 35,839 units. On a year-to-date basis, sales were up 2.8% from a year ago on sales of 81,228 units in the first three months of the year. BMW Brand Sales increased 18.6% from a year ago to 32,107 units. On a year-to-date basis, sales increased 11.5% from the same period last year to 72,377. Sales for MINI USA dropped 39.8% from a year ago to 3,655 units sold. On a year-to-date basis, sales were down 38.4% on volume of 8,657 units.

Chrysler: Chrysler Group LLC reported its best March sales since 2007, with sales increasing 13% from a year ago to 193,915 units. The Jeep (up 47%), Ram Truck (up 29%) and FIAT (up 24%) brands each posted year-over-year sales gains vs. a year ago, with Jeep posting the largest gain of 144% despite the recall of the Jeep Liberty. Chrysler is the only brand to show a decrease of 23% on year-over-year basis.

Six Chrysler Group vehicles set sales records in March, including the Jeep Compass, Patriot, Dodge Journey and FIAT 500L. The Jeep Wrangler and Ram Cargo Van also logged their best ever March, while the Dodge Grand Caravan had the largest year-over-year percentage sales increase of any Chrysler Group models in March.

Ford: The domestic automaker realized its best March sales in eight years. Retail sales totaled 244,167 units, a 3.3% increase from a year ago. The Ford Fusion posted a record sales month with 32,963 cars sold, up 9% from last year’s record month, while the F-Series broke the 70,000-unit mark in March.

Led by the MKZ, Lincoln sales increased 72% from a year ago — the brand’s best-ever sales month. March also marked the sixth straight month of positive sales for Ford’s luxury brand. And over the last five months, Lincoln sold 43,445 units, a 27% increase over the same period one year ago.

General Motors: The domestic automaker reported a 4.1% sales increase vs. one year ago, with the company delivering 256,047 vehicles in March. On a year-to-date basis, however, sales declined a slight 2.3%. Officials said they expect to see solid economic growth in the upcoming months.

Sales for the Chevrolet Silverado, the 2014 North American Truck of the Year, were up 14%, while sales of the GMC Sierra were up 23%. Deliveries of the Corvette were up 221% from a year ago. As for Cadillac, the brand’s CTS sedan drove an 11% increase in retail sales for CTS models, while sales of the SRX were up 37% from a year ago.

Sales of the Buick Regal were also up 52% from a year ago, while sales of the Encore increased 71% vs. March 2013.

Honda: American Honda reported a 2% decrease in sales from a year ago, with sales totaling 133,318 units. The company’s Acura division, however, realized a 10.4% increase in sales vs. one year ago, with sales totaling 15,580 units. Leading the way was the MDX, which realized an 80% sales increase from a year ago. Sales of the brand’s flagship model totaled 5,793 units. Additionally, sales of Acura trucks rose 45.8% from a year ago, with sales totaling 10,387.

The Honda division recorded sales of 117,738, with the Accord leading the way with March sales totaling 33,962 units. Sales of the Civic and CR-V both eclipsed the 27,000-unit mark, while Odyssey sales rose above the 10,000-unit mark.

Hyundai: The Korean automaker reported a slight 1.9% decreased in March sales, which totaled 67,005 units. On a month-to-month basis, however, sales were up 37% from February. Leading the way was the Santa Fe, which realized a 36.7% sales increase from a year ago. Sales of the Tucson rose 13.6%, while Equus sales were up 13.8%. Sales of the Sonata and Veloster were up 6.8% and 3.3%, respectively.

Mazda: The automaker reported its best-ever sales for March, with sales increasing 9% from a year ago to 34,903 units. The MX-5 also realized its best March since 2009, with sales increasing 31.1% from a year ago to 751 units sold. Additionally, ALG reported that the 2014 Mazda3 has the highest residual value in its segment, while KBB.com listed the entire Mazda brand as the most affordable nonluxury brand to own over a five-year period.

Mercedes-Benz: The German automaker reported its best first quarter sales ever, with March sales rising 11% from a year ago to 30,091 units sold. The Mercedes-Benz brand alone sold 29,316 units in March, a 12% increase from a year ago. On a year-to-date basis, sales rose 5.8% to 77,238 units.

