Archives for June 2017

MG to expand to mainland Europe, what does it need to become successful?

Auto-sales-statistics-China-MG_ZS-SUVAfter almost 10 years of UK-only sales, SAIC MG is ready to start exports of its cars from China to other countries in Europe as well. Recently, Shanghai Automotive Industry Corporation (SAIC) has successfully launched a few crossovers in the domestic market (Roewe RX5, MG ZS), which puts its two passenger car brands among the fastest growing brands in China at the moment. This would be a great moment to expand its footprint to new markets as it can launch there with fresh product, and more importantly: the right product. MG is the designated export brand for passenger cars from SAIC, whereas Roewe is and will remain a China-only brand and Maxus is the LCV brand of the company. MG is already available in a number of countries in the Asia-Pacific, South America and Africa regions, and since 2009 in the UK where it reached a peak of just under 4.200 sales last year. With its expansion into continental Europe, the brand is looking to become the first Chinese brand to successfully enter a mature market, but a number of other players have set similar goals, among others Geely with its newly launched Lynk & Co brand and the resurrected Borgward brand, which both also have concrete plans to enter the European car market.… Continue Reading …

Ford to switch US Focus production to China instead of Mexico

Donald_Trump-Mark_Fields-FordFord has announced that the next generation Focus sedan will be imported from China, now that other automakers have proven there’s little public backslash nor customer hesitation over quality from cars produced in China. Buick already imports the Enclave from China, Cadillac will follow with the CT6 PHEV and Volvo sells the Chinese made S60L in the US and S90 in Europe. So not a lot of breaking news there, except that the Focus will be the highest volume model so far that will be shipped from China to the US. The big story about this announcement is Ford’s decision to pick China instead of Mexico as the new production base for the Focus. Ford originally planned to move Focus production to a new $1.6 billion plant in San Luis Potosi, Mexico. Those plans were canceled in January, less than a year after announcing them, under public pressure from then-president-elect Donald Trump. Trump singled out Ford for its decision to move production from Michigan to Mexico, which he claimed would cost US jobs. Then-Ford-CEO Mark Fields called Bullshit on Trump as the Focus would make room for production of the Bronco SUV and Ranger midsize pickup at Ford’s Michigan Assembly Plant in 2018, and no US jobs would be lost as a result of this move, but it was too little too late against the media-savvy populist who never let truth get in the way of headline-grabbing claims.

Eager not to let Trump take any credit for the decision not to invest in extra capacity in Mexico, Ford cited cost savings of $500 million as the reason to change its mind and build the next gen Focus at its existing plant in Hermosillo, Mexico instead of investing in the new plant in San Luis Potosi. Now there’s a new CEO at the helm at Ford and plans have changed again: Mexican production is off the table altogether. Again, cost savings of another $500 million are quoted as the reason for the shift of production across the Pacific. These plans were already in the making under Mark Fields, but it was the new boss Jim Hackett who eventually pulled the trigger.… Continue Reading …

China car sales analysis May 2017

China-car-sales-graph-may-2017Car sales in China seem to have stalled after years of double digit growth. The main culprit for the slowdown has been mentioned on these pages before: the government has artificially boosted demand for cars with small engines since the 3rd quarter of 2015 when the market threatened to sink into the red due to a collapsing stock market and reduced customer confidence. That tax break has worked perfectly in pulling forward car purchases in Q4 of 2015 and in 2016 but it was cut in half by the beginning of 2017 and has since affected the Chinese car market in a negative way. Sales of vehicles with engines of 1,6 liters or less fell 9% to 1.15 million last month. In Q1, total market sales were still up by 5,7% but two months of declines have brought the year-to-date tally to 9,25 million, up just 2,7% on the first 5 months of 2016. A 2,2% loss in April was a first warning sign and now in May sales are down by another 2,1% to 1,71 million units. The Seasonally Adjusted Annualized selling Rate rebounded to 22,2 million, still the second lowest figure in the past 12 months. SUVs and crossovers continued to fuel the market with sales up 13% to 715.000 units in May, but this could not offset declines in deliveries of sedans (-9,3% to 839.000 sales) and MPVs (-17% to 150.000). The share of domestic automakers was the lowest since last August at 40,3% and it has fallen hard since its peak of 47,1% in February. However, compared to May 2016, the domestic brands have increased their sales 3% while the foreign brands saw their volume shrink by 5,5%.  Year-to-date, the domestic share is now 43,4%.

