The past year has seen an interesting development in the arena of exotic and ultra-luxurious cars – the emergence of smaller-engined versions of cars that were previously available only with super-high-output 12-cylinder options. First was the facelifted Ferrari FF, now called the GTC4 Lusso, which in addition to the all-wheel-drive V12 version became available as an “entry level” model with rear-wheel-drive, powered by a turbocharged V8 engine taken from the 488 GTB and California T. Then Bentley released the oft-rumored Bentayga powered by, the sacrilege, a V8 turbodiesel seemingly taken straight out of the Audi SQ7. Are they a sign of things to come, smart decisions by the brands from a marketing perspective, or foolish endeavors to chase short-term profits at the expense of the brands’ long-term allure?
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This week it became apparent that PSA Peugeot-Citroën and General Motors are having talks about the possible takeover of GM’s European division by the French automaker. This includes the Opel and Vauxhall brands, which have been a decade-long money drain on General Motors. The two automakers have been working together closely on the development of a handful of models and are looking for opportunities to boost each company’s profitability, which includes a sale of the two brands. GM has had a stake in PSA until 2013 when it became apparent that projected savings from their cooperation and platform sharing would fall short of expectations. After this breakup, the French company had to be bailed out by the French government and its Chinese partner Dongfeng Motor, which each control 14% of the shares.
Would a new, more intense cooperation bring the promised synergies? And does this mark the start of a much-needed wave of consolidations in the European car market? Or will it only cause PSA to lose focus on its own financial recovery and resurrection of its brands? Let’s look a the pros and cons for both parties involved:
Yesterday Hyundai announced that the Ioniq Hybrid will cost around $23,000 when it goes on sale in the US, which makes it some $2,000 cheaper than its main competitor, Toyota Prius. In addition, the Hyundai can claim to be considerably more efficient than the Toyota, at least on paper, promising 58 mpg combined to the latter’s 52 mpg. So far things look promising for the Hyundai, but can it really succeed where the likes of Honda Insight failed?
Looking ahead, even one year, can be very tricky. Last year we nominated two brands as potentially doing well in 2016, and ended up being only half right: we correctly predicted Volvo‘s growth, but thought that Buick would do better than barely out-performing the market. We did even less well when predicting the disappointments of 2016 – both Cadillac‘s and Mitsubishi‘s sales in 2016 were not great, but still better than for many of their competitors. Cadillac’s sales may have fallen by 1.9 percent compared to 2015, but the brand still did better than Lexus (down 3.9 percent), Acura (down 8.9 percent) or BMW (down 9.5 percent). Mitsubishi did even better, with sales actually rising by 1.0 percent compared to 2015, better than many more fancied brands such as Mazda (sales down 6.7 percent), Chevrolet (down 1.4 percent), Toyota (down 0.7 percent) or Ford (down 0.6 percent). Time will tell whether we do better this time around!
1. Honda: success
Honda had a very good 2016, with growth its growth of 4.8 percent handily out-pacing the decline in sales among the three brands ahead of it (Ford, Chevrolet and Toyota). This performance came from the sales growth in two new mainstream models: the Civic (sales up 9.4 percent) and HR-V (sales up 95.5 percent). The reason we can expect the good times to continue at Honda is that for 2017 it has three new models: CR-V (revealed in the fall of 2016), Odyssey (revealed in Detroit this week) and Accord (to be revealed soon). Of the three, Civic and Accord regularly rank in the top 10 of model sales, with the Odyssey adding another 100k+ of sales each year – it should thus be reasonable for Honda’s sales to go up significantly once all of those models hit the market.
We’ve discussed the 2016 success stories and disappointments of the Chinese car market, now we’ll focus on our expectations for 2017, like we’ve done for Europe. Looking ahead, even one year, can be very tricky. Last year we predicted EVs and PHEVs in China to continue their boom. From January to November 2016 sales of New Energy vehicles increased 102% in a market up 18%, to 282.292 units, including 41.796 in November alone. Pure electric car sales were the bulk of that volume with 208.839 units, an increase of 145%, while plug-in hybrid sales increased 35% to 73.453 units. And the good news is that although electric minicars/citycars still make up the bulk of China’s pure EV sales (62,2%), the real growth comes from the compact EV segment with sales up almost 9-fold. We also predicted two disappointments for 2016: DS and Volkswagen. DS was a no-brainer and you can read in our disappointments article, and for Volkswagen we said it would have to get used to single digit growth but the brand has shown remarkable resilience and has managed to grow 12,7% through November. While that’s still slower than the overall market, keep in mind the brand has completely missed the crossover hype in the same way PSA has, but it sedan-heavy line-up has continued to sell well. VW has launched 3 new nameplates in 2016: the Sportsvan has outsold its rival BMW 2-Series by almost 3-to-1, the Phideon is more of an image booster than a volume model at 800 monthly sales, but the C-Trek is the most promising with 5.600 sales in its first month.
