CONSUMERS

9 Winners and Losers of 2019

January 7, 2020 by admin 2 Comments

Ram Trucks
Ram Truck brand sales topped 700,000 units sold for the first time in 2019.

It’s a wrap: 2019 is in the books. And if you’re thinking we’re a bit late sharing this information, hold on: the U.S. auto industry finished reporting its annual sales on Monday, closing out an extended period of news releases hyping the details.

We’ll cut to the chase and look at the winners and losers for the past year.

Winner: U.S. auto industry. This was supposed to be the year the industry fell below 17 million new light vehicles sold. Indeed, last year was also supposed to fall short. But neither year did. Yes, sales were down slightly year over year, by 1.6-percent, but managed to finish around 17.1 million units sold for the year. That’s five consecutive years of topping the 17 million mark. Importantly, there’s a chance we’ll see a sixth year for 2020.

Loser: American consumers. Stop right there: purchasing a new vehicle isn’t necessarily a bad thing. What’s problematic is the loan terms, which are averaging 68 months. Worse, is the availability of long-term loans of 72 and 84 months, respectively. That means there are a greater number of consumers paying for their new vehicle for seven years. What’s not always apparent are consumers rolling over their loan balances into a new loan. That’s a costly decision and very concerning.

Winner: Ram 1500 pickup truck. Yes, the Ford F-150 is the indisputable pickup truck king for four decades running. Indeed, the Ford F-Series recorded 896,526 units sold, down 1.41-percent versus the year earlier. The big news is the Ram 1500, which notched 633,694 vehicles sold, an increase of 18.01 percent. Not only is the Ram Pickup a big gainer, but it has displaced the Chevrolet Silverado as the number two seller in the U.S. Though Chevrolet has egg on its face by losing its place to Ram, GM still builds more full-size pickup trucks, selling 807,894 units of the Silverado and GMC Sierra combined.

Prius sales are falling, thanks in part to new models such as this Toyota Corolla Hybrid.

Loser: Toyota Prius Family. Hybrid sales continue to fall as fuel prices remain stable and well below historical highs reached in 2012 at $3.64 per gallon. With prices averaging $2.55 per gallon in December, models such as the Toyota Prius continue to lose appeal. Indeed, Prius sales fell by 20.84-percent in 2019 to 69,718 units. That’s less than half the Prius’ sold in 2012 and well below the peak 181K units purchased in 2007. Some of the sales have gone to other Toyota hybrid models as well as to new competitors, such as the Hyundai Ioniq.

Winner: Fiat Chrysler. The deal is all about done. That deal has Fiat Chrysler merging with the PSA Groupe to form the world’s fourth-largest automaker. FCA is a winner as it was the dream of its late CEO Sergio Marchionne to find a partner. The new company will realize economies of scale and be better positioned to work through vehicle electrification and autonomous driving, which are the two largest and costliest technologies of our time. Without a merger, FCA most likely would have been left behind.

Loser: Sedans. Remember when sedans (and coupes and convertibles) ruled the road? Sure, there were some pickup trucks and vans in the mix, but the family vehicle of choice was the sedan as well as its station wagon variant. Well, car sales continue to fall and now represent about one-quarter of the market. We said good-bye to the Chevrolet Cruze, Ford Taurus, and to the Hyundai Azera last year. Other Ford and Chevrolet models are also gone and the Volkswagen Beetle is no more. Likely, car sales will continue to fall for a few years before finally stabilizing. Manufacturers that stay in the segment may find the remaining market too good to ignore.

2019 Nissan Altima SR — Sedan sales are declining but new models such as this Nissan Altima are keeping the segment fresh.

Winner: Carlos Ghosn. The former Nissan and Renault CEO is now a free man. At least he’s freed from Japanese confinement as he snook his way out of the country and found his way to Lebanon. How he got there is a story for the ages and one that isn’t quite clear just yet. Regardless, Mr. Ghosn should stay out of jail as long as Lebanon ignores an international warrant and public opinion aligns with the executive as he tells his story. On the flip side, Nissan may prove the biggest loser, especially if the details of how it all went down raise serious questions.

Loser: UAW. The UAW appears the winner following a protracted strike with GM. Organized labor certainly looked strong as it kept GM plants shut for more than a month, representing the longest strike in nearly 50 years. The settlement yielded several gains for the rank and file, including forging a pathway to permanent employment for temporary workers. Also, GM created a shorter route to top-tier wages, agreed to keep open and transform one assembly plant targeted for closure, and maintained its strong health benefits for employees. So, how is the UAW the loser? The union failed to organize Volkswagen’s Tennessee plant, it remains shut out of Nissan factories in the U.S. and continues to lose members. Then there is the matter of a corruption scandal involving union brass. Several leaders accepted kickbacks from UAW vendors and contractors, enriching themselves at members’ expense. At least 10 individuals were involved, giving the UAW a black eye in the process.

