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B Y
STRADAO C T O B E R 2 0 1 0
Canadian Sales Three Quarter Point 2010
TrendJuly – Up 6.3% MTM and 8.6% YTD
August – Up 0.5% MTM and 7.5% YTDSeptember – Up 4.3% MTM and 7.2% YTD
Sales continued at an acceptable rate, during
the 3rd quarter. Although August probably created
some concern.
While maintaining the anticipated downward trend which started in
the 2nd quarter.
Not surprising the trend follows a lack of economic vitality
spreading across North America.
LeasingA Canadian phenomenon, with dramatic impact on sales
results. The strong leasing penetration from previous years is enabling current sales.
The leasing landscape in the Canadian market.
2005 – 45%
2006 – 41%
2007 – 42%
2008 – 24%
2009 – 7%
On a 36 month cycle, some manufacturers are taking advantage of the 42% lease penetration
from 2007.
Advantage of LeasingSeveral manufacturers have greatly benefited from the
high lease penetration of previous years.
Ever wonder why some manufacturers are soaring in 2010?
They are capturing lease customers from
2007 with leases coming to term in 2010.
The strong lease penetration from
previous years facilitates capturing a lease customer (for the
manufacturers still offering leasing) when leases come to term.
Leasing PuzzleCrashing from 40% penetration to 7% in the space of 2 years. Its creating a chasm, and driving change in the
Canadian market.
Manufacturers /dealers/customers are
still enjoying the benefits of 40% lease penetration.
Starting next year, dealers will take an
increased number of trade ins, while dealing
with an empowered, and informed customer.
A new game, where the transaction process will
be increasingly challenging.
Is the industry ready?
Trends are on the Increase 2009 – Trade-in 28.2% Deficiency 16.9%2010 – Trade-in 29.1% Deficiency 18.9%
2011 /2012 – What do you think?
The trade-in pattern YTD August is increasing.
Accompanied by an increase in negative
equity (deficiency) in the values of vehicles being
traded.
The volume, and the deficiency is increasing.
The used vehicle value “risk” is inexorably
migrating towards the dealer.
Figures from J.D.Power PIN
Product Life CyclesEvery manufacturer is at a different stage in its product life
cycle for its various models. Applying corresponding tactics and strategies.
Current auto business is not more complex than it
was years ago.
Although technology enables a clearer vision of numerous variables.
From the diagram you can interpret 5
manufacturers at different stages of the
product life cycle. Within the same market
segment.
As the product ages, its easier to falter in the
market.
Musical Chairs of CompetitionIn a fiercely competitive, compressed market.
At the end of the month when the music stops! Whoever is left standing loses!
In a market that is increasingly compressed
downward from the previous month / quarter.
When one manufacturer gets aggressive, another
is left standing.
The last quarter will be a defining period for GM, Honda, Toyota to name
a few.
Compact Mid Size Sedans
Honda Civic……..42,796 Mazda 3………….39,503 Toyota Corolla…..29,929
Honda finally got competitive in the 3rd quarter, and decided that they were not
going to relinquish their lead in this segment.
Fascinating to see how the last quarter will develop.
Sales results from: Automotive News
Ford Fusion………..15,786 Hyundai Sonata…...11,250 Toyota Camry………10,538 Honda Accord………10,506 Nissan Altima……….10,411 Chevy Malibu……….10,399 Mazda 6………….…..4,661
The most popular is still the Fusion. The Sonata pulled into 2nd, is it competitive enough with everyone breathing down
on everyone else. While squeezing Mazda out of the action.
Some Numbers YTD September 2010
CUV/SUV Pick Ups
Ford Escape…………33,461 Hyundai Santa Fe…...21,350 Honda CR-V…………20,670 Toyota RAV4…………17,990 Chrysler Journey…….17,260 Chevy Equinox……….14,004
Hyundai passed Honda in the 3rd quarter. These vehicles “transcend winter” at a
reasonable price. They are very popular.
There are other offerings and competitors in this segment.
Ford F Series……………77,171 Ram………………………42,110 GMC Sierra………………34,065 Chevy Silverado…………31,321
Pick up sales continue their torrid pace. Ford, and Ram have gained the most in
this segment. Hopefully the majority of the sales are businesses that postponed purchases.
Do you really think so?
Some Numbers – 1YTD September 2010
Mercedes-Benz GLK Cadillac SRX
Customer Age…..56 Female Customer…..48.1%
Trade In ……48.4% % Negative Equity…..9.2%
Trade In Same Make….21.7% Cash………32.8% Finance….30.3% Lease……..36.8%
Vehicle Price….$48,637 Turn Rate………35 days
Figures from J.D.Power PIN
Customer Age…..56 Female Customer…..35.2%
Trade In ……27.1% % Negative Equity…..2.9%
Trade In Same Make….18.1% Cash………45.3% Finance….52.2% Lease……..2.5%
Vehicle Price….$50,764 Turn Rate………28 days
The Same Customer?Surprisingly similar profiles.
Entry Luxury Luxury CUV/SUV
BMW 3 Series………...10,268 M-B C Class………...…6,125 Audi A4…………………4,127 Infiniti G…………………3,366 Buick LaCrosse………...2,870 Cadillac CTS……………2,299 Acura TL…………………2,095 Lexus IS………………...1,728
Infiniti is the closest contender to the Germans, substantially ahead of the
other Japanese offerings.
Lexus RX………………..5,773 Acura MDX…………...…4,569 M-B GLK…………………4,482 Buick Enclave……….…..3,171 BMW X5……………….…2,952 M-B M Class………….….2,585 Audi Q5……………..……2,473 Acura RDX……….…..….2,407 BMW X3…………….……2,322 Cadillac SRX………..…...2,170
The vehicles are popular, with robust competition. Acura got aggressive!
Some Numbers – 2YTD September 2010
Pony Cars Did You Know?
Mustang…………….4,464 Camaro……………..3,708 Challenger………….2,782
Parnelli Jones is ahead of Mark Donahue, with Sam Posey trailing to continue the
Trans Am race analogy of 40 years ago.
SLS AMG……………….89 Lamborghini……………..55 Maserati………..……….117 Ferrari…………..………..78 Panamera……….….…..295 GT-R…………….…….…56 R8……………………….117 Bentley………….….…….52
Some Numbers – 3YTD September 2010
Fuel EconomyDoes the average Canadian care about fuel economy?
What do you think?
A massive oil spill in the Gulf of Mexico.
Ongoing Alberta oil sands environmental
controversy.
YTD September: passenger car sales are down 3.2% while truck sales (CUV/SUV/Pick
Up) are up 18.6%.
Transcending winter takes precedence over
fuel economy.
Agreed…at $1.50 a liter everyone will care!
Our Thoughts
We expected an active third quarter, with a slight downward trend especially after Labour Day and the return to “reality” after the “Dog Days of Summer”.
For the past 2 quarters the overriding strategy of most manufacturers has been to start strong, take a break in the middle month, and finish strong for the last month of the
quarter. Interesting to see Honda finally get a little aggressive to protect some of its market
positions. The sub compact segment will be “to watch” during the last quarter, with the Fiesta, and
Mazda 2 gaining momentum. Historical (rear view mirror) perspectives are diluted in relevance, a few years ago the
Koreans were not competing at the same level they are this year, and the future. The manufacturers that have not taken advantage of the “low hanging fruits” from lease
renewals will experience increased challenges. We anticipate the last quarter to show a more pronounced downward trend.
Thank You