Since China is, and likely will remain, the largest car market on the planet – “By the Numbers” will now extend to our Sino neighbor.

In February, sales of cars, commercial vehicles, SUVs, trucks and buses topped 1.21 million in China, a 46.40% increase from last year.

Excluding commercial vehicles (buses and commercial grade trucks), China sold 942,900 vehicles to its citizens – that’s up 55% from last February. Passenger car sales are about 17% higher in China when compared to USA’s 780,265 units sold in the same month.

According to Waverly Advisors, while China’s sales are dramatically less than January’s (chart above) it’s still considered to be profound growth due to the nature of February in Chinese society. The Lunar New Year’s is the most important holiday for the Chinese. The two week long holiday reduce sales prospects by as much as 30-40% according to Waverly, and yet sales were up nearly 50% from last New Year’s.

The top three passenger car sellers in China remained Shanghai Volkswagen, Shanghai General Motors, and FAW-VW, according to morningpost.com.

For GM, sales of the new Chevy Cruze (13,515) and Chevy Spark (10,405) have been better than expected. Ford moved 4,857 of its new Fiesta and 59,362 of the vehicle since it was launched in the country. Chrysler sold a measly 1,234 vehicle in the country, but, then again, Chrysler only sold 10,405 vehicles outside North America.

While there were big winners in China, many automakers also suffered. Beijing Hyundai, Changan Ford Mazda, and Chery, suffered a 40%-plus month-on-month drop in sales volume. Dongfeng Kia and Changan Suzuki also fell by 25%.

Toyota's sales fell to 45,400 units in February from 72,000 in January, according to the Associated Press. Toyota has announced a 0% financing scheme similar to the one announced in the US. Toyota is also offering gas coupons worth $13 USD and $140 USD discounts on car insurance to win over buyers. Toyota is suffering from recall hangover in China, the same as in the US.

According to Waverly, Beijing has hinted that it will continue to support the auto industry through distortionary market incentives. China’s Ministry of Industry continues to place pressure on the market to create 500,000 green vehicles by 2013.

Source: Associated Press

Graph Source: Waverly Advisors

 

This week’s theme on the AutoBird Podcast is the “Cult of Toyota.” We talk about those diehard Toyota fans and what Toyota is trying to do to keep them loyal and mobilized for use on Twitter and Facebook.

Along with Joel Feder, we have a very special guest joining in on the conversation, Michelle Naranjo. Michelle is a big deal on Twitter, she’s also the founder of MissMotorMouth.com and a regular on the RoundAbout podcast.

This Week in Car News:

• Hyundai removes Jeff Bridges voiceovers from Oscars ads [link], [video]
• Ford number one brand/automaker in America for Feb. [link]

Tweet Meme:

Joel and Michelle go over the Twitter reaction towards Lutz’s announced retirement from GM.

Talking Points

We chat about some of the production/ concept vehicles of the 2010 Geneva Auto Show:

• Opel Flextreme GT/E [link]
• Mitsubishi ASX [link]
• Lexus CT 200h [link]

The Cult of Toyota [link]

We discuss Toyota's aggressive push into social media, largely focused on abating the negative criticism bubbling around the recall situation. We discuss whether or not Toyota’s attempted cult of personality has had, or will have, any effect on its public image.

Listen, Comment and Enjoy!

For additional information visit AutoBird, Accelerate Minneapolis and MissMotorMouth.com

Images By: Andrew Walensa

Download this episode

 

I decided to give Toyota a little break and post some of the positive news that’s coming out of the beleaguered automaker. Despite all the negative press, Toyota seems to be persevering, and might even have an unexpected sales rally in March. Here are some reasons why.

Advertising:

According to the Associated Press, Toyota has initiated a new TV ad campaign that pushes the idea that Toyota customers remain loyal. This campaign comes after the automaker’s $1 billion ad push in Q4 2009. There is very little mention of recalls in the new TV spots, as the company is trying to redirect the corporate message towards the company’s stronger points, namely relatively good customer service, resale value and safety, recalls excluded of course.