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European car sales analysis April 2017 – models

Volkswagen_Tiguan-European-sales-figuresAfter discussing the April 2017 European car brand sales ranking, let’s take a closer look at which individual models are helping their brand succeed or fail. After the freak event in March, when the Volkswagen Golf was not the best selling car in Europe, things have returned to normal in April, although the Golf is still the biggest loser by far in the top-25 wiht a loss of more than 28% on last year. The Golf lost more sales from April 2016 to April 2017 than its rival Renault Megane sold last month (Golf: -13.831 units). And while the Golf no longer sells double the volume of its nearest competitor, it still has a gap of almost 10.000 sales to the #2, as the entire top-3 is down. One culprit for the Golf’s demise is obvious in 4th place: the success of the Volkswagen Tiguan, up 70% to equal its highest ranking ever. Last month’s leader Ford Fiesta is down to 7th place as it’s payback time for its dependence on the UK market, which was exceptionally strong in March, but exceptionally weak in April. The same can be said of the Opel/Vauxhall Corsa, down 15% into 8th place. We welcome the Citroën C3 into the top-10 for the first time ever, as it even threatens to outsell its recently acquired stablemate Corsa. The Skoda Octavia is back into the top-10 which means there’s only one crossover in the top-10, as the Nissan Qashqai and Renault Captur are both just outside. The Captur is down 14% but remains ahead of its rivals Peugeot 2008 (#14) and Opel/Vauxhall Mokka X (#25), which are both down by single digits as competition in the segment has intensified by the arrival of new players.… Continue Reading …

European car sales analysis April 2017 – brands

European-car-sales-graph-April_2017The European car market declined by 7% in April 2017 as a collapsing UK market exacerbated a general slowdown across the continent which was caused by having fewer selling days than in 2016 due to a late Easter. Still, the almost  1,22 million cars sold in April is still slightly better than the same month in 2015. As mentioned, the biggest culprit of the decline is the British market, which declined by almost 20% on last year as the result of an increase in the Vehicle Excise Duty tax which came in effect on April 1st in the UK. Another part of the explanation for the plummeting sales is that Easter fell in April this year instead of in March, which means dealers had fewer selling days in 2017. Combined sales of March and April are still up by 2,9% on 2016. The UK market is expected to stabilize as the year proceeds, as the effect of the tax raise will wither away. The Year-to-date figure now stands at 5,44 million units, an increase of 4% on the first four months of 2016.

Of the big markets, only the Spanish market grew in April (+1,1%), as the UK posted a double-digit drop (-19,8%) and Germany (-8%), France (-6%) and Italy (-4,6%) also lost volume. This was balanced by positive contributions from the so-called EU-12 countries (+8.2%), the member states that have joined the EU since 2004. The fastest growing market was Croatia (+29,6%), while Ireland was the biggest loser at -24,5%.… Continue Reading …

Hyundai Kona: this is it [w/ poll]


After what seems like years of teaser and leaks the first official pictures of the Hyundai Kona have been revealed, and we finally get a proper look at what Hyundai’s new challenger to the Nissan Juke looks like.

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US sales: May 2017, models

After discussing the US auto brand sales ranking for May, let’s take a closer look at the models ranking.

Top 10

At the front the RAM Pickup outsold the Chevrolet Silverado for the third month in a row, though only by a slender margin of a little over 1,000 units – not yet enough to overtake its arch rival in YTD sales, though this remains a possibility in the coming months. Behind the pickups once again the leading non-truck car was compact SUV – this time it was the Toyota RAV4, which managed to claw back some space to the class-leading Nissan Rogue and Honda CR-V, both of which ranked relatively poorly in 7th and 8th in May. The surprise in the top-10 this month came from Honda Accord, whose sales were up 5.0% and which ranked 5th, the highest it has been since December’15 (though, YTD, the model is still down 7.3%). Otherwise it was business as usual, with Toyota CamryHonda Civic and Toyota Corolla all continuing its slide by recording sales drops of 10% or so.

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Look-a-like: VW Arteon and…

I have to admit I have a soft spot for the outgoing VW CC (née Passat CC) – it was a handsome car, especially once the facelift sharpened up its front design and rid of the weird oval graphics in the rear lights, and it seemed like a reasonable step up from the more humdrum Passat (in fact, the nickname the press gave it before it was launched, “Passat Plus”, captured its market placement pretty perfectly). What’s more, it sold pretty well, reaching around 30,000 units in its best years both in Europe and in the US. But now VW has grander ambitions for its indirect replacement, the Arteon, and wants the model to go after Audi A5 Sportback and BMW 4-series Gran Coupe. To enable this the carmaker has allowed the Arteon to grow in size, and given it sharper styling which it hopes will imbue the model with a sense of classy sportiness. So far so good, it’s just a pit that in the process the Arteon ended up looking quite a bit like another decidedly non-premium model…

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US sales: May 2017, brands

Total US sales fell by 0.5% in May, the slowest rate of decline so far this year, but a decline nonetheless. What’s more, the decline continued despite favorable market conditions: rising employment, economic growth and (relatively) low gas prices. As has been the trend recently, the overall figure masks burgeoning demand for trucks and crossovers, which was up 6.2%, and the continuing decline in demand for cars, whose sales were down 10%.

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Look-a-like: Fiat Argo interior and…

There are many ways in which Fiats have stood out over time: innovation, good looks, spaciousness, charm and value-for-money. You’ll notice that one of the things not on this list is interior design, with Fiat interiors more often than not being just a sea of gray plastic (notable exceptions include the 500 range, especially the original small 500, and cars like the mid-1990s Coupe and Barchetta). Given the lack of form in this respect it makes sense that Fiat would look elsewhere in the industry for inspiration for the interior of the newly-revealed Argo, and what better place to look than at the carmaker that is seen by many as leading the industry in terms of interior design (if not always quality).

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