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It is no secret that buyers are gobbling up SUVs and crossovers, nor is it that automakers are introducing new and redesigned models. Take a look at the New York Auto Show this week where a number a new models (Toyota RAV4 and Subaru Forester) and concepts (Lincoln Aviator) made their debut. According to automotive consultancy firm LMC Automotive, there are currently 63 mainstream crossover and SUV models, and 53 luxury models. By 2023, LMC is projecting 90 models for both mainstream and luxury. But this prompts a question - how much is too much? “I think everyone has read the same tea leaves - right now there seems to be insatiable demand,” said Cadillac president Johan de Nysschen to Reuters. “Everyone is going into these segments with compelling new entries and that means there are going to be winners and there are going to be losers.” Already, there are signs this boom could be heading downward. LMC Automotive is forecasting a slow growth for SUVs and crossovers in 2018 and continuing through 2025. “There are still some legs left to grow in the SUV market, but growth is slowing and will eventually level off. This is a bright spot in the market, which is why everyone is flocking to it with new product,” said Jeff Schuster, LMC’s senior vice president of forecasting. A key reason comes down to the large number of SUV and crossovers that will be going off-lease and entering the market, proving a less expensive option for buyers. Cox Automotive forecasts that 40 percent of the roughly 4 million nearly new vehicles expected to come off lease this year will be SUVs and crossovers. The number is expected to rise to 44 percent. “Now that you’re seeing more SUVs starting to come off lease, that will automatically put pressure on new SUV pricing,” said Karl Brauer, executive publisher forKelley Blue Book. There are those who don't buy this argument though. Sam Fiorani, vice president of global vehicle forecasting with AutoForecast Solutions says there is still room to grow if automakers dive into different niches such as sporty models and limited editions. “The market is not yet saturated and there are all kinds of niches that have yet to be filled. We’re five or 10 years from even thinking about market saturation.” Various automakers claim there is always more room for products, provided they can stand out. “There are clearly a lot of entrants, but we are going to differentiate ourselves with a completely different look to our brand," said Lincoln president Joy Falotico at the New York Auto Show. But Karl Brauer points out a simple fact: “Simple math suggests that you’ll have more models with lower volume.” “You can’t have that many SUVs on the market and have all of them grow volume. Some of them are going to have to give,” explained Brauer. Source: Reuters View full article -
Automakers Plan to Flood the Market with SUVs and Crossovers
William Maley posted an article in Automotive Industry
It is no secret that buyers are gobbling up SUVs and crossovers, nor is it that automakers are introducing new and redesigned models. Take a look at the New York Auto Show this week where a number a new models (Toyota RAV4 and Subaru Forester) and concepts (Lincoln Aviator) made their debut. According to automotive consultancy firm LMC Automotive, there are currently 63 mainstream crossover and SUV models, and 53 luxury models. By 2023, LMC is projecting 90 models for both mainstream and luxury. But this prompts a question - how much is too much? “I think everyone has read the same tea leaves - right now there seems to be insatiable demand,” said Cadillac president Johan de Nysschen to Reuters. “Everyone is going into these segments with compelling new entries and that means there are going to be winners and there are going to be losers.” Already, there are signs this boom could be heading downward. LMC Automotive is forecasting a slow growth for SUVs and crossovers in 2018 and continuing through 2025. “There are still some legs left to grow in the SUV market, but growth is slowing and will eventually level off. This is a bright spot in the market, which is why everyone is flocking to it with new product,” said Jeff Schuster, LMC’s senior vice president of forecasting. A key reason comes down to the large number of SUV and crossovers that will be going off-lease and entering the market, proving a less expensive option for buyers. Cox Automotive forecasts that 40 percent of the roughly 4 million nearly new vehicles expected to come off lease this year will be SUVs and crossovers. The number is expected to rise to 44 percent. “Now that you’re seeing more SUVs starting to come off lease, that will automatically put pressure on new SUV pricing,” said Karl Brauer, executive publisher forKelley Blue Book. There are those who don't buy this argument though. Sam Fiorani, vice president of global vehicle forecasting with AutoForecast Solutions says there is still room to grow if automakers dive into different niches such as sporty models and limited editions. “The market is not yet saturated and there are all kinds of niches that have yet to be filled. We’re five or 10 years from even thinking about market saturation.” Various automakers claim there is always more room for products, provided they can stand out. “There are clearly a lot of entrants, but we are going to differentiate ourselves with a completely different look to our brand," said Lincoln president Joy Falotico at the New York Auto Show. But Karl Brauer points out a simple fact: “Simple math suggests that you’ll have more models with lower volume.” “You can’t have that many SUVs on the market and have all of them grow volume. Some of them are going to have to give,” explained Brauer. Source: Reuters -