Winner: New models. We like new and updated models. And we show our approval (or disapproval) in the way we carry out our purchase decisions. Several new models enjoyed success in 2019, registering big gains or significant sales as they debuted. Among them were the Audi Q8, BMW Z4, Cadillac XT4, Genesis G70, Nissan Kicks, and the Subaru Ascent. Other winners included the Ford Expedition, Honda Insight, Mercedes-Benz AMG GT, and the Mitsubishi Eclipse Cross.

The Audi Q8 debuted with robust sales to show for it.

2020 Auto Trends

We have a few predictions for 2020 to share, including our guess auto sales will narrowly top 17 million units for an unprecedented sixth consecutive year.

Further, we think the Chevrolet Corvette’s debut will be followed by announcements of even more powerful models. Moreover, Rivian Motors will get its first models to the market before the year closes, Ford and Volkswagen will form an alliance, and GM will not resurrect its Hummer brand. Lastly, Hyundai’s first pickup truck will arrive, Ford will keep the Mustang name on the Mach-E electric crossover, and Jeep will unveil its full-size SUVs.

Car Insurance for the Poor? Good Luck With That.

February 9, 2016 by admin 2 Comments

Renters may pay much more for their auto insurance coverage than do homeowners.

If you’re a low-income individual, more than likely you rent your home and don’t own it. Even if you’re a good driver, obtaining affordable car insurance is more costly for renters, than for homeowners, a fact recently uncovered by the Consumer Federation of America (CFA).

money tussle Indeed, in a press statement released on Monday as well as in an accompanying media teleconference, two CFA representatives — Bob Hunter, Director of Insurance and Doug Heller, Insurance Consultant — articulated just how much more the renting poor may pay for their auto insurance.

Higher Rates Even for Good Drivers

CFA research was conducted to determine what those differences might be, finding that renters pay 7 percent per year more on average than homeowners. That translates to $112 annually, not a small amount for people of limited means.

Auto insurance companies have long used home ownership as one criteria for determining rates. Other factors may include an individual’s credit score, zip code, education, occupation, the type of vehicle driven, and driving record. Thus, consumers not only pay more for their auto insurance because they rent, but likely far higher than that when other factors are taken into consideration by insurers. By the way, uninsured motorists comprise one of eight drivers in the US, according to the Insurance Information Institute.

Renters already carry a burden when it comes to their finances. According to 2013 Federal Reserve Bank data, the average annual income for renters in the US was $27,800 compared with $63,400 for homeowners.

“To raise people’s auto insurance premium because they can’t afford to buy their homes unfairly discriminates against lower-income drivers,” said J. Robert Hunter, CFA’s Insurance Director and the former Insurance Commissioner of Texas. “A good driver is a good driver whether she rents or owns her home. Insurance companies should not be allowed to target people based on homeownership status.”

Minimum Limits Liability Coverage

The CFA surveyed minimum limits liability coverage in 10 cities scattered across the United States and chose the seven largest insurers for the analysis. The seven insurers were: State Farm, Geico, Allstate, Progressive, Farmers, Liberty Mutual, and Nationwide.

To determine the insurance rate, the CFA utilized each company’s website to acquire two premiums in each city for a sample 30-year-old female motorist with a perfect driving record and a 2005 Honda Civic to insure. Both premium inquiries were identical, save for one category — whether she rented her home or owned it.

While most of the increases for the renter came in single digits, there were several outliers that raised rates by double digits, including by 47 percent for Liberty Mutual customers in Louisville, Kentucky. In effect, the sample owner of the Honda Civic would have been charged $768 per year more than had she owned her home.

Notably, Liberty Mutual was far more likely to charge renters more for their auto insurance than any other company, tacking on $307 per more per year on average. On the other hand, Geico did not use homeownership as a criteria for renters, thus rates for renters and homeowners were the same. Curiously, Allstate actually provided renters with lower insurance rates than for homeowners in Chicago, coming in at 11 percent lower.

The CFA provides a pair of tables showing the annual premium charges in total dollars and percentage by company in each of the 10 cities. The organization also checked rates in an eleventh city, Oakland, California, confirming that auto insurance rates for homeowners and renters were the same. That’s because California law prohibits insurers from setting rates based on home ownership, something the CFA would like to see the other states follow.

Advocating for the Poor

“Using customers’ homeownership status to determine premiums is another way in which insurance companies are piling on lower-income Americans,” said Douglas Heller, a consumer advocate who worked with CFA’s Michelle Styczynski to analyze the data in the study released today. “With all these different rating factors that have nothing to do with driving, auto insurers are charging good drivers hundreds and sometimes even thousands of dollars extra just for being poor.”