The E-Class took the top spot with 6,335 units sold, a 58% increase from the same month last year. Sales of the C-Class totaled 5,660, while sales of the M-Class totaled 4,052 units, up 15.7% from March 2013. Sales of the company’s flagship S-Class totaled 2,299 for the month, up 89.1%.

Mitsubishi: The OEM reported its best March in six years, with sales increasing 70% from a year ago and 24% on a year-to-date basis. In total, the automaker sold 8,996 units in March. Outlander realized its best March sales since 2008, with sales rising 59.9% for the month and 22.4% year to date. Additionally, Lancer sales in March were up 72.4%, while sales of the Lancer Evolution were up 27.1%.

Nissan: The Japanese automaker reported an 8.3% increase in March sales vs. a year ago, with sales totaling 149,136 units — the company’s best month in 12 of the last 13 months. Sales of the all-electric Nissan LEAF set a March record, with sales increasing 12.1% from a year ago to 2,507 units. Nissan Altima sales totaled 35,921 units in March, its best sales month since March 2013. Sales of the Nissan Juke also reached a new monthly high, with sales increasing 77.3$ from a year ago to 6,943 units.

Infiniti reported sales of 12,494 units in March, an increase of 12.5% vs. one year ago. Sales of the all-new Infiniti Q50 luxury sports sedan totaled 3,795 units, while overall sales of Infiniti sports sedans, including the Infiniti G37, rose 27.9% for the month.

Toyota: Toyota Motor Sales reported a 4.9% increase in March sales vs. one year ago, with sales totaling 215,348 units. Toyota division sales were up 2.5%, totaling 186,755 units. Lexus sales increased 23.3% from a year ago to 28,593 units.

By model, the Toyota Camry posted sales of 42,000 units, while sales of the all-new Corolla totaled 30,000 units. Sales for Toyota’s truck division were up 10%, while the RAV4 realized its best-ever first quarter with more than 20,000 units sold. As for Lexus, the IS posted a 117% increase, while sales of the GS were up 32%. Sales of the RX closed in on the 10,000-unit mark, while sales of the brand’s luxury utility vehicles were up nearly 20% from a year ago.

Volkswagen: March sales for the German automaker were down 2.6% from a year ago, with sales totaling 36,717 units. Sales of the Jetta Sedan totaled 13,687 units for the month, up 6.3% vs the prior year, while the Passat realized its best March ever with sales totaling 11,050 units.

Audi realized its best-ever March and its 39th consecutive record sales month. Audi sales finished 7.5% ahead of the 13,253 units sold in March 2013. Through the first quarter, sales totaled 35,228, a 3% increase from one year ago. Sales of the A6 increased 26.7% from a year ago, while sales of the Q7 increased 45.8%.

Porsche reported a 9.2% sales increase vs. one year ago and a 5% sales increase on a year-to-date basis. The automaker realized its all-time best March, with 3,808 units delivered. The Cayenne continued to be the automaker’s most popular model with 1,862 sold units. Sales of the Boxter and Panamera totaled 617 and 442 units, respectively.

Posted in Auto Industry NewsComments (0)

Autodata: February Sales Fall 1.4%


Woodcliff Lake, N.J. — Harsh winter storms continued to impact new-vehicle sales, which fell 1.4% from a year ago to 1.19 million units, according to Autodata Corp. The seasonally adjusted annual rate (SAAR), however, was even with the rate recorded in February 2013 at 15.34 million units. However, the sale rate was up slightly from 15.24 million in January. The following is a breakdown of sales performance by manufacturer:

BMW: The BMW Group reported a 4.4% decreased in February sales vs. one year ago, with sales totaling 24,476 units. On a year-to-date basis, sales were down 1.2% from a year ago on sales of 45,272 units in the opening two months of the year. BMW Brand Sales increased 3.3% from a year ago to 22,017 units. On a year-to-date basis, sales were up 6.5% to 40,270. Sales for MINI USA dropped 42.8% from a year ago to 4,302 units sold. On a year-to-date basis, sales were down 37.3% on volume of 5,002 units.

