Detroit Bureau on Twitter

Posts Tagged ‘car buying’

Are American Drivers Immune to Fuel Price Hikes?

Buyers are changing driving patterns rather than shifting vehicle choices.

by on Aug.09, 2011

Buyers continue to go for pickups and SUVs - albeit with high-tech engines that can deliver better mileage.

When gas prices first hit $2.50 a gallon, auto industry planners braced for a dramatic shift in the market.  It didn’t happen.  When the pump price first nudged $4, back in the summer of 2008, environmentalists rejoiced, betting that hybrids would replace pickups and SUVs as the vehicles of choice.  Yet after a month or so, most U.S. motorists went right back to the cars and trucks they long preferred.

This year’s run-up in fuel costs has once again led many to anticipate a wholesale shift in demand and indeed, sales of small cars have been gaining ground – but pickups, SUVs, crossovers and muscle cars haven’t exactly vanished from the sales charts – a new study by AutoPacific, Inc. suggesting that despite wishful thinking, Americans have largely grown immune to high fuel prices.

Stay Informed!

The consulting firm’s latest Fuel Price Impact Survey concludes that while, “American drivers complain about near historically high fuel prices…few are doing much about it. In fact, choice of what vehicle to buy in the future appears to have decoupled from the price of fuel.”

(more…)

Gen-X Buyers Opt for “Family-Friendly” Vehicles

European imports lead the list.

by on Jul.13, 2011

European models top the list - even if the number offering, the VW Routan is actually a rebadged version of the Detroit-made Chrysler minivan.

That sometimes forgotten generation of post-Baby Boomers, Gen-X has moved from the grunge and rock-and-roll life phase to raising families of their own – which may explain why “family-friendly” is the key word in describing the sort of vehicles that wind up most on their shopping list, according to a new study.

As they become increasingly affluent, this relatively small group of the population – born between the mid-1960s and early ‘80s – have developed a clear taste for the roomy, well-equipped vehicles they can use to haul kids and grandkids, as well as the other accoutrements of an established life, finds TrueCar.com’s analysis of Gen-X buying data.

Subscribe Now!

Significantly, there are signs that the old maxim that each generation moves away from the cars their parents drove is at least partially true.  Among the Top 5 models on the Gen-X list is only one Japanese brand, fourth-ranked Mazda.  The most popular brands, in order, are Volkswagen, Land Rover and Audi.  Rounding out the group is the only domestic model, Jeep.

(more…)

Detroit Makers Still Struggling to Win Young Buyers

But there are some surprises among the brands Millennials want most.

by on Jul.07, 2011

Scion's tC is the most popular model with Millennials.

Conventional wisdom suggests that young buyers will turn away from the products their parents drove – potentially good news for Detroit’s Big Three who collectively lost the big Baby Boom generation to the imports.

New models, such as the Ford Fiesta, are specifically targeting Generation-Y, and the success of those products could determine whether Detroit reverses decades of market share losses, particularly in trendy coastal regions, such as California, where domestic brands account for barely one in four current car sales.  (Click Here to find out which are the most “patriotic” automotive markets.)

The Inside Story!

Unfortunately for the Motor City, a new study suggests that while Gen-Y might be turning away from some traditionally strong Japanese marques, like Toyota and Honda, those young buyers are continuing to focus on Asian, rather than American, automakers.

(more…)

A McBlog Sidebar

The worst of time (can be) the best of times.

by on May.16, 2011

Storm clouds on the horizon? Buying some cars, like the Prius, can be a challenge right now.

Buying a car, these days, can test the patience of Job, columnist Denise McCluggage noted in her latest McBlog, yet the worst of times can turn into the best of times…with a little help. Here’s a sidebar to her column.

Fred Vang is a personal consultant to car shoppers. He lives in Santa Fe NM but his clients come from anywhere. He helps them gel their amorphous thoughts about acquiring a new car into something he can actually search for. He negotiates the deal, he handles the documentation and registration and arranges all the delivery details. In short he drains the tension out of acquiring a new vehicle and enhances the pleasures.

Auto Show Updates!

In the current market that’s hard to do but his long-held connections still leave the door ajar.