Hunter concluded that while people may have a choice whether to own or rent a home, they aren’t given that choice when it comes to purchasing car insurance. “State Insurance Commissioners and elected representatives should step in and stop this practice,” said Hunter.

The CFA representatives concluded by stating they plan to forward their findings to each state’s insurance commissioners and urge them to eliminate the gap between homeowners and renters.

Charts and date courtesy of the Consumer Federation of America (CFA).

Brand APEAL: Porsche Leads for 11th Consecutive Year

July 23, 2015 by admin Leave a Comment

Porsche is globally recognized as the top automotive brand, a fact regularly affirmed by various consumer studies and surveys. Indeed, for the 11th consecutive year, Porsche finished on top of J.D. Power’s APEAL study for 2015.

Porsche Cayman.

APEAL stands for U.S. Automotive Performance, Execution and Layout study what looks at 77 vehicle attributes to determine what owners like and dislike about their new cars. Those attributes are comprised of categories including the design, content, layout, execution, and performance of the respective models.

For 2015, J.D. Power surveyed more than 84,000 new car buyers from February to May, in a bid to determine how buyers and lessees felt about their vehicles after 90 days of ownership. Power uses a 1,000-point scale and assigns a number to each model as well as an overall score for the make or brand.

This year, the average score has risen by four points to 798. Safety features contributed to the increase, including blind spot monitoring and warning systems. Both premium and mainstream brands are benefiting with the latter group closing the traditional satisfaction void with its high-end counterparts. Further, models equipped with advanced safety systems score an average of 38 points higher than those not so equipped.

Mini Cooper.

“Unlike other technologies, such as voice recognition, that can be challenging to operate, most safety features provide information in a more intuitive way, giving owners a greater sense of security,” said Renee Stephens, vice president of U.S. automotive quality at J.D. Power. “Not only are models increasingly offering systems that improve safety and visibility, but owners are also using them on a regular basis. This can go a long way toward generating positive feelings about their vehicle overall.”

Power also found that consumers will happily pay more for certain safety features such as blind-spot warning and detection systems. That’s one perquisite consumers say that they’d be willing to pay as much as $750 to receive. Clearly, car manufacturers will hone their attention on that revelation.

Porsche led all comers with a score of 874 followed by 855 for Jaguar, 854 for BMW, 853 for Mercedes-Benz, and 852 for Audi. Porsche also had three of the top models in the 26 segments featured. Indeed, the Porsche Cayman led the Compact Premium Sporty Car category, the Porsche Macan took the Compact Premium SUV segment, and the Porsche Cayenne led the Midsize Premium SUV group.

Ford F-150

Ford F-150.

Among mainstream brands Mini placed first, finishing with a score of 825. Chevrolet and Ford, like Porsche, each had three segment leaders. Audi, BMW, Dodge, Mazda and Mini placed two group leaders each.

Once again, J.D. Power reaffirmed a problem that has plagued new car buyers in recent years: how to work the advanced technologies found in today’s cars. Frustration with those technologies will often impact model and brand scores, something Power says can be overcome at the dealer level.

Specifically, the research firm offered advice for consumers, including discovering the benefits of safety features before opting for them. However, in many cases, these features are standard or are included with particular trim level or package offerings.

Consumers should also familiarize themselves with the entire safety package, not just the items they think they will use. Power also urged consumers to keep track of the technological features that are of most interest to consumers, including those still needing to be perfected. The last tip points to a problem inherent in many vehicles — wonky GPS-based infotainment systems that can be difficult to decipher.

Like some of the other studies offered in recent years, the APEAL study indicates manufacturers are listening to consumer concerns and are actively keeping up with the latest auto trends, especially safety and in-cabin technologies. Some brands, such as Jaguar and Mini, have made much progress in recent years, reflecting positive changes to company culture that are in prevalence today.

Photos copyright Auto Trends Magazine.

Consumer Car Loans Reach Record Lengths

June 8, 2015 by admin 3 Comments

Hyundai Sonata

New car loan terms are longer than ever before.

Earlier this month, Experian Automotive announced that the average length of both used and new car loans had increased by one month to 62 and 67 months, respectively. These loan term averages are at record levels, but consumers are eagerly embracing the extended loan terms.

Indeed, Experian noted that 29.5 percent of all new car loans are for 73 to 84 months, representing an 18.6 percent year-over-year increase against the first quarter of 2014. Moreover, used car loans for the same lengthened term and period were up by 14.2 percent, representing 16 percent of all such loans.