Chrysler: Chrysler Group LLC reported its best February sales since 2007, with sales increasing 11% from a year ago to 154,866 units. The Chrysler (up 1%), Jeep, Ram Truck (up 26$), and FIAT (up 5%) brands each posted year-over-year sales gains vs. a year ago, with Jeep posting the largest gain of 47%.

Six Chrysler Group vehicles set sales records in February, including the Jeep Compass, Patriot and Wrangler. The Chrysler 200 and Dodge Journey also logged their best ever February, while the Ram pickup truck posted its best February in eight years with a 26% sales increase. Additionally, sales of the all-new Jeep Cherokee rose 12% vs. one year ago.

Ford: February sales for the domestic automaker fell 6% from a year ago to 183,947 units. Retail sales totaled 125,919 units, a 4% decrease from a year ago. Officials noted a late-month sales surge, which they hope means good things for March. One bright spot was the company’s F-Series truck line, which realized its best February in eight years. Sales of the pickup truck totaled 55,882 units.

Led by the MKZ and MKX, Lincoln sales increased 36% from a year ago to 6,661 units. February marked the fifth straight month of positive sales for Ford’s luxury brand. And over the last five months, Lincoln sold 34,476 units, a 26% increase over the same period one year ago.

General Motors: The domestic automaker reported a 1% decline in sales vs. a year ago, with the company delivering 222,104 vehicles in February. On a month-to-month basis, however, sales increased 30% thanks to the company’s Olympic advertisements.

The Chevrolet Sonic, Cruze and Malibu posted double-digit sales increases, while the Cruze realized its best February to date. Deliveries of the Corvette were up 149% from a year ago. As for Cadillac, the brand’s CTS sedan helped drive a 7% increase in retail sales for the CTS range, while sales of the SRX were up 23% from a year ago.

Sales of the Buick Encore nearly doubled, while Enclave and Equinox realized their best February sales ever. Additionally, deliveries of the GMC Acadia were up 2%.

Honda: American Honda reported a 7% decrease in sales from a year ago, with sales totaling 100,405 units. Bucking the trend were Acura light trucks, with sales increasing 29.8% from a year ago to 7,482 units.

The company’s Honda division recorded sales of 88,860 units, with the Accord, Civic and CR-V (up 0.1%) each recording sales of more than 20,000 units in February. Odyssey sales increased 4.6% to 8,945 units.

The Acura Division realized a 1.6% sales increase, with sales totaling 11,545 units in February. Sales of the brand’s MDX increased 54.9% to 4,563 units. The RDX posted its 22nd consecutive monthly sales record, with sales rising 4.2% to 2,911 units sold.

Hyundai: Sales for Hyundai Motor America decreased 6% to 49,003 units in February. On a month-to-month basis, however, sales were up 11% from January. Despite the tough month, two of brand’s smallest cars, the Accent and Veloster, realized a sales increase of 20%, while sales of the company’s two SUVs, the Santa Fe and Tucson, were up 12% from a year ago.

Mazda: The automaker reported February U.S. sales of 24,431 vehicles, a 2.4% decrease from a year ago. Year-to-date sales through February were down 6.7% vs. last year, with 43,155 vehicles sold. However, the Mazda6 experienced its second-best February since 2008 with 3,945 vehicles sold, a 46% increase from a year ago. The CX-5 realized its best sales month ever, with sales increasing 71.6% to 9,355 units sold. The company also reported that its SKYACTIV Technology accounted for 83.2% of all vehicle sales during the month, the largest percentage sold in one month.

Mercedes-Benz: The German automaker reported sales of 24,971 units for the month of February, a 3.8% increase from a year ago. This was the highest volume on record for the month, officials noted. The Mercedes-Benz brand alone achieved record February retail sales of 22,609 units, a 2.65% increase from a year ago. On a year-to-date basis, sales rose 1.5% to 45,213 units.

Sales were the led by the brand’s C-, E- and M-Class model lines, with sales totaling 5,612, 4,271 and 3,258 units, respectively. At the high end, sales of the all-new 2014 S-Class flagship model jumped 93.8% to 1,789 units.

Mitsubishi: The OEM reported a 1.2% dip in sales from February 2013, with sales totaling 5,977 units. On a year-to-date basis, sales were up 1.3% from a year ago. Sales of Mitsubishi’s core models (Outlander Sport, Outlander, Lancer, and Mirage) were up 8.9% in February and 12.7% on a year-to-date basis. Realizing the biggest sales increase was the Outlander Sport, with sales up 42.8% from a year ago.