The campaign started on March 2, and will go through until April 5. One example given by the AP is an ad featuring a baby boomer couple who just bought two brand new Toyotas in February, during the heat of the recalls. Mark Murphy, the buyer of the vehicles, says “These cars that we've had have been exceptionally safe." Of course he’s only owned them for a few weeks, but so far so good.

Other commercials feature Toyota dealership employees thanking customers for their support and loyalty (example above).

Marketing analysts are giving Toyota props for the direction of the ads. Troubled brands need to focus on their strengths to reestablish corporate identity, and, in my opinion, dwelling on the company’s deficiencies on television can only damage perceptions further at this point.

Incentives:

Many automotive analysts believe that a part of the tepid industry-wide sales performance in February was due to Toyota buyers sitting on the sidelines, waiting for Toyota’s huge incentive push.

It’s probably a good thing they waited, because these incentives are in unprecedented, Domestic-like territory for Toyota. The automaker claims this is their first far-reaching sales program in its history.

Starting at the same time that the ad campaign began, and ending on April 5^th, the program includes financing, leasing and customer loyalty offers. Toyota is offering

• 0% APR financing for up to 60 months on the models affected by the pedal recall. Also included was the Yaris, unaffected by the recalls but experiencing poor sales nonetheless,
• Very low lease rates on said vehicles, but also on the Venza,
• Complimentary two-year premium maintenance program for new buyers. Items in this package include 24-hour roadside assistance, oil changes, fluid inspection checks, etc.

Since the announcement of the incentive, Edmunds has seen a dramatic 40% increase in purchase intent on Toyotas on their website.

Hybrids:

Toyota also remains, by a wide margin, the largest producer of hybrids in the United States. Even with Toyota’s sacred cow—the Prius—entangled in recall hell, Toyota’s hybrids sales have continued to improve. For the month of February, Prius sales were up 10.2%, and overall Prius sales are up 11.6% for the year. Toyota has sold a total of 23,147 hybrids since the beginning of 2010. While that’s a 2.5% drop from last year, it’s better than Toyota’s overall yearly sales performance of -8.7%.

Last week at the Geneva Auto Show, Toyota unveiled a new dedicated hybrid model that should further advance the automaker’s goal of doubling its hybrid lineup by the end of 2010, and offering a full hybrid lineup by 2020.

The Lexus CT 200h is a production intent vehicle, which will make it to American shores sometime in early 2011.

The CT 200h is a small, dedicated hybrid hatch. It features the Prius powertrain, which is a 1.8-liter inline-four gasoline engine mated with a 650V electric motor. For a Lexus, this is sort of an earth-shattering development. The Lexus HS 250h was given a bigger 2.4-liter four-cylinder, which increased performance but damaged gas mileage (35 mpg combined vs. 50 mpg on the Prius). The new Lexus hybrid has a smaller wheelbase than the HS 250h and Prius, which means that it may have less interior volume and a lighter curb weight. This makes me believe that the CT 200h will have similar gas mileage to the current Prius.

From a marketing perspective, the mantra has always been that luxury buyers will not compromise on performance. Given the lukewarm reception of the HS 250h, maybe the CT 200h is Toyota’s attempt to test this belief?

Also expected is a Sienna hybrid, a compact Toyota branded dedicated hybrid, and a plug-in Prius hybrid within a 12-18 month time frame.

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Once again, I was invited onto the illustrious RoundAbout podcast. This week’s theme is “Less is More.” Throughout the episode we talk about the Geneva Auto Show and the worst concepts that were unveiled at the event:

• Aston Martin Cygnet
• Mansory Rolls-Royce
• Hispano Suiza
• Hyundai iFlow
• Bufori Geneva
• Sbarro Autobau

For the Blind Spot of the week we discuss an innovative way to spot potholes. Zach Bowman talks about his time with the Cadillac CTS Sportwagon. We wrap up with a Stupid Car Trick: it’s a small boy and his $40,000 Chevrolet Camaro SS that his daddy bought him.