Negative Equity Implications

Despite the increasing shift to longer term car loans, Experian’s senior director of automotive finance, Melinda Zabritski, downplayed worries that such loans might have an adverse affect on consumers. “Most longer-term loans help consumers keep monthly payments manageable, while allowing them to purchase the vehicles they need without having to break the bank. However, it is critical for consumers to understand that if they take a long-term loan, they need to keep the car longer or could face negative equity should they choose to trade it in after only a few years,” explained Zabritski.

Experian noted that the average amount financed for new car loans has also set a record. In the first quarter of 2014, consumers financed an average of $27,612. But that amount rose by $1,099 to $28,711 one year later. Monthly payments increased too, rising from $474 to $488.

As a point of comparison, used car debt is coming in lower, at least $10,000 below new car indebtedness. However, those obligation levels are on the rise, increasing from $17,929 to $18,213. Furthermore, the median interest rate for used car loans was 9.17 percent compared to 4.71 percent for new car loans.

GMC Sierra Denali

Longer loan terms mean affording trucks such as this GMC Sierra Denali.

Consumers with excellent credit routinely qualify for the best loan terms. To be sure, those low teaser rates offered by the car manufacturer’s financing arms are reserved only for people with the highest credit scores.

And with an average credit score of 713 for the new car loans financed during the first quarter of this year, that number is about 100 points lower than consumers with excellent credit, underscoring the higher average interest rate. Used car loan borrowers came in even lower, with a median 643 credit score. That’s not far above the 620 credit score that some consider subprime.

Underwater and Sinking Fast

Not everyone is convinced that the trend to longer loan terms is a good one.

For instance, Paul Kirkbride, SVP of CU Solutions at CU Direct noted that there are certain financial implications consumers should keep in mind. Specifically, they may find themselves underwater (i.e., owing more on their car than what it is worth) as vehicles depreciate an average of 13 percent annually according to NADA.

Said Kirkbride, “If a borrower didn’t make a down payment and selected a longer term, the risk is the borrower will possibly need to roll negative equity from one car loan into another when they trade in the car, or worse, should the borrower need to sell the car, they’ll have to come up with the difference to pay off the loan.”

He also pointed out that credit unions typically work with people who have the financial means and creditworthiness to afford such loans. Such consumers usually choose the extended loans for convenience purposes.

2013 Buick Encore

Interest rates for late model used cars average above 9 percent.

Looming and Costly Repair Costs

Ed Snyder, President of Oaktree Financial Advisors foresees a problem that consumers may overlook. In particular, he points out that repair costs tend to mount as a car ages.

“If you take a longer loan, like 72 months, you are going to rack up some miles by the time your loan is paid off. If you average 15,000 miles per year you’ll be closing in on 90,000 miles – and that’s on a new car. If you buy a used car you’d have even more miles on it at that point. This is certainly at the mileage and age where your car could need some expensive repairs. It could easily need some work on the air conditioning or new tires or other repairs. You’ll have to foot that bill on top of the car payment that you still have,” said Snyder.

The longer term new and used car loans may eventually have an adverse impact on new car sales down the line as well. Said Snyder, “These longer loan lengths could end up meaning fewer cars sold in the future as people are forced to hang onto their cars longer since they are still paying on them.”

Credit and Car Loans

Astute consumers can and should keep tabs on their credit by obtaining copies of their three credit reports. Those reports, assembled by Trans Union, Experian and Equifax are available for free once annually at AnnualCreditReport.com. Information in these reports can affect credit scores, a three-digit number that is sold separately.

Shopping around for a car loan, putting more money down and choosing a shorter loan length can reduce your monthly payments as well as curtail your overall costs. Explore your options before committing to a car loan that you may have for the next six, seven or eight years.

Pony Up: Ford Mustang’s Global Appeal Takes Hold

March 17, 2015 by admin Leave a Comment

It has taken more than 50 years for the Ford Mustang to go global and that wait may pay off for the Ford Motor Company and consumers in a big way. Ford reports strong interest in its pony car with consumers signing up for test drives, configuring models online, and learning more about the blue oval brand.

Some 51 years after the first Ford Mustang was introduced, America’s beloved pony car has now taken to the world. Largely available only in parts of North America since its inception, the latest generation Ford Mustang is now sold in more than 100 markets worldwide. Thus, people who may have yearned for this model previously with no real ability to buy one are finding that local Ford dealers are now selling the Mustang.

Ford Mustang: Top Sports Coupe

And that new Mustang is enjoying a stronger following in the United States as well as abroad. Indeed, February US sales for the pony car were up by 32 percent to 8,454 units sold and are up 66.6 percent year to date.

Contrast that with the Chevrolet Camaro and the 11,364 units sold for the first two months and it is clear that Mustang has galloped ahead. Fiat Chrysler, by the way, reported sales for its sport coupe, coming in at 9,847 units for the Dodge Challenger.