Nissan: The Japanese automaker reported a 15.8% increase in February sales vs. a year ago, with sales totaling 115,260 units — a record total for February. Sales of the all-electric Nissan LEAF also set a February record, increasing 118.2% to 1,425 units. Also setting a new monthly record was the Rogue, with sales rising 72.6% to 17,197 units. The Nissan Juke also recorded its best monthly sales total, with sales rising 111.7% to 5,791 units.

Infiniti reported sales of 9,729 units in February, an increase of 6.4% vs. one year ago. Sales of the all-new Infiniti Q50 luxury sports sedan totaled 3,275 units, while overall sales of Infiniti sports sedans, including the Infiniti G37, rose more than 14.4% for the month.

Toyota: Toyota Motor Sales reported a 4.3% decrease in February sales vs. one year ago, with sales totaling 159,284 units. Toyota division sales were down 5%, totaling 140,429 units. Lexus sales increased 8.7% from a year ago to 18,855 units.

By model, the Toyota Camry posted sales of 29,000 units, while sales of the all-new Corolla totaled more than 25,000 units. The RAV4 realized its best February sales, with sales increasing 23% from a year ago. Also realizing its best-ever February sales month was the all-new Highlander, which posted a 30% sales increase from a year ago. As for Lexus, the IS and GX posted triple-digit sales gains, while sales of the GS were up more than 42%. The Lexus RX posted sales of more than 5,600 units.

Volkswagen: February sales for the German automaker were down 13.8% from a year ago to 27,112 units delivered. This was due, in part, to the winding down of outgoing models and the fewest number of selling days for the year, officials noted. Volkswagen’s TDI Clean Diesel models accounted for 16.8% of sales in February. Total Jetta deliveries accounted for 11,908 units of Volkswagen’s February sales total, while sales of the Passat totaled 6,997 units.

Audi sales just about mirrored last February’s sales totals, with 10,881 units sold. Leading the way was the company’s luxury SUVs, with the Q7 posting a 33.6% sales gain from a year ago. Sales of the company’s luxury sedans also stayed strong, with the A6 posting a sales increase of 27.2% vs. one year ago. Sales of the R8 were also up 40% vs. a year ago.

Porsche realized a 15% boost in sales over this time last year and a 2% increase on a year-to-date basis. The automaker realized its all-time best February, with 3,232 units delivered. The Cayenne continued to be the automaker’s most popular model with 1,260 sold units.

Posted in Auto Industry NewsComments (0)

Toyota, Ford, Honda & Chevrolet Dominate Consumer Reports 2014 Car-Brand Perception Survey


Yonkers, N.Y. – Consumers continue to distinguish Toyota, Ford, Honda and Chevrolet as the leading brands overall, but several others, including Tesla and Subaru, are moving up the rankings, according to Consumer Reports’ annual Car-Brand Perception Survey.

Toyota has a 25-point advantage over second-place Ford, reflecting a five-point gain over the year prior for Toyota and a three-point improvement for Ford. It could be interpreted that the safety concerns that saw the Toyota score stumble a few years ago have faded, returning the brand to its position as the perceived industry leader.

The scores reflect how consumers perceive each brand in seven important buying factors, ranked in order of the importance to consumers: quality, safety, performance, value, fuel economy, design/style and technology/innovation. Combining those factors gives the total brand-perception score. While the scores reflect a brand’s image, they do not reflect the actual qualities of any brand’s vehicles.

“The key word is ‘perception’. Consumers are influenced by word of mouth, marketing and hands-on experience. Often, perception can be a trailing indicator, reflecting years of good or bad performance in a category, and it can also be influenced by headlines in the media,” said Jeff Bartlett, deputy automotive editor, Consumer Reports.

The survey shows the brand to watch is Telsa Motors, which jumped from 47 points last year, to fifth position with 88 points. Tesla had a strong, very public year, with soaring stock prices, magazine awards and exceptional crash-test performance. Innovation, performance and sleek styling is clearly gaining attention and making a positive impression. By gaining points in several categories, Tesla was able to raise its overall score. This highlights the value of being good at multiple things, rather than rely on a single facet.