This week’s group includes Zach Bowman, Dalibor Dimovski, Eric Trytko, Craig Cole (host) and Ben Sanders (producer).

Listen, Comment and Enjoy

For more information visit RoundAboutShow.com  
Download MP3 | | |

02.28.2010

• Ford can’t get labor savings [link]

03.01.2010

• Two Toyotas earn IIHS Top Safety Pick [link]
• Jeff Bridges voice-overs removed from Hyundai's Oscars blitz [link]

03.02.2010

• February car sales up 13.3%: Ford number 1! [link]
• Geneva Motor Show wrap-up [link]
• GM's Reuss takes bigger role in sales [link]
• GM recalls 1.3 million compact cars [link]
• Toyota hopes 0% financing will lure customers [link]
• Poll says 31 percent of Americans believe Toyotas unsafe [link]
• U.S. considers brake override system [link]
• Daimler, BYD to develop electric vehicles jointly in China [link]
• NHTSA has only five electrical, one software engineer [link]

03.03.2010

• 2011 Ford Mustang V-6 to get 31 MPG [link]
• GM names new VP of communications [link]
• Toyoda got it right in China [link]
• NUMMI's pension plan being taken over by U.S. guaranty fund [link]

03.04.2010

• Chrysler promotes two execs [link]
• Auto veteran Bob Lutz to retire from GM [link]
• Global car sales weakened last month [link]

03.05.2010

• GM to give 600 dealers another chance to sell its cars [link]
• GM to pay Vice Chairman Girsky $5 million [link]
• Toyota owners file 60 complaints after recall fixes [link]

Clip of the Week:

Note: Apparently one of the gymnast severely hurt their ankle during the production of this ad. 

Over the past few months, the Movers and Shakers list has proven to be quite lively. The long held assumption that General Motors is always number one in America and that Toyota is a close two was completely thrown at the window in February as Ford handedly surpassed both.

In February, the auto industry managed to move 780,265 vehicles or a 13.3% rise from last February’s miserable sales performance. This is also up 81,365 vehicles from January.

Most analysts agree that the sales improvement could have been better if it were not for a shortage of the hottest selling models, the snowstorms that halted most commerce in the Mid-Atlantic and Midwest and, of course, the Toyota recalls.

According to Automotive News, at a seasonally adjusted annual sales rate (SAAR) the industry is moving 10.36 million vehicles, well above 9.1 million SAAR from last year.

Still the picture isn’t that great. The double digit spike in sales was almost totally accomplished by fleet sales. Overall, retail sales for the month were only 1% higher than the miserable lows of Feb. 2009. A little under 200,000 vehicles sold to fleet for the month.

Ford: Ford’s continuously improving sales performance and the overall good will for the automaker has catapulted the company into first place.

This is the first time Ford has been number one in America, a position long held by General Motors, since a strike in 1998 crippled GM. Ford also experienced the number one sales position in 1970 during another big GM strike. Once you exclude Volvo (a brand that Ford is in the process of selling off to China's Geely), Ford actually sold 4,073 fewer vehicles than GM.

Ford sold 142,285 vehicles, a 43.1% increase. Of those sales, about 55,000 were fleet – a 74% increase over last year. More Ford’s went to government, commercial and rental fleets than any other car company operating in America.

Ford sales mix improved slightly from January: 61% truck vs. 39% car sales. As gas prices continue to climb, this type of sales mix could tip the balance back in Toyota’s favor if the company can ever recover from its recall scandal.

Big nameplate winners for the month include Ford Fusion (+116.5%), Mercury Milan (+99.6 %), Ford Taurus (+93.3%), Ford Mustang (+71.1%), Ford Edge (+66.7%) and Ford F-Series (+39.3%).

