31 July 2014

Diluting Exclusivity

Is Mercedes taking the wrong road with such models as the CLA?

Why do people buy premium marques? Because they represent value for money? No, because they not. Are they more reliable? Lexus and Jaguar are, but for most part they are not really any better than some mass market brands. The reason is they represent prestige, they are something to be aspired to. They let others know you are successful.

So why are the German premium marques pricing some of their models very close to everyday brands? As they fight to win a sales race for bragging rights to be the biggest premium car maker. In the short term, people who never thought of buying such cars with their upmarket image are finding them increasingly attainable.

In the longer term, the brand's status must be eroded. That affects the whole range too. If you buy an S-Class for example, you want it to be special. It isn't if models lower down the range are selling not far above Ford prices. The marque becomes simply a brand, as its aura is lost.

No, the fight to be the biggest in the premium segment will have casualties. The most significant will be the loss of prestige for those who venture too close in price and quality level to mass market cars.

New Nissan Qashqai Arrives In NZ

The Qashqai with some typical NZ scenery behind. 

Why is this important? Well, the vehicle in question is a popular type of model for this country. It also reflects a company that looks at the global picture in making decisions. The fact that a car made the other side of the world is sent here, when a not too dissimilar X-Trail already is available shows Nissan wants a sizable slice of the medium SUV market.

As for options, there is only one petrol version, a 2.0L with CVT auto. There is now a diesel for the first time, a 1.6L also mated to the CVT. The prices have all dropped NZD$2,000 for the petrol model. Seeing as most NZ cars are overpriced with our strong currency at the moment, that is good to see. As the Qashqai won't be continued in Japan in future, the used imports that pour in from there will dry up in due course.

So the Qashqai now represents an excellent car at a sharper price. Car sales are strong, especially for this segment. It will be a sales winner for certain.

Picture source and some more information: Autotalk.

28 July 2014

Car Production UK By Model : 2013

The 2014 Qashqai. In US parlance it's a home run

Car production in the UK flies under the radar for many even in it's home nation. With few local brand names to identify with, and most British too apathetic to bother finding out about it, many are unaware of it's success. That reality of that is shown in production figures, where exports account for about 80% of the total and penetration of locally made cars in the UK market is less than 13%! Nice for the German and other car makers who benefit from such ignorance.

The third generation is here!
Below is a list of production, with 5,000 being the cut off. The Range Rover and Range Rover Sport combined is an accurate figure, but I have allocated production to each model by calculated estimate based on sales. Figures are rounded for clarity to the nearest hundred.

1 Nissan Qashqai 286,500 New Model in 2014
2 BMW MINI 175,000 New Model in 2014
3 Nissan Juke 148,000 Refreshed model in 2014
4 Toyota Auris 142,600 Hybrid and Tourer hot
5 Land Rover Evoque 127,300 Popular as ever
6 GM Vaux Astra 73,500 New model in 2015
7 Honda CRV 72,000 Solid performer
8 Land Rover RR Sport 59,000 New model in demand
9 Nissan Note 58,900 New model selling well
10 Land Rover Freelander 57,600 Still selling well
11 Jaguar XF 47,300 Keeps on going strongly
12 Land Rover Range Rover 45,100 Very sought after
13 Land Rover Discovery 42,900 Has a loyal following
14 Honda Civic 41,800 New Tourer now selling
15 Toyota Avensis 36,700 Where to from here?
16 Honda Jazz 25,000 UK production to end?
17 Jaguar XJ 18,900 Production up in 2013
18 Bentley Continental 10,000 A record year
19 Jaguar F-Type 9,500 Not a full year. Hot!!
20 Nissan Leaf 8,400 Really taking off
21 Land Rover Defender 8,400 Don't stop making them!

Success stories: 

Nissan is a stand out of what a well run company can do. It has used it's UK operation to spearhead an effective approach to Europe. 

Jaguar and Land Rover also have been well run with a 'hands off' approach by Tata. Production is commencing in China and soon in Brazil for LR, but that should have little effect on UK production.

Bentley numbers are small, but they are really good. 2014 will be similar to 2013 in production volume. The SUV will take Bentley to the next level. 

For goodness sake, throw me the keys someone

Room for improvement: 

Toyota is doing well with the Auris (Corolla really) but the Avensis segment isn't going well. Another model is needed, but it seems it will take a new direction when it arrives. 

Honda have models that are unique to Europe in the Civic Hatch and Tourer. It needs to get them out into the world.

27 July 2014

TATA Production History By Segment

The Nexon looks fun and an ideal city car

Tata started making commercial vehicles in 1954, utility vehicles in 1991 and cars in 1998. It enjoyed strong growth in a booming vehicle market as can be seem by the green in the chart below, denoting increase in production over the previous year. However, as the domestic market faltered and competition increased, production has fallen away badly.