1. Jeep: success
Like DS was last year, Jeep is a no-brainer here. The American SUV brand could easily have been mentioned among our success stories of 2016, as it has sold well over 100.000 units in its first year of local production in China, peaking at over 16.000 sales in November with its two models: Cherokee and Renegade. That puts the brand ahead of Cadillac, which did get a mention as one of the most successful brands in China last year. [Read more…]
A new year is always a nice opportunity to reflect on the past year and in our case, that means looking at which cars have sold disappointingly in 2016 in China. We’ve already covered the surprises and disappointments in Europe as well as the surprises and disappointments in the US and the Chinese success stories of 2016, now let’s take a look at the Chinese disappointments. We’ll make our predictions for 2017 in a separate article. In a market that has grown 18% in the first 11 months of the year, it should be hard to find true losers, but still there are a few. I won’t even mention the biggest loser of all: Fiat with sales down 58,6% because the Italian brand simply isn’t relevant in China, with just 0,06% market share.
Last year, we predicted Peugeot-Citroën’s luxury brand DS would be on this list. And even though it was already down in volume last year, DS managed to underwhelm even our lowest expectations for 2016. In its third full year of sales, it’s down for the second consecutive year, and not by a small margin: -22,5% through November. None of its models has improved on last year, and its latest launch DS 4S has failed miserably with just 1.435 sales in 9 months, peaking at 276 sales in September. Whoever thought launching a premium hatchback in China would be a great idea deserves to be fired on the spot. Then again, the DS6 crossover is also down 22,5% but still by far the brand’s best selling model.
Sadly for the French, DS is not their only brand to suffer from poor product planning, and a lack of new products: Peugeot‘s only new model has arrived too late to make a mark, the 4008 (also known as the new generation 3008 in Europe) started sales in the fourth quarter and couldn’t prevent the French brand from losing 17,1% through November in a market up 18,8%. [Read more…]
A new year is always a nice opportunity to reflect on the past year and in our case, that means looking at which cars have sold surprisingly well China in 2016 and which do we expect to surprise in 2017. We’ll also look at which cars or brands have disappointed from a sales volume point of view in a separate article. Click the following links to check back on last year’s surprises or disappointments. Also find our success stories for 2016 in the US and Europe and our predictions for China in 2017.
1. Domestic crossovers
I’m short of superlatives to describe how sales of domestic brand crossovers in China have exploded in 2016. More than 5 million domestic Chinese crossovers were sold in the first 2016, that’s more than the entire car markets of Germany and Spain combined! In a market up 17%, crossovers and SUVs from Chinese brands increased their sales by 50,6%. In comparison: sales of import brand crossovers increased 29%, faster than the overall market but just over half the growth rate of their domestic rivals. This also means that the share of Chinese brands in the crossover segment grew to 57,4%, much higher than their share of the overall market, which also grew to an all-time high of 37,3%. The share of domestic brand crossovers and SUVs in the overall market grew from 16,3% in 2015 to 21,4% in 2016. The cause of this impressive surge? A flood of hot new models, aimed directly at the needs and desires of the Chinese new car buyer, with prices so low import brands can’t match them and ever-improving design and quality, both exterior and interior, and most equipped with ever-larger infotainment touch screens on top of the center console. No less than 29 new nameplates were introduced in the first 11 months of 2016, of which 3 from all-new brands: Borgward, SWM and Hanteng.