Ford’s triumph over General Motors was partially due to a healthy inventory of its most popular models; GM has been unable to keep its popular models in stock. Ford was also one of the greatest beneficiaries of Toyota’s recent woes. According to Truecar.com, Ford gained a quarter of Toyota’s lost new car buyers.

Ford ended the month with a 18.2% market share, an increase of 3.8% in market share from Feb. 2009.

General Motors: The reality of having only four brands is beginning to sink in at General Motors. The automaker had 141,438 delivers, which was a 12.7% increase over Feb. 09.

Ford ever so slightly edged out General Motors as the number one automaker. Being number one is a position GM has held onto every month for the past 12 years. On a yearly basis, GM remains the bestselling car company since 1931.

It was long believed that GM would eventually be usurped in its home market by none other than Toyota. Up until the middle of last year, nobody would have expected Ford.

In every vehicle segment General Motors posted positive sales gains. GM’s truck vs. car sales stood at 58% to 42%, which was basically the same vehicle mix GM has had for the past two years.

Big nameplate winners for the month included the Cadillac SRX (+541.7%), Buick Lacrosse (+163.3%), Chevrolet Equinox (+132.8 %), Chevrolet HHR (+82.2%) and Chevrolet Cobalt (+69.5%).

GM sold 32 percent of its vehicles to fleets, which places the company in the upper echelon of fleet sellers. Still, the company sells relatively less to fleet than either Ford or Chrysler.

According to The Wall Street Journal, shortages of GM’s newly launched vehicles, such as the Chevy Equinox and GMC Terrain, limited potential sales in February. This has led to complaints by senior executives and some big GM dealerships that conservative forecasting caused the company to fall behind Ford.

GM’s sold 3,102 of its non-core brand vehicles (Saab, Saturn, Hummer, and Pontiac) or about the same amount of vehicles Ford will lose when the Volvo sale finally goes through.

GM market share stood at 18.1%, down by 0.1% from Feb. 2009.

Toyota: Despite one of the worst monthly sales performances this decade, Toyota tried to stay positive about the situation. Toyota group vice president Bob Carter said he was "surprised that we sold as many cars as we did." The decline was indeed less than most analysts had been predicting.

Toyota sold 100,027 vehicles in Feb, a -8.7% decrease from Feb. 09. All of Toyota’s recalled models posted negative numbers: Camry (-19.8 %), Corolla/ Matrix (-6.1%), Avalon (-65.1 %), Highlander (-27.8 %), Sequoia (-55.1 %), Tundra (-4.5 %) and RAV4 (-19.0%).

Toyota’s February sales numbers and market share should be considered an anomaly as the cessation of sales in late January dragged into the early part of February. March will be the first true test as to the lasting impact of the recalls. Toyota increased imports and domestic production for many of the vehicles affected by the recalls in February, which leads me to believe there will be a pretty hard sales push in March.

Despite the recalls, there were also potential Toyota customers who stayed out of dealerships because of the major incentive offensive the car company was planning.

Yesterday, Toyota announced zero percent financing for up to 60 months on 2010 Avalon, Camry, Corolla, Highlander, Matrix, RAV4, Tundra and Yaris, for qualifying buyers. There are also attractive lease offerings and free maintenance programs for loyal Toyota buyers.

Toyota ended the month with a 12.8% share, a 2.9% market share decrease from Feb. 2009.

Chrysler: Chrysler had a rare rally for the month of February – regaining its fourth place sales position from Honda. Chrysler sold 84,449 vehicles in February (up 0.5%).

That small sales increase is very important, because it ends Chrysler’s 25 month sales decline.

But the good news sadly stops there. Chrysler's small victory was due to massive incentive spending and fleet sales.

According to Automotive News, Chrysler sold 35,000 vehicles to fleets. Fleet accounted for nearly 60% of all of Chrysler’s sales, an astoundingly unhealthy mix. When you subtract fleet sales, Chrysler is decidedly the smallest of the Movers and Shakers.