Ideally, Jaguar Land Rover sales have been offsetting the fall. One would assume that Tata cars will get better with some input from JLR. It makes sense for Tata Motors and JLR to work together, although the products are far apart in where they sit in the market.

The new Zest/Bolt goes on sale soon, and the Nexon compact SUV (pictured above & below) is expected to be available from early 2015. If Tata can get new models to have sufficient quality, then exports to mature markets would be an option. The Nexon looks good enough to succeed.

The figures below are from April to March, so for example 01 refers to Apr-Mar 01/02.



Car Utility LCV CV Total

01 64,726 27,488 30,924 59,463 182,601 01

02 81,821 25,493 37,672 78,473 223,459 02

03 118,217 33,348 55,927 104,054 311,546 03

04 154,226 37,501 78,214 136,761 406,702 04

05 169,689 40,378 107,380 136,111 453,558 05

06 195,782 50,074 151,499 185,091 582,446 06

07 182,212 49,715 167,988 175,383 575,298 07

08 148,103 38,530 170,105 116,120 472,858 08

09 155,161 34,112 228,294 141,352 558,919 09

10 247,672 38,203 266,089 185,591 737,555 10

11 265,525 56,187 366,688 225,878 914,278 11

12 183,200 47,858 411,639 147,137 789,834 12

13 107,865 30,614 295,057 122,535 556,071 13

Tot 2,074,199 509,501 2,367,476 1,813,949 6,765,125 Tot

Data source: Tata Motors.

Rear view of the 2015 Nexon

26 July 2014

Vehicle Production Turkey By Make : 2013

The Renault Fluence made in Turkey mainly for emerging markets

Turkish vehicle manufacturing went up in 2013, thanks to the car side of things. With lower wage costs, you would think that production will continue to improve. Oyak-Renault is by far the largest car maker with over half of all cars made from that company.

Utility vehicles didn't fare quite so well. Ford-Otosan (sounds Japanese) makes the Transit van and again has over half of total production in this sector.


Car



12 13
Share +/-

1 1 Renault 331,694 52.4% 7%

4 2 Toyota 102,260 16.1% 33%

2 3 Hyundai 102,020 16.1% 17%

3 4 Fiat 82,817 13.1% 2%

5 5 Honda 14,813 2.3% -32%



Total 633,604 9.8%

Utility



12 13
Share +/-

1 1 Ford 281,287 57.2% 3%

2 2 Fiat 161,797 32.9% -8%

3 3 Mercedes 22,395 4.6% 12%

4 4 Peugeot 12,486 2.5% -19%

5 5 Isuzu 4,907 1.0% 3%

6 6 Otokar 4,840 1.0% 70%

7 7 Mitsubishi 2,918 0.6% 24%

9 8 MAN 1,300 0.3% 15%



Total 491,930 -1%



Grand Total 1,125,534
4.9%

25 July 2014

JD Power APEAL Survey 2014

Dodge Dart was the most appealing Compact Car
The APEAL survey shows how happy people are with their car, scoring in 77 categories. I like this kind of insight more than reliability ones, which never seem to differentiate between minor and major faults. It also is about what a car company wants, happy customers who more likely to come back when they want to buy again.

The top 12 marques are all premium, which shows that if you buy a more expensive car, you will enjoy owning it more. I am surprised the Fiat 500 wasn't more enjoyed by its owners.

The average score was 794.


1 Porsche: 882 16 Buick: 792

2 Jaguar: 862 17 Chevrolet: 791

3 Audi: 858 18 GMC: 791

4 Land Rover: 853 19 Kia: 791

5 BMW: 849 20 Dodge: 790

6 Lexus: 844 21 Mazda: 790

7 Mercedes: 842 22 Ford: 789

8 Lincoln: 835 23 Nissan: 786

9 Cadillac: 826 24 Chrysler: 783

10 Infiniti: 826 25 Honda: 783

11 Acura: 814 26 Toyota: 783

12 Volvo: 812 27 Scion: 779

13 Hyundai: 804 28 Fiat: 786

14 Ram: 800 29 Subaru: 766

15 Volkswagen: 796 30 Jeep: 762

The most appealing Large Premium SUV in the survey

Brand Profits In Europe

This sort of car is getting sales up, but unit profit is down

I don't understand why car makers discount at the expense of profit. I know factories running below capacity is an issue, but in the end, discounting benefits no one. It is so much better to get costs down, especially with cost savings through co-operation with other car makers. So what are some car makers saying about their European profitability?