Looking ahead, even one year, can be very tricky. Last year we correctly predicted that Mercedes-Benz had a shot at reclaiming its luxury crown, and it has overperformed. We also said the Jaguar F-Pace would be off to a great start, and that too has materialized nicely: having been launched in Q2 of 2016, Jaguar’s first crossover has outsold the Porsche Macan and BMW X4 in the second half of the year and has outsold the Lexus NX for full-year sales, grabbing a segment 7th place in H2, which is similar to the XE and not bad for a brand’s first entry into a segment that has very strong competition not only from new launches but also from surprisingly consistent old-timers.
In terms of expected disappointments, we predicted Ford would lose its #2 position in the brand ranking, and that happened in November when Renault stormed past in the YTD ranking. We also said Dacia would lose volume in 2016, but that didn’t materialize as expected. The French-Romanian brand has shown remarkable resilience as four out of its five models improved volume in 2016, despite no big new product launches, just minor updates. An impressive performance! Lastly, we doubted Infiniti’s ambitious targets for the Q30 and QX30, and although the latter is still in start-up mode, it’s safe to say the Q30 hasn’t really taken off as its parent had hoped it would. Sure, around 9.000 sales (8.391 through November) is by far the best any Infiniti model has ever sold in Europe (the next best being the Q50’s 2015 figure of just over 3.000 units), but it’s not even close to the European target of 30.000 annual sales for the two models combined.
Now, what do we expect from 2017? [Read more…]
After looking at the Success stories of 2016 in the US, Success stories of 2016 in Europe and Disappointments of 2016 in Europe, it’s time to look at who put in disappointing performances in the US in 2016. Coming soon – our predictions for 2017.
1. Mainstream and premium sedan segments
As some readers have pointed out, 2016 was definitely the year of the SUV/crossover. However, there is more to that story, as customers flocking to buy such cars abandoned the more traditional segments in droves, both for mainstream and premium brands. Overall, sales in the mainstream non-SUV sectors fell by 6 percent in the first three quarters of the year compared to 2015, while those in the premium non-SUV sectors fell by over 13 percent. Brands caught in this whirlwind include Mazda (sales down 7.2 percent through November), BMW (down 10.4 percent) and Acura (down 10.6 percent). Looking a bit closer, we see that some models which feature at the head of the segments were hit particularly hard: Toyota Camry (down 9.4 percent), Ford Fusion (down 10.2 percent), Mercedes-Benz C class (down 11.7 percent) or the ubiquitous BMW 3/4 series (down 28.2 percent). With SUVs/crossovers going from strength to strength, it’s unclear whether this trend will reverse anytime soon.
A new year is always a nice opportunity to reflect on the past year and in our case, that means looking at which cars have sold disappointingly in 2016. We’ve already looked at which cars or brands have surprised in 2016 from a sales volume point of view in a separate article, as well as successes and disappointments in the US.
1. Jaguar XE
When Jaguar launched the XE in 2015, expectations were high, as this was Jaguar’s second attempt at the premium midsized segment, and arguably a much better attempt than the first try: the X-Type. A lot has been critisized about the X-Type: it was too much Ford Mondeo, had too conservative styling and it was an utter failure. About that last point: they sold over 400.000 of them worldwide, half of which in Europe, over a 9-year life cycle. The model sold almost 31.000 units in its first full year of sales 2002 and peaked at 38.500 sales in 2004 in a segment 5th place behind the German Big-3 and Volvo. Now keep in mind the segment was a bit larger at the time, so let’s translate it to 3,1% of the segment in its first full year and 4,5% of the segment in its peak. 2016 was the first full year of sales for the XE and it took a segment share of 3,5%, slightly better than its supposedly failed predecessor 14 years earlier. It also took just 7th place of the segment, but that’s because Audi and BMW have separated their coupe and convertible models from the sedan and wagon versions. Jaguar is still best of the rest behind the Germans and Volvo. One could argue the F-Pace crossover may be cannibalizing, but there’s hardly any overlap in price between those two models, and a counterargument could be that the F-Pace is raking in extra attention to the brand and drawing people into its showrooms who may not have known about the XE otherwise. In its defense: there’s no station wagon version of the XE available (yet). So at first glance not a huge success, but nor is the XE’s first full year a clear-cut disappointment, then why is it on this list? Well, for one because it lost year-over-year volume in every month of the second half of the year, which is not a promising sign for a model in only its first full year of sales, and secondly because it was outsold by the Alfa Romeo Giulia in November and likely in December too, again not a great sign of what’s to come for the XE.