Fred sees a bright spot even in a market with new models in limited supply and used cars tagged with extremely high prices. “The worst of times can be the best of times for a few,” he says. And those few are people just coming off a lease.

(more…)

Leasing Making a Big Comeback

May soon account for 43% of luxury market again.

by on Mar.04, 2011

Good news for Land Rover as it launches - and leases - the new Range Rover Evoque.

In the “bubble years,” prior to the economic meltdown, leasing had become the option of choice for millions of American motorists, accounting for a majority of the business for some luxury brands.  After all but vanishing during the downturn, leasing is now poised to make a major comeback, suggests the Automotive Leasing Guide.

Also known as ALG, and a principle benchmark for residual values and depreciation data, the publication predicts a significant resurgence in the automobile leasing market that will continue right on through 2015.

News You Can Use!

The luxury segment will lead the way with lease penetration rates rising to nearly 43% by 2012, while lease penetration in the mainstream market will increase to 17.5% over the next two years, according to the new estimates prepared by ALG.

Numerous brands are expected to capitalize on this leasing resurgence, based on the ALG 2011 March/April edition and current high residual values forecasts, which allows them to offer highly competitive monthly lease payments.

(more…)

World Car of the Year Finalists Announced

Europeans dominate, though Leaf, Grand Cherokee make the cut.

by on Feb.07, 2011

The 2011 Jeep Grand Cherokee is the only U.S. model among the 10 World Car of the Year finalists.

European automakers overwhelmed their North American and Asian competition, placing eight of the 10 products to make the cut as finalists in the World Car of the Year balloting.

Audi, with the new A1 and A8 models, and BMW, with the redesigned X3 and 5-Series, have the strongest presence on the list, which also includes, among Europeans:

  • Jaguar XJ;
  • Mercedes-Benz SLS;
  • Porsche Cayenne; and
  • Volvo S60/V60.

In an unexpected slight, only Nissan, with the all-new battery-electric Leaf, and Jeep, and the newly redesigned Grand Cherokee, managed to find a spot alongside the Continental offerings.

Notably absent were the Chevrolet Volt plug-in hybrid, which has won an armful of awards, including North American Car of the Year, and the Ford Explorer, named last month North American Truck of the Year.  Leaf came in just behind Volt in the North American balloting, while Grand Cherokee lost out to the Explorer.

(more…)

BMW Program Aims To Raise Owner Loyalty Rate

German maker targeting increased leasing, but sees a decline in incentives.

by on Sep.24, 2010

BMW wants you to trade in early.

BMW is betting on a new, high-tech marketing system to build both sales and owner loyalty rates.

The new program is designed to increase contact between the company and its customers – and to convince them to trade in their current BMW products sooner and more often, explains Shaun Bugbee, vice president of sales and marketing for the German maker’s American captive finance subsidiary.

Currently, about 55% of the customers who borrow money through BMW Financial pay off their loans ahead of schedule – typically at around 33 months on a 60-month contract, notes Bugbee.  A key reason is that BMW has, for the last several years, been offering heavily subvented, or subsidized, loans, often with interest rates of just 0.9% or 1.9%.  That makes it easy to pay down equity in a hurry.

http://www.thedetroitbureau.com/about/subscribe

News, Reviews and More!

But the automaker has come to realize that when customers pay off their loans early they are more likely to trade in—often on a competing brand.  Retail owner loyalty rates, Bugbee says, have been running just 20%.  But a pilot program tested in BMW 12 dealerships has bumped that by as much as 12 percentage points.  So, it is now being rolled out nationwide.

(more…)

Yoostabe: Auto Accessories of Yore

When even mirrors were options...

by on Sep.04, 2009

Fog lamps, mirrors, radios, defrosters, Yoostabe a time when just about everything was optional.

Fog lamps, mirrors, radios, defrosters, Yoostabe a time when just about everything was optional.

Today’s cars come so well equipped, and factory-priced accordingly, that the auto accessory market has dwindled hugely compared to what it Yoostabee (used to be).

So today, Yoostabee, my alter ego, is going to turn back the calendar, a few decades, to the 1940s, and tell you how car nuts “used to” tailor their wheels for their needs and egos.