Consumer Interest Worldwide

The Ford Motor Company has been carefully monitoring global consumer interest in the Mustang and has discovered several important facts based largely on search queries and other tracking factors.

First, Europe has shown much interest in the Mustang as consumers have configured more than 1.1 million Mustangs online. Of course, that number is not indicative of sales, but it does demonstrate the widespread early interest this iconic sport coupe has engendered in Europeans. Indeed, the Mustang will go on sale in Europe by the middle of this year.

Second, Chinese consumers have shown much interest too. More than 18,000 Chinese consumers have registered for test drives and Ford says more than 5 million people have visited the Mustang’s website. The car has gone on sale in China earlier this year.

Third, two color choices stand out as favorites amongst potential buyers. Red and black are the two top exterior color choices that are being considered by potential buyers in most parts of the world.

Color Coordination and Local Appeal

Speaking of colors, white is the most popular color of choice for all vehicles in the United States, but when it comes to the Mustang, black is favored followed by Magnetic Metallic (silver/gray) and Ruby Red.

In China, 35 percent of Mustang orders are for Ruby Red, followed by Oxford White at 20 percent. Coming in at just under 20 percent and in a close third position is black.

European consumers are chomping at the bit for the Ford Mustang’s arrival with Race Red and Absolute Black essentially knotted at 20 percent each. Local results are a bit different with Deep Impact Blue stirring the hearts of British and Italian consumers alike.

One Ford Strategy

The Ford Mustang represents a reversal of sorts for the company’s One Ford Strategy, but in a positive way. That strategy, enumerated in 2008, had six European Ford models planned for the United States market, effectively uniting the company’s footprint across multiple markets. In this example, the Mustang takes a wholly American product and presents a homegrown product to the world.

See Also — Steadfast Stallion: Ford Mustang GT

Ford Mustang photo courtesy copyright Auto Trends Magazine.

Lexus Reiteration: 2015 Vehicle Dependability Study Leader

March 2, 2015 by admin Leave a Comment

J.D. Power & Associates has once again placed the Lexus brand atop its Vehicle Dependability Study. For 2015 and for the fourth consecutive year, Toyota’s luxury brand won out, besting 30 other brands. General Motors and Toyota Motors each received seven segment awards.

Customer satisfaction is critical in the auto industry, thus J.D. Power & Associates annually gauges brand progress based on owner feedback. The 2015 Vehicle Dependability Study has been released and for the fourth consecutive year Lexus is America’s top brand, easily outdistancing second-place Buick and third-place Toyota.

Number of Problems Per 100 Vehicles

As in recent years, manufacturers have been slammed by Bluetooth connectivity and voice recognition problems, technologies that pull down scores. The J.D. Power 2015 Vehicle Dependability Study, now in its 26th year, focuses on vehicles after three years of ownership. Thus, this year’s study examined problems experienced over the past 12 months by original owners of 2012 model-year vehicles.

From the collected data, J.D. Power assigns a score based on the number of problems experienced per 100 vehicles (PP100). In particular, a lower score means a higher finish and at PP89 Lexus finished well ahead of the PP141 industry average.

2015 J.D. Power Vehicle Dependability Study

Niggling and Sometimes Pervasive Problems

J.D. Power’s study is not some cursory investigation of problems owners face. Instead, the study quantifies 177 specific problem symptoms within eight major vehicle categories. Consequently, scores are assigned to all 31 tracked brands.

“As we’ve seen in our Initial Quality Study, owners view in-vehicle technology issues as significant problems, and they typically don’t go away after the ownership honeymoon period is over,” said Renee Stephens, vice president of U.S. automotive at J.D. Power. “Furthermore, early indications from our upcoming 2015 U.S. Tech Choice Study show that vehicle owner expectations of advanced technology capabilities is growing. The owners clearly want the latest technology in their vehicles, and they don’t hesitate to express their disapproval when it doesn’t work. Their definition of dependability is increasingly influenced by usability.”

Tech Functionality and Usability

And that usability will often determine whether a customer returns to the brand or goes elsewhere the next time. Indeed, 56 percent of car owners who reported no problems with their vehicle say they “definitely will” purchase the same brand the next go around. However, 43 percent of those who experienced three or more problems with a vehicle are likely to flee to a competitor.

Moreover, the study found that 15 percent of new-vehicle buyers avoided cars they considered technologically problematic compared to just 4 percent a decade earlier. Obviously, technology can be a deal maker or a breaker for a significant number of new car shoppers.

As one who reviews new cars I can attest to the frustrations many car owners enumerate. That 55 percent of individuals surveyed said that they experienced Bluetooth pairing and connectivity problems is a phenomenal number that should not be easily dismissed. Furthermore, another 31 percent said that their phones would not connect when entering a vehicle.