Between now and 2022, at least 50 electric vehicles will be launched. They'll be coming from the likes of Volkswagen, Diamler, and General Motors. Heck, even Dyson is getting into the game. But why this rush to get EVs on the road? It comes down to two things, Tesla and upcoming regulations. “Nobody doubts that the future will be electric. The car companies dragged their feet with electric. Now they are being dragged into it by Tesla and by regulations,” said Erich Joachimsthaler, founder and CEO of brand-strategy firm Vivaldi to Bloomberg. Tesla makes sense as they have created a cult of personality with rabid fans and somehow selling vehicles like hotcakes. As for the regulations, various countries such as France and Great Britain have announced bans on internal combustion engines in new vehicles in the near future. Other places such as China and the state of California are considering similar bans. China has also introduced regulations meant to cut emissions and pollution by 2030. One of those is for automakers to sell a certain percentage of "of so-called new-energy vehicles -- which include electric cars" to obtain credits to sell models with internal combustion engines. But there are questions about this move. For one, how is any automaker going to make money with EVs? At the moment GM loses $9,000 for every Chevrolet Bolt EV sold, while Fiat Chrysler Automobiles loses an eye-watering $20,000 on each Fiat 500e sold. Battery tech is one of the key reasons for this, but new technologies and improvements are helping bring the price down. Also, will consumers embrace this onslaught of EVs? Last year, EVs only made up less than one percent of the U.S. market. “Companies are committed to electric cars, but there is little evidence that there is a lot of consumer demand for it,” said Kevin Tynan, senior analyst with Bloomberg Intelligence. Source: Bloomberg- 31 comments
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Between now and 2022, at least 50 electric vehicles will be launched. They'll be coming from the likes of Volkswagen, Diamler, and General Motors. Heck, even Dyson is getting into the game. But why this rush to get EVs on the road? It comes down to two things, Tesla and upcoming regulations. “Nobody doubts that the future will be electric. The car companies dragged their feet with electric. Now they are being dragged into it by Tesla and by regulations,” said Erich Joachimsthaler, founder and CEO of brand-strategy firm Vivaldi to Bloomberg. Tesla makes sense as they have created a cult of personality with rabid fans and somehow selling vehicles like hotcakes. As for the regulations, various countries such as France and Great Britain have announced bans on internal combustion engines in new vehicles in the near future. Other places such as China and the state of California are considering similar bans. China has also introduced regulations meant to cut emissions and pollution by 2030. One of those is for automakers to sell a certain percentage of "of so-called new-energy vehicles -- which include electric cars" to obtain credits to sell models with internal combustion engines. But there are questions about this move. For one, how is any automaker going to make money with EVs? At the moment GM loses $9,000 for every Chevrolet Bolt EV sold, while Fiat Chrysler Automobiles loses an eye-watering $20,000 on each Fiat 500e sold. Battery tech is one of the key reasons for this, but new technologies and improvements are helping bring the price down. Also, will consumers embrace this onslaught of EVs? Last year, EVs only made up less than one percent of the U.S. market. “Companies are committed to electric cars, but there is little evidence that there is a lot of consumer demand for it,” said Kevin Tynan, senior analyst with Bloomberg Intelligence. Source: Bloomberg View full article
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Volvo's owner, Geely is planning to enter Europe and U.S. in the coming years. Reuters reports that Geely will building a new crossover based on the Compact Modular Architecture - a platform that Geely and Volvo have been working together. Along with new engine technology, this car will launch in China in 2017. The crossover will then head into several Europe markets a year later, followed by the U.S. in due time. "With the CMA car, Li wants to tell the world we're ready for the big time. We're ready to break into Europe and the U.S.," a source told Reuters. The new crossover was designed with the U.S. market in mind. But before Geely plans on sending it to the U.S., it will sell the crossover in Spain, Portugal, Italy, Britain, and Eastern Europe. "Those markets, Britain in particular, are open to foreign cars, while northern Europe, France and Germany are not," a source said. While the Chinese market will get a gasoline variant, Europe and the U.S. will get a alternative-fuel model, possibly a plug-in hybrid. The goal with this is to make Geely seen as a maker of affordable, high-tech cars. "It's an effort to burnish our brand before we bring out more mainstream gasoline-fueled cars to Europe and eventually to the U.S.," Source: Reuters View full article
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Rumorpile: Geely Plans A Push Into Europe and U.S.
