State of the Automotive Industry - US - July 2009

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Consumer survey data
• Advertising creative
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Domestic new car unit sales losing ground to imports
• Federal regulations, programs forcing U.S. automakers to change
• Cash for Clunkers
• Climate change legislation
• Push for electric vehicles
• After gradual declines, dealership revenues plummet starting in 2008
• U.S. dealership units in continual freefall over the past 21 years
• Advertising budgets suffering from federal regulation, declining sales
• Federal Regulatory Measures: How They will Shape Selling Cars into the Future
• Overview
• Cash for Clunkers
• What it means
• Climate change bill to double federal loans for plug-in electrics
• What it means for electrics and hybrids
• New proposals to address tire fuel efficiency
• What it means
• Market Size
• Key points
• Domestic new car unit sales losing ground to imports
  • Figure 3: Total U.S. unit car sales, by domestic and import, 2003-08
  • Figure 4: Total U.S. car unit sales, 2003-08
• Imports Versus Domestics
• Key points
• Import production volume to increase while domestic slowing by 2012
• By mid-2009, domestics losing market share to foreign automakers
  • Figure 5: U.S. unit sales of light vehicles, January-June 2008 and 2009
• Domestics--General Motors Corporation
• Key points
• Overview
• Dealing with an image problem
• Renewed focus on hybrids, electrics
• North American GM sales fell 23% in 2008
  • Figure 6: GM total North America automotive sales revenue, 2006-08
  • Figure 7: GM North America vehicle unit sales, by car and truck, 2006-08
• Domestics--Chrysler LLC
• Key points
• Overview
• Sales down 46% in Q1 2009
• Incentives include employee pricing, 0% financing
• New vehicles stunted for 2009, but new model launches for late 2010
  • Figure 8: Chrysler U.S. vehicle unit sales, 2005-08
• Domestics--Ford Motor Company
• Key points
• Overview
• Mounting debt forcing company to pursue more innovative vehicles
• Ford dealerships launch campaigns to rectify consumer perception
• Ford revenues drop nearly 24% in 2008 from previous year
  • Figure 9: Ford total North America automotive sales revenue, 2006-08
  • Figure 10: Ford U.S. vehicle unit sales, 2005-08
• American Pride: Patriotism in a Recession
• Key points
• Who are consumers with American Pride?
• American Pride is reflected the most by large trucks, SUVs, not compacts
  • Figure 11: Vehicle ownership, by American Pride, February 2009
• American Pride respondents more influenced by personal recommenders
  • Figure 12: Research preference, by American Pride, February 2009
• Economy fears translate mainly to sticker price, less to fuel economy
  • Figure 13: Vehicle feature preference, by American Pride, February 2009
• Imports
• Key points
• Import unit sales rising while domestic sales on the decline
• U.S. luxury market threatened by small, crossover imports
• Toyota Motor Co.
• A leader in hybrid technology, design
• Toyota' s unit car sales in U.S. increased 5.3% in 2008 from four years prior
  • Figure 14: Toyota Motor Sales U.S.A.' s U.S. vehicle unit sales, 2005-08
• Honda Motor Co.
• Competing against Toyota' s Prius with the Insight
• Honda' s unit car sales in U.S. increased 4.7% in 2008 from four years prior
  • Figure 15: Honda' s U.S. vehicle unit sales, 2005-08
• Nissan Motor Co.
• Nissan planning to mass-market electric cars
• New Cube marketed to young drivers
• Unit car sales in U.S. increased 3.7% in 2008 from four years prior
  • Figure 16: Nissan North America' s U.S. vehicle unit sales, 2005-08
• Hyundai Motor Co.
• A push for hybrids, electrics
  • Figure 17: Hyundai U.S. vehicle unit sales, 2005-08
• Retail Distribution
• Key points
• After gradual declines, dealership revenues plummet starting in 2008
  • Figure 18: Total sales at new car dealerships, at current prices, 2003-09
  • Figure 19: Total sales at new car dealership, at inflation-adjusted prices, 2003-09
• U.S. dealership units in continual freefall over the past 21 years
  • Figure 20: U.S. new car dealerships, 1987-2008
• New vehicle sales dominate, but losing slight market share to used
  • Figure 21: U.S. sales at new car dealerships, by segment, 2005 and 2007
• Where consumers are buying cars now
  • Figure 22: Source of last new vehicle purchased, by gender, February 2009
• Younger consumers more open to non-traditional channels
  • Figure 23: Source of last new vehicle purchased, by age, February 2009
• Highest household incomes prefer brand dealerships
  • Figure 24: Source of last new vehicle purchased, by household income, February 2009
• Exclusive brand dealerships rated highest among all groups
  • Figure 25: New vehicle retail preference, by race/Hispanic origin, February 2009
• Dead Automotive Brands: Where Are They Now?
• Overview
• Hummer
• Pontiac
• Porsche
• Saab
• Saturn
• Innovations and Innovators
• Parts suppliers rate domestics far behind imports in product innovation
  • Figure 26: Automotive parts supplier ranking of automaker innovations, 2009
• Kia finds opportunity in chaotic Saturn closings to widen brand' s territories
• Hyundai uses bartering to its advantage to avoid losses from liquidation
• Toyota combines television product placement, text message interaction
• Ford creates program to help consumers navigate CARS program
• Online research site targets women car buyers through tailored features
• Dealership website launched to help stem consumer financing fears
• Advertising and Promotion
• Advertising budgets suffering from federal regulation, declining sales
  • Figure 27: Automaker and auto dealership adspend on U.S. media, 2003-08
• GM, Chrysler scale back adspend considerably due to bankruptcies, debt
• Digital media investment stable, source of creative marketing endeavors
  • Figure 28: Online advertising by the U.S. automotive industry, 2007-12
• GM, Chrysler forced to tone down advertising to address bankruptcies
• Appendix: Trade Associations