Another key point of the study reveals problems with gearboxes. Specifically, 30 percent identified powertrain problems due to rough shifting and hesitation associated with automatic transmission. Notably, six of the top 10 problems had nothing to do with malfunctions or product defects — those problems were entirely attributed to the vehicle’s design.

Buick Ascension and the Industry Laggards

Buick at PP110 came in second place, just ahead of the Toyota brand at PP111. Certainly, Buick has been enjoying a renaissance in recent years and its latest ascension has moved it up by three spots. Cadillac, Honda, Porsche, Lincoln, Mercedes-Benz, Scion, Chevrolet and GMC rounded out the top 10.

On the other end of the spectrum, Fiat finished at PP273, followed by Land Rover at PP258. No other brands had scores above 200. The Chrysler Group finished below the industry’s average across the board, except for the Ram truck brand.

As far as the top models in each segment, J.D. Power looked at 8 car categories and 11 truck categories. Trucks, by the way, is a broad and generic term composed of pickup trucks, vans, sport utility vehicles and multipurpose vehicles.

The winners were:

Small Car: Scion xD
Compact Car: Toyota Corolla
Compact Premium Car: Lexus ES
Compact Sporty Car: Scion tC
Midsize Car: Chevrolet Malibu
Midsize Sporty Car: Chevrolet Camaro
Midsize Premium Car: Mercedes-Benz E-Class
Large Car: Buick LaCrosse
Small SUV: Kia Sportage
Compact SUV: GMC Terrain
Compact Premium SUV: Mercedes-Benz GLK-Class
Compact MPV: Scion xB
Midsize SUV: Nissan Murano
Midsize Premium SUV: Lexus GX
Midsize Pickup: Honda Ridgeline
Minivan: Toyota Sienna
Large SUV: GMC Yukon
Large Light Duty Pickup: GMC Sierra LD
Large Heavy Duty Pickup: Chevrolet Silverado HD

Study Parameters

J.D. Power fielded its study in November and December of 2014, surveying 34,000 original owners of 2012 model-year vehicles following three years of ownership.

Infotainment Systems Take a Beating in Latest Consumer Reports Survey

October 29, 2014 by admin 1 Comment

The Consumer Reports 2014 Annual Reliability Survey is out, what paints a highly critical and negative picture of in-car technologies, particularly infotainment systems. Such systems typically provide audio, information and navigation access, but often do not deliver as promised. Instead, users may find these systems confusing, unreliable or simply unworkable, leading Consumer Reports (CR) to say that they present a “growing reliability plague” for manufacturers.

Consumer Reports took exception with the Infiniti QX60.

Problem First-Year Models

CR especially pointed to flaws found in first-year models for several brands, including Cadillac, Ford, Honda, Infiniti, Fiat, Jeep and Ram, with each having numerous bugs and glitches in their infotainment systems. CR surveyed owners of more than 1.1 million new vehicles, identifying 17 problem areas. Topping the list were in-car electronics, easily outpacing consumer complaints in other areas.

As before, CR found that the Asian brands usually outperformed all others with the American brands finishing far down the pack. Most European brands were in the middle of the pack or toward the end. Audi, however, continues to excel, finishing in the fifth spot for the second consecutive year. Porsche took the ninth position.

Lexus, Toyota, Mazda and Honda nabbed the top four spots. Following Audi, Buick, Subaru, Scion, Porsche and Kia rounded out the top 10. Fiat Chrysler, however, took the last four spots of the 28 brands surveyed with Dodge, Ram, Jeep and Fiat rounding out the group.

And if you think technologies are the sole problem, CR insists otherwise. “Infotainment system problems generally don’t exist in a vacuum,” said Jake Fisher, director of automotive testing at Consumer Reports, “A close look at the results suggests that cars with a lot of in-car electronic issues usually have plenty of other troubles, too.”

Chrysler Defies the Odds With Strong Sales

Despite the apparent quality issues, Fiat Chrysler continues to thrive. Indeed, the Chrysler Group has experienced 54 consecutive months of year-over-year sales increases through Sept. 2014. Chrysler Group sales are up 15 percent for the year, nearly three times the industry average. The Chrysler Group is seeing Jeep sales up by 45 percent and Ram sales up by 25 percent for the year.

For its report, CR gathered data for 248 models, looking at 17 potential problem areas. From its survey it has been able to accurately point out future problems owners may have with their new vehicles as well as to spot trends.

One trend that isn’t boding well for Infiniti is the reliability of two of its models: the new Q50 sedans and the QX60 crossover. Both models have had their share of problems, causing Infiniti to take the largest plunge of any brand, falling from 6th place last year to the 20th position this year.

