Automotive market
Encyclopedia
The automotive market is formed by the demand and the industry. This article is about the general, major trends in the automotive market, mainly from the demand side.
The European automotive market has always boasted smaller cars than the United States. With the high fuel prices and the world petroleum crisis, the United States may see its automotive market become more like the European market with fewer large vehicles on the road and more small cars.
For luxurious cars, with the current volatility in oil prices, going for smaller cars is not only smart, but also trendy. And because fashion is of high importance with the upper classes, the little green cars with luxury trimmings become quite plausible .
s (SUVs) in favor of smaller cars and crossover vehicles. As a result, GM saw significant increases in the retail sales of its Chevrolet Malibu
, Chevrolet Aveo
, and Pontiac Vibe
in 2008 May, while its May sales of trucks to its dealerships are down by 36.7% from last year. Regarding cars and crossovers, higher gasoline prices are changing consumer behavior, and rapidly, significantly affecting the U.S. auto industry sales mix. GM thinks this is not a spike or temporary shift, but is largely permanent. GM is also "undertaking a strategic review" of the Hummer
brand and could either revamp the product line or sell the brand. General Motors have cancelled a $2 billion investment program to update their range of full-size SUVs .
list is the struggling Ford's Lincoln-Mercury
brand, with a 3.5% drop to 83 from 86 in 2007. Ford Motor Company
, in general, saw a 20% increase in retail sales of its cars in 2008 May (compared to last year) and a 4% increase in car sales to its dealerships. Meanwhile, its SUV sales to dealerships were down 44% and its truck and van sales to dealerships were down 29% (note that both Ford and GM did not release retail sales information on their trucks and SUVs). Ford is top-heavy, with several big, gas-guzzling models that have put a damper on owner satisfaction. Ford announced in late 2008 July that it will bring its more fuel-efficient European models to the U.S., but the cars may not arrive in time to stem the company's slide in customer satisfaction.
told a news conference. "We intend to respond quickly and flexibly to this environment" . As part of those efforts, Toyota said it would move forward the launch of a "plug-in" version of its Prius
.
is facing continuous pressure from its rapidly decline sales of trucks, pick ups and minivans as consumers tend to buy more fuel-efficient vehicles given the soaring oil prices . Chrysler Chief Executive Bob Nardelli said the government loans would help speed the electric technology to market. But if they aren't approved, Chrysler will have to spend limited resources on developing new technology and would have to make cuts elsewhere, possibly in employment and development of conventional products. "Unfortunately we have had to furlough many families as a result of the economy turmoil and certainly the downward spiraling in the industry," he said. "I'd like to make sure that we don't have to go further to be able to support advanced technology work."
With gasoline at record prices, demand for some gas-electric hybrid vehicles is booming.
The average Toyota Prius
is getting sold just 13 days after hitting the showroom
floor, according to Power Information Network data sampled from dealership
s. A year ago, it took 24 days to sell a Prius. Prius sales dropped 38% in May compared to a year ago, but that was because Toyota dealers were running out of cars to sell. Dealers had just 3,832 unsold at the end of a month during which they sold more than 15,000 cars. (Those same Toyota dealers had more than 19,000 Sequoia sport utility vehicles gathering dust at the end of May, according to Autodata Corp., after selling just 3,575 of the U.S.-made big rig
s.)
Ford says its two hybrids — a version of the Escape SUV
and Mercury Mariner
— are selling well, and inventory levels are tight .
Car makers compete to demonstrate their pro-hybrid bona fides. The stampede toward hybrid technology reflects the much broader rush toward smaller, more fuel-efficient vehicles that has roiled the auto market as gasoline prices started in 2008 topping $4 a gallon.
s and pickups
have renewed calls for US regulators to consider more aggressive fuel efficiency
standards .
The European automotive market has always boasted smaller cars than the United States. With the high fuel prices and the world petroleum crisis, the United States may see its automotive market become more like the European market with fewer large vehicles on the road and more small cars.
For luxurious cars, with the current volatility in oil prices, going for smaller cars is not only smart, but also trendy. And because fashion is of high importance with the upper classes, the little green cars with luxury trimmings become quite plausible .
General Motors
Following this trend, General Motors Corporation announced on 2008-06-03 its plans to cease production at four GM truck assembly plants in North America while adding additional shifts at two assembly plants for cars. According GM, U.S. consumer preferences are shifting permanently away from trucks and sport utility vehicleSport utility vehicle
A sport utility vehicle is a generic marketing term for a vehicle similar to a station wagon, but built on a light-truck chassis. It is usually equipped with four-wheel drive for on- or off-road ability, and with some pretension or ability to be used as an off-road vehicle. Not all four-wheel...
s (SUVs) in favor of smaller cars and crossover vehicles. As a result, GM saw significant increases in the retail sales of its Chevrolet Malibu
Chevrolet Malibu
Malibus and all other Chevelles were completely restyled for 1968 with semi-fastback rooflines on two-door hardtops and wheelbases split to on two-door models and 118 for four-door sedans and station wagons. Engine offerings included a new V8 rated at that replaced the V8 that had served as the...