Consumer perception of Subaru’s safety is a key factor in that brand’s ascension into the top 10. This modest-scale automaker made big news over the past year with its “good” crash-test performance, among other accomplishments. All its models, except for the aged Tribeca, have earned coveted Top Safety Pick+ status from the Insurance Institute for Highway Safety (IIHS). The survey results suggest consumers are paying attention.

That the remainder of the Top 10 all score 73 or higher is notable; last year there was a wider spread. Many brands impress consumers, creating a challenge for brands to distinguish themselves in the fast-moving marketplace. Likewise, consumers need to determine where to spend their money.

Quality:
The top factor for car buyers remains quality, scoring 90 points both this year and last. What has changed is the number of brands that are distinguished by this attribute. In 2013, Consumer Reports had four brands show a clear advantage; this year, there are six that stand out from the herd, including Cadillac in sixth place. Toyota has an advantage here, with the other brands clustered close behind. Seeing the brands that are considered exemplar for this virtue underscores how “quality” can be broadly interpreted, ranging from tactile first impressions to long-term durability.

Safety:
Volvo has long hung its hat on safety, and this focus continues to pay off. In the minds of consumers, there is a single, clear choice. The Swedish brand increased its lead this year, potentially aided by public awareness of advanced safety features in general, and Volvo’s continued efforts to remain on the forefront of safety technology. It will be a challenge for automakers to close the gap with Volvo, but Subaru demonstrates that it is possible with consistent performance across a model range.

Performance:
As Consumer Reports has seen in recent years, standout brands tend to offer a balance of sporty and fuel-efficient models. Chevrolet exemplifies this concept, as it takes the lead for 2014 propelled by the Corvette Stingray, Camaro and SS, with the Cruze diesel and Volt likely proving a factor, as well. BMW remains in second place, bolstered by turbocharged engines that strive to improve both acceleration and fuel efficiency, plus its electrified i3 and i8.

Value:
Consumers remain value conscious, looking to get the most for their money. With cars, that means looking beyond the purchase price to what the car delivers for that money. Here, Consumer Reports survey showed consistent year-over-year rankings, with the same five automakers topping the chart: Toyota, Honda, Ford, Kia and Chevrolet.

The twist this year is the corporate siblings Hyundai and Kia have traded places, with about an eight point difference each year separating the two. Clearly, both have the potential to rightfully shine in this area, but their volatile movements suggest owners keep seeing them in different lights, perhaps influenced by the visibility of Hyundai’s special recession-proof financing guarantees and introduction of new, compelling products.

Fuel economy:
Toyota owns fuel economy in the minds of consumers, aided by its Prius hybrid and its continued benchmark performance, with 44 mpg overall. But this is a trait that all automakers are chasing. Smart jumped up 10 points this year, despite not offering a new product. Honda continues to hover near the top, with its continued focus on efficiency. Tesla and Volkswagen crashed the party this year, with increased recognition for their accomplishments. The electric Tesla Model S garnered much attention this year for its combination of gas-free luxury and performance, with ample range that enables it to be a truly traditional car replacement. Volkswagen continues to carve a notable niche with its efficient diesel powertrains, now joined by a hybrid in the Jetta line.

Design/style:
Notably a less important factor, design/style still plays a vital role in driving car purchases. Truly a subjective measure, design continues to be led by the prestige brands BMW, Cadillac, Audi and Mercedes-Benz. But, their lead is slight and vulnerable to the fickle tides of public tastes. Consumer Reports’ survey has seen mainstream brands be increasingly daring in recent years, and several have invested in upscale exterior dressing, such as extensive chrome and LED lights, to grab attention. The top 10 here is rounded out with Ford, Lexus, Ferrari, Tesla and Dodge.

Technology/innovation:
The least important car-buyer factor rated by consumers in CR’s survey, technology/innovation, is still a significant consideration for at least 68 percent of car shoppers. Automakers are racing to offer the latest, greatest infotainment and advanced safety features. And consequently, brochures and advertising are overflowing with similar-sounding systems from across the industry, making it difficult for brands to distinguish themselves. But this year, Tesla has done so, giving the fresh brand a commanding lead in this year’s rankings. The other top brands all have focused on consumer-facing technology, though with mixed results. The much-ballyhooed infotainment systems from these brands often leave something to be desired.