Improved Infotainment Systems

CR did find that some manufacturers are making changes that have made their infotainment systems easier to use. CR has criticized Ford and Lincoln for their technologies, but the two Ford Motor Company brands have made steady improvements ever since the organization slammed the 2011 Ford Explorer’s quality. While Ford rose three positions this year, Lincoln had the largest year-over-year increase of any brand, jumping 12 positions to the 15th spot.

Mercedes-Benz fell 11 spots on the heels of introducing its CLA-Class sedan and high-end S-Class. A few of its models, including the GLK utility vehicle and the E-Class V-6 sedan, outperformed the market.

Poor Performers by Segment

American manufacturers need to pay closer attention to certain segments where these vehicles are not performing up to par. CR found that the subcompact Chevy Sonic, the compact Chevy Cruze, the compact Ford Focus and the compact Dodge Dart turbo each performed below average. Large pickup trucks have been a problem too with the Chevrolet Silverado, GMC Sierra and Ram 1500 each performing below average.

MRY Study Reveals That We Still Love Our Cars

May 19, 2014 by admin 1 Comment

And don’t touch our smartphones!

American consumers are not about to give up their cars despite the rise in popularity of car sharing services such as Zipcar.

MRY: Young want to buy new cars. A Jan. 2014 study conducted by MRY with Whitman Insight Strategies and released this month surveyed 1,000 people across the United States, evenly dividing the group between under-35 consumers (Millennials) and individuals ages 35 on up. Each person surveyed was required to own a smartphone while also possessing a valid driver’s license.

MRY: Millennials and Their Driving Aspirations

The surveyors wanted to find out if handheld devices were trumping the behind-the-wheel driving experience, especially as recent data has revealed that fewer 16 year olds had driver’s licenses. Some people have argued that young adults are much more interested in their digital devices than they are in acquiring a car. The survey found that this simply is not true as 94 percent of surveyed Millennials currently own or lease a vehicle. That figure compares to 99 percent of consumers who are at least 35 years old.

Lest you think that attaining a new car is a lower priority for some, the survey revealed otherwise. Indeed, 91 percent of the respondents said that “…owning a car is very important to their life.” For them, car ownership is more important than having access to high speed Internet, owning a smartphone, or email. What should encourage the car sharing companies is that this same consumer pool considers having access to a car and owning one synonymously.

Types of Car/Ride Sharing Services

A Zipcar Ford Focus.

Car sharing services can tell you a few things about the typical user: these individuals are young, tech savvy and are “early adopters.”

MRY found that 51 percent of Millennials would use a branded car sharing service if one were available where they lived. By “branded” that term describes services currently provided by BMW and Volkswagen. That figure compares to 48 percent of respondents who would use a standard car sharing service (Zipcar, Car2Go and Hertz 24/7) and 46 percent who indicated that they would use a ride sharing service with a private driver arranged through a mobile app.

The survey also asked respondents to evaluate tech companies and car manufacturers, comparing their performance in a pair of important technological metrics: innovation/disruption and personal connection. Apple, Amazon, Lyft, Uber and Zipcar performed quite well as did Ford and Toyota. However, consumer perceptions of Volkswagen and General Motors came in lower. Toyota has been at the cutting of hybrid technology while Ford has led in connectivity with its innovative SYNC infotainment system.

Both smartphones and cars provide similar advantages including making life easier for users. Cars and electronic devices enable people to experience new things, provide an escape from a hectic day, give them a sense of freedom, and help people accomplish their daily tasks. Interacting with family and friends was seen as another benefit of having both, what are considered of equal importance by most respondents.

MRY: Future Car Playing Plans

An overwhelming number of the respondents also indicated that they plan on buying or leasing a new car within the next three years with just 7 percent saying that they had no plans to do so. Half of all Millennials expect to make their purchase within the next year with about one-quarter planning to do so within the next two years. Seven percent plan to buy a new car within three years. The remaining sample indicated that they are not currently in the market for a new vehicle.

The MRY survey did reveal several important facts about young adults and how they currently get around. Some 17 percent of Millennials use a transit system (train, subway) to 10 percent of those aged 35 and up. They are also more likely to ride a bus coming in at 18 percent to just 7 percent for older Americans. Five percent use car sharing services to just 1 percent of the older Americans.

The Ford Fiesta is one such model that targets Millennials.

Even with strong interest in buying a new car, respondents still look at car/ride sharing favorably with 52 percent saying that they would consider using such services to 48 percent who indicated that they would not. The survey also discovered other behaviors including that they like brands that are innovative, but also prefer those grounded in history or heritage. Many respondents also believe that they are tech savvy and prefer brands that are too. Importantly, they believe that they are also more advanced about tech trends than their friends.