, Chevrolet Aveo
Chevrolet Aveo
The Chevrolet Aveo is a subcompact automobile manufactured since 2002, originally by the South Korean General Motors subsidiary, GM Daewoo—and later by other GM-affiliated entities...
, and Pontiac Vibe
Pontiac Vibe
The Pontiac Vibe is a compact hatchback car that was produced in Fremont, California, in the United States by NUMMI , a joint venture between General Motors and Toyota, and marketed under General Motors' Pontiac brand...
in 2008 May, while its May sales of trucks to its dealerships are down by 36.7% from last year. Regarding cars and crossovers, higher gasoline prices are changing consumer behavior, and rapidly, significantly affecting the U.S. auto industry sales mix. GM thinks this is not a spike or temporary shift, but is largely permanent. GM is also "undertaking a strategic review" of the Hummer
Hummer
Hummer was a brand of trucks and SUVs, first marketed in 1992 when AM General began selling a civilian version of the M998 Humvee. In 1998, General Motors purchased the brand name and marketed three vehicles: the original Hummer H1, based on the Humvee; and the H2 and H3 models that were...
brand and could either revamp the product line or sell the brand. General Motors have cancelled a $2 billion investment program to update their range of full-size SUVs .
Ford
Of course, GM's sales trends are not unique to the company; all the large automakers are seeing similar trends. For instance, the biggest loser on the American Customer Satisfaction IndexAmerican Customer Satisfaction Index
The American Customer Satisfaction Index is an economic indicator that measures the satisfaction of consumers across the U.S. economy. It is produced by the American Customer Satisfaction Index, a private company based in Ann Arbor, Michigan....
list is the struggling Ford's Lincoln-Mercury
Lincoln-Mercury
Lincoln–Mercury was a collective name for the Lincoln and Mercury divisions of the Ford Motor Company, whose vehicles were typically sold side-by-side in a single dealership....
brand, with a 3.5% drop to 83 from 86 in 2007. Ford Motor Company
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
, in general, saw a 20% increase in retail sales of its cars in 2008 May (compared to last year) and a 4% increase in car sales to its dealerships. Meanwhile, its SUV sales to dealerships were down 44% and its truck and van sales to dealerships were down 29% (note that both Ford and GM did not release retail sales information on their trucks and SUVs). Ford is top-heavy, with several big, gas-guzzling models that have put a damper on owner satisfaction. Ford announced in late 2008 July that it will bring its more fuel-efficient European models to the U.S., but the cars may not arrive in time to stem the company's slide in customer satisfaction.
Toyota
Toyota Motor also saw big sales gains for its Yaris, Corolla, and Scion xB, although Toyota's car sales overall were down by 21.3% in May, compared to last year. Toyota's light truck sales are down by 15.9%, while Toyota's Lexus division suffered sales drops nearly across the board. "We are looking at the current shift towards fuel-efficient cars (in the United States) as a structural change in demand," Toyota President Katsuaki WatanabeKatsuaki Watanabe
is vice chairman of Toyota Motor Corporation. He was president and CEO of the company before Akio Toyoda assumed those positions on June 23, 2009.Watanabe, who earned a degree in economics from Tokyo's Keio University, joined Toyota upon graduating from that university in 1964.He has gained...
told a news conference. "We intend to respond quickly and flexibly to this environment" . As part of those efforts, Toyota said it would move forward the launch of a "plug-in" version of its Prius
Toyota Prius
The Toyota Prius is a full hybrid electric mid-size hatchback, formerly a compact sedan developed and manufactured by the Toyota Motor Corporation...
.
Honda
Likewise, American Honda Motor Company experienced a 30.7% increase in car sales in May, compared to last year, while truck sales were down 11.4% and sales in its Acura division were down by 9.9%.Chrysler
ChryslerChrysler
Chrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
is facing continuous pressure from its rapidly decline sales of trucks, pick ups and minivans as consumers tend to buy more fuel-efficient vehicles given the soaring oil prices . Chrysler Chief Executive Bob Nardelli said the government loans would help speed the electric technology to market. But if they aren't approved, Chrysler will have to spend limited resources on developing new technology and would have to make cuts elsewhere, possibly in employment and development of conventional products. "Unfortunately we have had to furlough many families as a result of the economy turmoil and certainly the downward spiraling in the industry," he said. "I'd like to make sure that we don't have to go further to be able to support advanced technology work."