William Maley posted an article in Automotive Industry
Volvo's owner, Geely is planning to enter Europe and U.S. in the coming years. Reuters reports that Geely will building a new crossover based on the Compact Modular Architecture - a platform that Geely and Volvo have been working together. Along with new engine technology, this car will launch in China in 2017. The crossover will then head into several Europe markets a year later, followed by the U.S. in due time. "With the CMA car, Li wants to tell the world we're ready for the big time. We're ready to break into Europe and the U.S.," a source told Reuters. The new crossover was designed with the U.S. market in mind. But before Geely plans on sending it to the U.S., it will sell the crossover in Spain, Portugal, Italy, Britain, and Eastern Europe. "Those markets, Britain in particular, are open to foreign cars, while northern Europe, France and Germany are not," a source said. While the Chinese market will get a gasoline variant, Europe and the U.S. will get a alternative-fuel model, possibly a plug-in hybrid. The goal with this is to make Geely seen as a maker of affordable, high-tech cars. "It's an effort to burnish our brand before we bring out more mainstream gasoline-fueled cars to Europe and eventually to the U.S.," Source: Reuters -
William Maley Staff Writer - CheersandGears.com July 3, 2013 Ten years ago, Toyota introduced a new brand that promised young buyers fun and funky vehicles. That brand was Scion. Today, Scion is in a bit of a struggle. Originally conceived as a brand for young buyers, Scion has struggled to keep them in the fold. According to The Detroit News, 15 percent of Scion customers are under age 35. Meanwhile, 14 percent of Scion customers “We’re still a good 15 years or more below the average industry age,” said Scion chief Doug Murtha. While that is true, that number has been shrinking. In 2008, more than 20 percent of Scion customers were under 35 and less than 8 percent were 65 or older. Sales aren't looking so good either for Scion. In 2006, the brand had its best sales with more than 173,000 vehicles. Last year, the brand only sold just 74,000 vehicles. Most of Scion's lineup is languishing on the lot except for the FR-S which has been the only model that has been performing well. “Their market share topped out in 2006. Since then, it’s kind of fizzled and it’s just been dragging along the bottom. They have a nasty habit of putting out cars that have a limited mass-market appeal,” said Jeremy Acevedo, an analyst with Edmunds.com. That has been a Scion hallmark since the introduction of the brand back in 2003. Offering vehicles vehicles that appeal to a small audience, not the mass-market. One that Murtha says the brand will solider on with. “We’re going to continue to throw stuff out there that we might not do under the Toyota badge and see if it sticks. We’re trying to provide a lineup of products that are not for everybody.” The only difference is that Scion will focus on being a niche player, not as a stepping stone into the Toyota lineup. Source: The Detroit News William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
William Maley Staff Writer - CheersandGears.com July 3, 2013 Ten years ago, Toyota introduced a new brand that promised young buyers fun and funky vehicles. That brand was Scion. Today, Scion is in a bit of a struggle. Originally conceived as a brand for young buyers, Scion has struggled to keep them in the fold. According to The Detroit News, 15 percent of Scion customers are under age 35. Meanwhile, 14 percent of Scion customers “We’re still a good 15 years or more below the average industry age,” said Scion chief Doug Murtha. While that is true, that number has been shrinking. In 2008, more than 20 percent of Scion customers were under 35 and less than 8 percent were 65 or older. Sales aren't looking so good either for Scion. In 2006, the brand had its best sales with more than 173,000 vehicles. Last year, the brand only sold just 74,000 vehicles. Most of Scion's lineup is languishing on the lot except for the FR-S which has been the only model that has been performing well. “Their market share topped out in 2006. Since then, it’s kind of fizzled and it’s just been dragging along the bottom. They have a nasty habit of putting out cars that have a limited mass-market appeal,” said Jeremy Acevedo, an analyst with Edmunds.com. That has been a Scion hallmark since the introduction of the brand back in 2003. Offering vehicles vehicles that appeal to a small audience, not the mass-market. One that Murtha says the brand will solider on with. “We’re going to continue to throw stuff out there that we might not do under the Toyota badge and see if it sticks. We’re trying to provide a lineup of products that are not for everybody.” The only difference is that Scion will focus on being a niche player, not as a stepping stone into the Toyota lineup. Source: The Detroit News William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
