Automotive market

The automotive market is formed by the demand and the industry.This article is about the general, major trends in the automotive market.

The European automotive market has always boasted more 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. [ [http://www.sema.org/Main/ArticleDetail.aspx?fc_c=1123885x2468667x66059664&contentID=59806 Article Detail ] ]

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 [http://www.worldcarfans.com/9080923.006/rendered-speculation-audi-ev] .

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 vehicles (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, by and large, permanent

GM is also "undertaking a strategic review" of the Hummer brand and could either revamp the product line or sell the brand.

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 Index 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 [http://www.forbes.com/vehicles/2008/08/18/cars-americans-love-forbeslife-cx_jm_0819cars.html?partner=autos_newsletter] .

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 Watanabe 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 [http://www.calcars.org/calcars-news/990.html] .

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 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 [http://www.forbes.com/markets/2008/08/14/chrysler-fiat-tieup-markets-equity-cx_je_0814markets23.html?partner=autos_newsletter] . 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." [http://www.calcars.org/calcars-news/1005.html]

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 dealerships. 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 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 rigs.) [http://finance.yahoo.com/loans/article/105257/Still-Waiting-for-Hybrids-to-Be-the-Smartest-Buy Still-Waiting-for-Hybrids-to-Be-the-Smartest-Buy: Personal Finance News from Yahoo! Finance ] ]

Ford says its two hybrids — a version of the Escape SUV and Mercury Mariner — are selling well, and inventory levels are tight [ [http://www.usatoday.com/money/autos/2008-05-01-april-auto-sales_N.htm Small cars sell, but GM, Ford suffer as gas prices rise - USATODAY.com ] ] .

Car makers compete to demonstrate their pro-hybrid bona fides. The 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.

A sharp rise in gasoline prices and a consumer stampede from sport utility vehicles and pickups have renewed calls for US regulators to consider more aggressive fuel efficiency standards [ [http://www.planetark.com/dailynewsstory.cfm/newsid/49350/story.htm Planet Ark : US Auto Trends Cloud Fuel Efficiency Rules ] ] .

See also

*American Customer Satisfaction Index (ACSI)
*Automotive News Data Center
*Automotive industry
*Corporate Average Fuel Economy
*Microhybrid
*Minicar

References

External links

*
* [http://www.eere.energy.gov/news/archive.cfm/pubDate=%7Bd%20%272008%2D06%2D11%27%7D#11808 GM Shifts Away from Trucks and SUVs, Toward Cars and Crossovers] .
* [http://www.planetark.com/dailynewsstory.cfm/newsid/49151/story.htm Toyota Struggles to Meet Hybrid, Small Car Demand]
* [http://www.usatoday.com/money/autos/2008-05-01-april-auto-sales_N.htm Small and hybrird cars sell, but GM, Ford suffer as gas prices rise] : the Toyota Prius saw sales climb 66.6%.
* [http://www.forbes.com/vehicles/2008/08/18/cars-americans-love-forbeslife-cx_jm_0819cars.html?partner=autos_newsletter Car Brands Americans Love]
* [http://www.detnews.com/apps/pbcs.dll/article?AID=2008810030444 Touring the floor, European push for smaller, cheaper cars apparent]