Hybrid vehicles
The average Toyota Prius
Toyota Prius
The Toyota Prius is a full hybrid electric mid-size hatchback, formerly a compact sedan developed and manufactured by the Toyota Motor Corporation...
is getting sold just 13 days after hitting the showroom
Showroom
The word showroom has two distinct meanings including:-Marketing location:A showroom is a large space used to display products for sale, such as automobiles, furniture, appliances, carpet or apparel. The World's most famous locations for a showroom are the Champs Elysees in Paris or the 5th Avenue...
floor, according to Power Information Network data sampled from dealership
Dealership
A dealership is an authorized seller and may refer to:*Car dealership*Franchised dealership...
s. A year ago, it took 24 days to sell a Prius. Prius sales dropped 38% in May compared to a year ago, but that was because Toyota dealers were running out of cars to sell. Dealers had just 3,832 unsold at the end of a month during which they sold more than 15,000 cars. (Those same Toyota dealers had more than 19,000 Sequoia sport utility vehicles gathering dust at the end of May, according to Autodata Corp., after selling just 3,575 of the U.S.-made big rig
Rig
Rig may refer to:* Rig, Something that a dog pulls when Mushing* Rig, a slang term referring to a tractor unit* Drilling rig, a structure housing equipment used to drill or extract oil from underground* Gaming rig, a PC built for high-performance gaming...
s.)
Ford says its two hybrids — a version of the Escape SUV
Ford Escape
The Ford Escape is a compact SUV sold by the automaker Ford Motor Company introduced in 2000 as a 2001 model year and priced below the Ford Explorer. Although technically it's a crossover vehicle, it is marketed by Ford as part of its traditional SUV lineup rather than its separate crossover lineup...
and Mercury Mariner
Mercury Mariner
The Mariner Hybrid powertrain is identical to its sibling, the Ford Escape Hybrid, and it was launched to the U.S. market in 2006.Like the Ford Escape Hybrid, the Mariner Hybrid is a "full" hybrid electric system, meaning the system can switch automatically between pure electric power, pure...
— are selling well, and inventory levels are tight .
Car makers compete to demonstrate their pro-hybrid bona fides. The stampede toward hybrid technology reflects the much broader rush toward smaller, more fuel-efficient vehicles that has roiled the auto market as gasoline prices started in 2008 topping $4 a gallon.
Fuel efficiency standards
A sharp rise in gasoline prices and a consumer stampede from sport utility vehicleSport utility vehicle
A sport utility vehicle is a generic marketing term for a vehicle similar to a station wagon, but built on a light-truck chassis. It is usually equipped with four-wheel drive for on- or off-road ability, and with some pretension or ability to be used as an off-road vehicle. Not all four-wheel...
s and pickups
Pickup truck
A pickup truck is a light motor vehicle with an open-top rear cargo area .-Definition:...
have renewed calls for US regulators to consider more aggressive fuel efficiency
Fuel efficiency
Fuel efficiency is a form of thermal efficiency, meaning the efficiency of a process that converts chemical potential energy contained in a carrier fuel into kinetic energy or work. Overall fuel efficiency may vary per device, which in turn may vary per application, and this spectrum of variance is...
standards .
See also
- American Customer Satisfaction IndexAmerican Customer Satisfaction IndexThe American Customer Satisfaction Index is an economic indicator that measures the satisfaction of consumers across the U.S. economy. It is produced by the American Customer Satisfaction Index, a private company based in Ann Arbor, Michigan....
(ACSI) - Automotive News Data Center
- Automotive industryAutomotive industryThe automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
- Corporate Average Fuel EconomyCorporate Average Fuel EconomyThe Corporate Average Fuel Economy are regulations in the United States, first enacted by the U.S. Congress in 1975, and intended to improve the average fuel economy of cars and light trucks sold in the US in the wake of the 1973 Arab Oil Embargo...
- Microhybrid
- MinicarMinicarMinicar or mini car may refer to:*City car, a European car classification*Kei car, a Japanese car classification*Obvio!, is a Brazilian car*The Mini, a popular British small car made from 1959 to 2000...
- Top 20 motor vehicle producing companies in 2009
Further reading
- Kay. Jane Holtz, Asphalt nation : how the automobile took over America, and how we can take it back, New York : Crown Publishers, 1997. ISBN 0517587025
External links
- GM Shifts Away from Trucks and SUVs, Toward Cars and Crossovers.
- Toyota Struggles to Meet Hybrid, Small Car Demand
- Small and hybrird cars sell, but GM, Ford suffer as gas prices rise: the Toyota PriusToyota PriusThe Toyota Prius is a full hybrid electric mid-size hatchback, formerly a compact sedan developed and manufactured by the Toyota Motor Corporation...
saw sales climb 66.6%. - Car Brands Americans Love
- Touring the floor, European push for smaller, cheaper cars apparent