Volkswagen: It's profit is just below 3%, well short of Toyota's near 9%. It is wanting to get costs down. VW has been increasing it's market share in Europe in recent years and selling well in China. So why is it's European share so high, yet it now bemoans the lack of unit profit? Too many cars made in high wage Germany. Chasing sales at the expense of margins, or put another way, trying too hard to catch Toyota in unit sales. The cracks are showing.

Toyota: It is profitable in Europe and plans to avoid discounting to improve it's share. Internationally, Toyota is a very profitable car maker.

Ford: It has just announced it's first quarterly profit in three years. It is so low, let's call it break even. Still, that is a big move in the right direction. Ford's European market share has dropped a bit in that time, yet it has moved out of losses. Favourable currency movement has helped too.

GM: It's losses are up as Euro market share has improved. GM say one off costs associated with becoming more profitable are to blame for the increase in the wrong direction. GM remains bullish about getting back into the black in 2015 or 2016.

23 July 2014

Finland Top 4 Brands : 1960-69

The Escort was a runaway success for Ford Europe

There were some big movements of sales in the 60's in Finland. Only 23,500 cars were sold in 1960, which climbed to 99,900 in 1965. The fell back to 48,300 in 1968, before rebounding nearly 75% to 84,500 in '69. Moskvich started the decade on top, but was not able to quite maintain it although always comfortably in the top 10 during the decade.

I don't have a full list of brand sales for each year. Therefore a company like BLMC that had a few brands under it cannot be fully assessed. Austin and Morris brands were strong sellers during the 60's, but without the rest of the brands known, they have to be kept separate. As to whether BL ever got into the top 4 I cannot say, but they certainly would have at the very least gone close.

Toyota surprised me with how they able to reach this list so early. I believe the brand only started selling cars officially in Europe in 1963. Nissan (then Datsun) arrived a year earlier and were soon regularly at 6th in Finland in the latter part of the decade, but for that reason don't show here.

Sales below are in hundreds, 5.4 means 5,400. The extreme right column is the percentage the top 4 took.

Yr 1st Sales % 2nd Sales % 3rd Sales % 4th Sales % %
1960 Mosk 5.4 23 Skod 3.3 14 VW 1.7 7 Ford 1.4 6 50
1961 Mosk 5.5 20 Skod 3.7 13 VW 3.0 11 Ford 2.1 7 51
1962 Mosk 6.1 15 VW 5.0 12 Skod 4.7 12 Ford 4.1 10 49
1963 Ford 7.7 15 VW 7.6 15 Fiat 3.8 7 Simca 3.6 7 43
1964 Ford 13.1 16 VW 10.0 12 Fiat 7.0 8 Opel 4.9 6 43
1965 VW 17.3 17 Ford 14.4 14 Opel 8.1 8 Fiat 8.0 8 48
1966 VW 14.1 18 Ford 10.7 14 Opel 6.5 8 Fiat 6.5 8 48
1967 VW 12.2 19 Ford 9.6 15 Fiat 5.6 9 Mosk 4.2 6 48
1968 Ford 9.2 19 VW 6.7 14 Fiat 4.5 9 Toyo 3.4 7 49
1969 Ford 13.9 17 VW 10.3 12 Fiat 8.5 10 Toyo 7.5 9 48

Data source: Thanks to Autolan Tiedotuskeskus.
For other decades: 1956-59, 1970-79, 1980-89, 1990-99, and 2000-13.

A 1969 Corolla model

22 July 2014

Vehicle Production Canada By Make : 2013

Chrysler's Winsdor plant celebrates 30 years of the minivan in 2013
North American car production is rising, in Mexico and the USA that is. Not so north of the 49th parallel. The cost of making cars is high there, especially compared to Mexico. For that reason, Mexico is gaining more car plants, while Canada isn't. The US is also doing well attracting vehicle assembly investment.

It seems the best Canada can hope for is to retain what it has. The challenge for many higher wage car making countries is getting anyone to invest there. Car plants near the market they are selling in is a cost  advantage, but that can be more than negated by worker associated expense.


Car



12 13
Share +/-

1 1 GM 297,853 30.9% -6.8%

3 2 Chrysler 241,824 25.1% 1.4%

4 3 Honda 215,048 22.3% -5.0%

2 4 Toyota 207,570 21.5% -18.3%

5 5 Lancia 2,896 0.3% 61.2%



Total 965,191
-7.2

Utility



12 13
Share +/-

1 1 GM 328,694 13.8% -9.6%

2 2 Chrysler 326,877 13.7% -5.5%

3 3 Toyota 297,765 12.5% 12.3%

4 4 Ford 258,358 10.8% 1.0%

5 5 Honda 193,076 8.1% 5.2%

6 6 Paccar Truck? 9,845 0.4% 5.9%

7 7 VW Truck 7,829 0.3% -14.7%



Total 1,422,444
-0.7



Grand Total 2,387,635
-3.4