While Chrysler slashed $2,220 off of incentive spending, according to Edmunds, it still remains one of the largest incentive spenders, behind General Motors.

Big nameplate winners for the automaker include the Chrysler Sebring (+118%), Jeep Compass (+107%), Dodge Avenger (+78%), Chrysler 300 (+62%) and Dodge Charger (+55%). Chrysler, Dodge and Jeep all posted positive sales gains for the month. The newly created Ram brand was down 31%. Chrysler had 3 vehicles on the top 20 nameplate list for February, an improvement from just the Ram in January. Interestingly, the Dodge Charger is now Chrysler’s best seller, not the perennially best selling Dodge Ram.

Chrysler’s market share stood at 10.8% - a 1.4% market share decrease from last year, same month.

Honda: Honda sales were up 12.7% from Feb. 2009. While 80,671 vehicles sold is a healthy performance from the car maker, it wasn’t enough to keep its fourth place position in the market.

The top three Honda models in sales for February were the Honda Accord (22,456 units), Honda Civic (16,471) and Honda CR-V (11,828). These three vehicles account for 63% of all of Honda’s sales.

The Honda Civic, Honda Accord, Honda FCX Clarity, Honda Odyssey, Acura MDX and Acura RDX all posted positive sales numbers for the month.

The Honda Accord remains the best selling family sedan for the second month in a row – it was also the second best selling vehicle in America after the Ford F-Series.

Honda ended the month with a 10.3% market share, which is about even with last year’s market share.

Nissan: Nissan moved 70,189 vehicles last month; a 29.4% increase from last year. Nissan managed a market share of 9.0%, which is a 1.1% market share improvement from Feb. 2009.

Some of Nissan’s sales position has to do with its incentive spending. Nissan is the largest spender out of all the Japanese automakers; it also increased spending by $178 from January – to $2,602 per vehicle sold, according to Edmunds.

Nissan’s clear sales leader was the Nissan Altima, the third best selling family sedan in America. Nissan moved 11,609 Versas too; making it the carmaker’s second best selling vehicle, and the best selling subcompact in the country.

Nameplate winners include the Nissan Versa (+130.1%), Nissan Maxima (+89.5%), Nissan Frontier (+56.5%) and Nissan Armada (+101.2 %).

Infiniti moved 7,041 units, up 10.7% from the same month last year.

Hyundai/ Kia: Hyundai, and its subsidiary Kia, had another good month. Hyundai Group moved 58,056 vehicles, up 9.2% from Feb. 2009. Hyundai’s market share basically remained stable as compared to last year.

Kia again experienced poor truck sales, which are dragging the brand down. The Kia Sportage (-61%), Kia Sedona (-84%) and Kia Rondo (-65%) had terrible showings. Though, with 8,207 new Sorentos sold, Kia’s new crossover is the best selling vehicle in the Hyundai/Kia group.

Over at the Hyundai brand, the Accent (+18%), Santa Fe (+34%) and new 2011 Tuscon (+50%) showed growth.

The new 2011 Sonata sales were much improved, at 7,964 units (+34%), keep in mind that some of that is mixed in with the 2010 MY. The Hyundai Sonata is the groups’ second best selling vehicle and is sure to regain a position as a top 20 nameplate once the automaker gains a sufficient amount of inventory at dealerships.

Hyundai is spending $160 million on the Sonata and $80 million on the Tucson in advertising.

***Source: Sales data provided by the OEM. Market share/ vehicle segment analysis provided by www.motorintelligence.com via The Wall Street Journal ***

In this week’s episode we have a very special guest, Erich Merkel, founder of Autoconomy.com. Erich joins us for our editorial talking points in the second half of the show.

Joel’s’ Garage:

For some reason Chrysler gave Joel a 2010 Ram 2500 heavy-duty diesel with a long-box bed. Joel talks about how hard the behemoth is to park, but how easily it can crush an Aveo.