Posted in Auto Industry NewsComments (0)

CarFinance.com Releases New Loyalty Data


Irvine, Calif. – A new brand loyalty report from CarFinance.com shows that below-prime car buyers are less loyal than the average car buyer, are making practical choices as they re-enter the market and are trading in slightly younger vehicles this year than last. The report lists the top five brands for loyalty and purchase, as well as the most traded-in model years for below-prime car buyers. Based on an analysis of trade-in data from January 2013 to September 2013, the report offers a unique snapshot of the large population of car-buyers who are below prime.

“This report offers one of the industry’s only views of below-prime car-buyer behavior,” said CarFinance.com CEO Jim Landy. “Given that over half of all used, and over one in four new, car loans today go to below-prime consumer, this is data that both automakers and consumers might want to take note of. These buyers, who are getting back on their feet, are contributing to the auto industry recovery, and this report provides a view of the brands these consumers are relying on – and trust – the most.”

Below-prime car buyers, according to the report, are most loyal to Kia overall, although Nissan came in a strong second. When looking at the brands consumers are buying most when trading in, Chevrolet came in at number one, followed by Ford. So, while import brands score highest for loyalty, it is the domestics that these buyers are opting for more than any other brand.

And, given that brand loyalty for this buyer is almost half that (24%) of the average buyer (44%), Chevrolet’s strong showing is significant. Their recent introduction of competitively priced, feature-rich sedans with good fuel economy, such as the Cruze and Malibu, as well as their traditional strength with trucks, is resonating with below-prime consumers.

In addition, the data offers an interesting picture of the age of the vehicles being traded in by these buyers. While the average age of a vehicle on the road today is 11.4 years, the average age of a vehicle traded in by these below-prime car buyers is 8.8 years, a 6% decrease from the previous year’s 9.4. The most traded-in model year is 2006 and the top five years traded-in all pre-date the recession.

“The data continues to demonstrate that these buyers are making practical choices which not only benefit traditional economy brands, but also brands – such as Nissan and Ford – that are offering consumers good value in their entry level vehicles,” said Landy. “While these buyers are not particularly brand loyal, they favor brands that offer competitively priced vehicles with the must-have features that today’s consumers demand. They are also showing more confidence about re-entering the market, as evidenced by the fact that the age of their trade-ins is decreasing.”

Mirroring CarFinance.com’s most purchased models by below-prime car buyers, the loyalty story here is that three Kia models are in the top ten most purchased vehicle list. Kia’s options for this car buyer make it no surprise that their loyalty is strong. Meanwhile, an almost equally solid showing by Nissan, a brand that is well beyond consideration as an economy brand, is of note. Longtime Nissan owners have excellent options with Nissan’s entry vehicles, Versa and Sentra, both of which have made major strides since many of these owners were last in the market.

Below-Prime Car Buyer Loyalty: Top Five Brands Overall

  1. Kia
  2. Nissan
  3. Dodge
  4. Chevrolet
  5. Ford

The inroads made by domestic brands in recent years, with their small and mid-sized sedans, are also resonating with this segment. Together with their continued strong truck offerings, Dodge, Chevrolet and Ford are continuing to command loyalty with the below-prime car buyer.

The average age overall of cars traded in by these buyers is 8.8 years, and it is worth noting that the top five model years are all pre-recession models. While it is possible that some of the buyers did not own the vehicles for the full life span, they are trading in well under the average age of vehicles in the general population, i.e. these consumers are not holding on until their vehicles die. This indicates increased confidence among these buyers about entering the market – and when their vehicles are still viable trade-ins.

Top Trade-in Model Years

  1. 2006
  2. 2007
  3. 2008
  4. 2005
  5. 2004

The CarFinance.com Below-Prime Brand Loyalty Report is based on an analysis of funded loans used to purchase a new or used vehicle and where a trade-in was part of the transaction. The data analyzed covered the first three quarters of 2013.

Posted in Auto Industry NewsComments (0)

Page 10 of 13« First...89101112...Last »