If You Were a Car

Lastly, the MRY survey asked respondents the following question: “If you were a car, what brand of car would you be?” Ford and Toyota received the top answers followed by Honda and BMW. A number of mainstream brands fared quite well too including Dodge and Chevy. Quite a few brands or models such as Jaguar, Corvette, Lincoln, Tesla and Mustang had small responses.

See Also — MTV Says: Millennials Love Their Cars!

NHTSA Launches TireWise Safety Campaign

May 15, 2014 by admin Leave a Comment

Tire safety and your car.

TireWise Campaign — The NHTSA is helping raise automobile tire awareness through its TireWise campaign. Pictured is a form that can keep consumers in the loop.

Tire-related crashes contribute to more than 11,000 accidents and kill at least 200 people each year according to the National Highway Traffic Safety Administration (NHTSA). To assist consumers with selecting and maintaining their tires, the NHTSA has introduced its TireWise safety campaign, covering topics ranging from tire aging to tread wear.

Safety is our top priority and following these simple guidelines will help prevent needless deaths and injuries every year, said U.S. Transportation Secretary Anthony Foxx. This campaign will help consumers make more informed choices every step of the way when it comes to choosing and caring for their tires – keeping them safer and saving them money at the same time.

TireWise Safety Campaign

The TireWise safety campaign is featured on the federal government’s SaferCar.gov website with that content available to consumers, retailers and tire manufacturers.

Included in the campaign is advice that can be especially useful at various stages of the tire buying, maintenance and replacement process. For tire buying, TireWise shows consumers how to choose the right type of tire including its size and rating. The NHTSA advises car owners to check their tires monthly and how best to accomplish that task.

The campaign also advises monthly checks for treadwear and covers the effects of aging that can lead to failure. And just in time for summer, TireWise notes how high temperatures can effect tire life. The campaign also details when tires should be replaced.

Working with retailers and tire manufacturers allows us to reach the consumers at the time they are making these critical decisions, which is essential in building public awareness of tire-safety issues, said NHTSA Acting Administrator David Friedman. Since the implementation of NHTSAs new tire standards, weve seen a significant decrease in tire-related fatalities, and we look forward to working with retailers, manufacturers, and other partners in the industry to continue improving traffic safety.

Mobile App for Droid and Apple

The NHTSA provides a SaferCar mobile app that is compatible with Apple and Droid products. Later this year the app will be updated to make it possible for consumers to sign up for tire recall alerts. They will also be able to use the app to submit complaints about their tires.

In the meantime, current recall information is shared via social media — follow the NHTSA on Twitter or on Facebook for those updates. You can also have recall information sent to you by signing up on the SaferCar.gov website where email alerts and RSS feeds are provided.

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Young Car Buyers Eager to Own New

January 30, 2014 by admin 3 Comments

Good news for car manufacturers.

For the second time within a week, a survey has revealed that young car buyers are ready to get into the new car game and buy one. Thats the findings of the J.D. Power 2014 U.S. Automotive Media and Marketing Report, based on a survey of consumers 25 years old and younger.

Young Consumers Want Cars

young driver The J.D. Power report aligns with the findings of a report from Deloitte. Like the earlier report, J.D. Power found that consumers do want to buy new cars, essentially refuting the assertion by some that young adults are much less interested in owning a car, particularly a new one.

And it isn’t just any vehicle that young buyers want. Powerful acceleration and responsive handing is desired by 41 percent of young car buyers compared with 36 percent for the general population. They also prefer to drive on roads with hills and curves, with 22 percent expressing their interest compared with 13 percent of all car buyers.

Image is Important

One-third of these consumers want their vehicles to stand out in a crowd, compared to 20 percent for all car buyers. Further, 19 percent of car buyers say that others can tell a lot about them by the vehicle they choose. That compares with 10 percent of all car buyers.

It shouldn’t come as a surprise that young buyers want to personalize their vehicles too. A full 27 percent are inclined to go with options and accessories compared to 20 percent for all ages.

One Million Consumers

Arianne Walker, senior director, automotive media & marketing at J.D. Power noted that young consumers have expressed increased interest in these attitudes and sentiments, rising by 6 percent since 2009. These are the points that should be kept in mind by car manufacturers as buyers under the age of 25 presently account for 6 percent of new vehicle sales. Thats approximately 1 million car buyers in todays market.

That demographic has varying interests in what types of vehicles they’re interested in too. Certainly, B- and C-segment models such as the subcompact Ford Fiesta and the compact Toyota Corolla are considerations. More affluent buyers are also gravitating toward the premium and luxury brands, and would consider a Buick Regal or an Audi A3 instead. Serving up a variety of vehicles to this age group can help manufacturers win new customers.

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