This Week in Car News:

• Cadillac ditches “Life. Liberty. And the Pursuit” and starts a new campaign called “Luxury World” [link]
• Hyundai recalls the 2011 Sonata because of a door glitch [link]

Clip of the Week:

With more than 77 million dogs in 45 million households, Subaru has decided to focus solely on the dog in its new ad campaign. The campaign was created by Carmichael Lynch and the series is called "Dog tested. Dog approved."

 

Tweet Meme:

This is a new segment where Joel goes over the latest action on Twitter. This week we go over Hummer and how the twitter reaction was generally negative, until it was pointed out that some people in our twitter community would be losing their jobs over the death of Hummer.

Talking Points:

For our editorial talking points, seasoned automotive expert, Erich Merkel, joins us from Autoconomy.com. In this segment we talk about:

• Akio Toyoda’s trip to Washington
• Toyota’s expected market share for 2010
• Toyota’s lack of exciting product
• Jim Press
• The Hummer situation
• New York Auto Show: some of the product we expect to see
• The domestic car industry’s reentry into the subcompact category
• Likelihood that Chrysler will still be selling cars by 2015

Listen, Comment and Enjoy!

For additional information visit AutoBird Blog, Accelerate Minneapolis and Autoconomy.com

Download this episode

2009 was one of the most difficult years in automotive history and this year’s Fortune Global 500 rankings help to prove the case. The 16 largest automakers, who publicly report their earnings, generated more than $1.48 trillion worth of revenue. Without adjusting for currency fluctuations, the automotive industry contracted total revenue by about 3%, or approximately $45 billion, from last year’s Fortune rankings. Out of the 34 ranked industries, motor vehicles and parts ranked as the poorest performer within the Global 500.

All but three automaker’s lost rank on the Global 500 chart, most car companies saw double digit falls (chart above).

Total aggregate net income stood at a whopping -$37.4 billion loss. The number is slightly deceptive, as 9 out of the 16 automakers actually reported a net profit. Big losers like General Motors, Ford and Toyota sagged down profits and revenue.

By simply removing the North American automakers from the reporting, the rest of the industry actually raked in $8.1 billion in profits.

General Motors is the largest outlier of the North American rankings. GM’s total revenue contracted $33.4 billion and the company slid 9 places on the Global 500 list. It is the first time in recent memory that GM wasn’t one of the top 10 largest companies in the world, based off revenue. New “GM” declared a $1 billion operating loss for July 10-Sept. 30 2009. GM hasn’t posted any new financial results since November and isn’t required to since new GM isn’t publicly traded. The company also lost its spot on the Dow 30; it was replaced with Cisco Systems.

Ford has also lost tremendously; revenue contracted $26.2 billion and the automaker fell 6 places on the list. The last big American car company, Chrysler, doesn’t publicly report its financials and isn’t included on Fortune’s chart.

As a region, Asia was the second worst performing on Fortune’s list. Toyota, Nissan, Mitsubishi and Mazda reported negative income and all Asian automaker’s lost rank on the Global 500. Mitsubishi fell 120 positions, while Mazda fell 97 positions. Collectively, the two Japanese automakers saw revenue contract $9 billion. Toyota barely held on as one of the top 10 companies in the world, a list now dominated by oil companies and Wal-Mart. Toyota fell from 5^th place to 10^th, with revenue contracting $25 billion. Subaru is a part of Fuji Heavy Industries and wasn’t included in Fortune’s rankings.

In Europe, Volkswagen actually climbed places, a rare feat for a car company in today’s environment. Volkswagen grew revenue by $17.5 billion and increased its rank from 18^th place to 14^th. Volkswagen also surpassed GM in becoming the second largest car company based off revenue. Volkswagen is now the largest car company when it comes to profits: totaling nearly $7 billion. Fiat and Volvo also saw healthy growth, the only other car companies to increase in rank.

Source: Fortune Global 500