Indeed, in the sellers’ market right after World War II, new car buyers were compelled by new-car dealers, many of whom barely managed to stay afloat during the war years and now were playing catch-up, to accept expensive accessories on top of the full “list” price they paid for much sought after new cars.  Veterans returned from the war with cash in their pockets for a new car.  Prices of used cars were inflated.  There was pent-up demand from essentially four years of no new cars or trucks.

Make it a Standard Feature!

Make it a Standard Feature!

Some of the most common accessories mounted on new cars of the times—and buyers had to accept them if they wanted those new wheels—were fog lamps (twin, yellow, front bumper-mounted), sunshades mounted to the A-pillars and shading the two-piece windshields of the time, and straw-and-fabric seat covers to go over the factory mohair upholstery.  The last were fairly practical because, by protecting the original trim, they enhanced the value of the car when it was eventually sold or traded in.

(more…)

Marty’s Marketing Minutia

Customers, Characters, Commerce and Concours

by on Aug.14, 2009

A Tale of Two Car Buyers: Some Things Never Change!

Auto writers, journalists, commentators and pundits are often subjected to inquisitions from relatives, friends, neighbors and colleagues outside the automotive world:

Questions include: What do you like best? What should I buy? What would you buy? Why that? How much should I pay? It’s not a clunker now what? Is it really safe? But it’s so ugly – looks like a bread box.”

And the “cash for clunkers” program, the economy and a shortage of ‘desirable’ cars have exacerbated the questions.

But what happens when it’s your wife who is thinking about buying a new car? Especially when she has always done shopping on her own, cut her deals, paid for it with her money, favors a specific brand, likes a specific style, thinks the entire process is a nasty game and the buyer never wins, most salespeople are either disinterested or too pushy, the entire process is fraught with a lack of full disclosure and it contributes to a daily “CBH” – car buying headache.

What if it’s the new wife of one of my oldest and best friends, who, aided by her new spouse with his own rather odd set of automotive buying considerations and values? Considerations that are far different than the new bride’s who buys only “cute little cars in pretty colors that make her smile.” But she also gets a CBH and CMS (car marketing stress) after walking out of every store. Her husband however goes ballistic at the process and demands to speak to the oldest salesman on the floor or walks out. Then calls me. You see the newlyweds live in Texas.

It’s a helluva conundrum and it’s been going on for a couple of weeks. Over the breakfast, lunch or dinner table with my wife and countless cell phone calls from my friend and/or his wife as they enter or leave a dealers showroom.  Is two weeks the gestation period of new car buying? Must be.

My wife’s decision to consider a new car was prompted by the service manager of a dealership literally saying, “It’s time. Your car is on a life support and I can’t tell you how much long it’ll last.” Sad news after 150,000+ miles of faithful service, but it was the push to end procrastination she needed and ruefully decided to go car shopping.

Test Drive!

Free Test Drive!

Contrast this to my friend who thought his wife’s six year old car, while small, cute and “does bring a smile to her face,” was too damn small for the crazed nuts driving those big trucks and SUVs on the nasty freeways of Houston. “It can’t be really safe,” was his comment. His wife, however, was not going car shopping.  Her car was just fine, thank you and only had 40,000 miles.  It took some convincing, but the newlyweds spent two weekends car shopping.

(more…)

Americans Keeping Their Cars Longer

More reliable vehicles, uncertain economy, all contribute.

by on Jul.14, 2009

Americans are keeping their old cars longer, says a new study.

Americans are keeping their old cars longer.

We all know those car buyers who can’t wait for the newest models to show up at their local dealership.  My own uncle felt that something was wrong with life itself if he wasn’t in a position to trade in at least every other year, if not sooner.  But while there are still plenty of “rapid replacers,” a new study suggests that Americans are keeping their cars significantly longer than before.

Perhaps the findings by the California-based market research firm, AutoPacific, Inc., should come as no surprise, whether you site the economy, the fact that cars are lasting longer or simply changes in public attitudes.  In some overseas markets, like Japan, there’s been a steady social turn away from the automobile, though there’s little indication that Americans have yet fallen out of love with their cars.

Auto Insight Available

Auto Insight Available

Nevertheless, “People who previously bought a new car every one or two years have significantly scaled back their purchasing, and those who before bought every three to four years are now waiting at least an additional year,” said George Peterson, president of AutoPacific.

(more…)