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Posts Tagged ‘Automobile Industry’

Media Research Continued

In Business, cars, Technology, Writing (all kinds) on August 9, 2016 at 3:00 AM

Here is more research on the automobile industry done with the Media Research Institute:

Read the rest of this entry »

Book Review: Dennis DesRosiers’ The Best of Observations

In Beauty, book reviews, Business, cars, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on June 29, 2012 at 3:00 AM

Dennis DesRosiers is Owner of DesRosiers Automotive Consultants – Photo Courtesy of Dennis DesRosiers

Image result for Dennis DesRosiers is Owner of DesRosiers Automotive Consultants

By Rachel Muenz

Apart from working in auto parts factories for a couple of summers, I have little knowledge or interest in the Canadian automotive industry. But, I found Dennis DesRosiers’ collection of articles on this topic not only informative but also quite fascinating at times.

DesRosiers, who heads DesRosiers Automotive Consultants Inc., is said to be one of Canada’s most prominent automotive industry analysts. His monthly “Observations” columns have looked at trends and problems in various sectors of the auto industry for almost 20 years. The Best of Observations, as the title suggests, is a collection of the best of these columns from the early 1990s to 2009. Though clearly meant for those who work and or invest in the auto industry, The Best of Observations is also a great read for the average person.

The articles are organized into nine sections which cover each sector of the Canadian auto industry as well as market outlook, strategy and policy issues.

DesRosiers provides his thoughts on where each of these areas is going, a bit of the history involved, problems and blunders in the industry and what he believes are the best ways to fix them. He supports these points well with both hard data and some ballpark guesses. Though these facts and figures can be boring at times they’re mostly presented in a way readers can relate to. Overall, the book is not data-heavy and is an easy and engaging read.

The language is straightforward though often lively with a dash of humour as well. DesRosiers clearly loves what he does and is passionate about the auto industry and this shines through in his writing. But, the book does have a bit of industry lingo and business acronyms which sent me off on some Google searches – OEM, for example, stands for “original equipment manufacturer.”

Also, the book can sometimes be repetitive since there is some overlap between articles. For example, the fact that most vehicles lasted around 150,000 km in the 1960s and now last around 300,000 km today is mentioned often throughout the collection.

Yet, as a whole, a little repetition doesn’t take away from the important insights in this book.

In particular, I found the articles on the recent crash of the Detroit Three automakers the most enlightening. DesRosiers examines how and why the decline happened, what he thinks of how it’s being addressed, what else should be done to improve these manufacturer’s fortunes and how things are likely to play out in the industry. And, while DesRosiers is realistic he also leaves us with the feeling that all hope is not lost for the auto industry.

However, though the older articles give an idea of how past trends are affecting the present, they may not interest everyone. Also, because the articles are not always in chronological order in their respective sections, this might make it difficult for some readers to see how some of the past articles connect to the present.

That small complaint aside, DesRosiers is also not afraid to make controversial statements, resulting in some very interesting arguments.

For example, when leasing was popular for both auto dealers and consumers in the 1990s, he wrote that for most consumers it is a terrible idea. Through solid numbers and examples he shows that leasing a car, while it can be a good idea in the short-term, actually costs more in the long-term than getting a car loan. Prospective vehicle buyers should find this section very useful in figuring out when it’s a good idea to lease.

The more recent articles in the book also have some very compelling points about fuel efficiency.

DesRosiers argues that government targets for fuel efficiency are impossible for automakers to meet by the 2020 deadline. He shows that an improvement of about 10 per cent in fuel efficiency has taken 25 years to achieve in the Canadian auto industry. Therefore, making a greater improvement in 12 years is just not feasible.

His main criticism of these government environmental policies is that they target automakers when consumers are also to blame for poor fuel efficiency. DesRosiers also points out that, considering the weak economy, governments should give automakers a chance to recover before making them tackle fuel efficiency. While environmentalists might not like the suggestion of putting money before fuel efficiency, DesRosiers does have a point. You do need money to invest in clean technology, after all.

In the end, this book has a lot of valuable information about the Canadian auto industry and makes you think about the changes and policies meant to improve it. Whether you want to be a better consumer, want to know what the future holds for the auto industry or you just want something intelligent to read, you’ll likely find something to enjoy in this collection.

SUBARU CANADA: BEST NOVEMBER SALES ON RECORD

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on December 16, 2010 at 1:00 AM

Photo Courtesy of Google Images

Image result for Subaru

Sales surpass 25,000 units for best year ever

MISSISSAUGA, ON, Dec. 1 /CNW/ – Subaru Canada, Inc. (SCI) is thrilled to announce that sales of its lineup of Subaru symmetrical full-time All-Wheel Drive vehicles have set a new record for November as well as a new milestone in company history. Total sales climbed to 2,567 units, up 15.9 percent over last November. These record-breaking results also catapulted Subaru over the 25,000-unit mark, making 2010 the best year in company history with still another month left to continue the momentum. Year-to-date sales are up 20.7 percent, fortifying Subaru Canada’s position as the fastest growing Japanese manufacturer in Canada for 2010.

Strong sales of Forester and Outback contributed to the best November ever for both models: Forester sales rose by 32.6 percent over the same month last year, also making this past month the best one on record for this true SUV. Similarly, sales were up 27.5 percent over last November for the 2011 Outback, which was recently named Auto123.com’s Wagon of the Year for the second year in a row.

“Canadians have embraced our vehicle lineup because it offers a compelling blend of excitement, efficiency, safety, quality, and reliability – in all seasons and under all road conditions,” said Shiro Ohta, president, and CEO of SCI. “We remain committed to building vehicles that will resonate with drivers who value their time behind the wheel.”

Subaru Canada, Inc. is a wholly owned subsidiary of Fuji Heavy Industries Ltd. of Japan. Headquartered in Mississauga, Ontario, the company markets and distributes Subaru vehicles, parts and accessories through a network of over 85 authorized dealers across Canada.

Decade in Review – Part 44 – WD Store Counts – 2000 to 2009

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on August 26, 2010 at 8:00 AM

Dennis DesRosiers Does A Decade in Review for Cars – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - August 26, 2010

By Dennis DesRosiers

Dennis DesRosiers – August 26, 2010

Attached are store counts for the major WD/Buying Groups in Canada for 2000 to 2009.

Warehouse Distributors/Buying Groups for those not knowledgeable about the aftermarket are the companies that own massive warehouses that distribute aftermarket parts to thousands of wholesalers across Canada ( if in the US they would be called Jobbers and are often called Jobbers north of the border as well ). These wholesalers, in turn, supply the approximately 20 thousand service outlets in Canada and these service outlets operate about 107 thousand service bays. With this many bays to supply you can see why Canada needs so many wholesalers.

We track 11 of these groups although some have consolidated in recent years so there are fewer players than what readily appears. In addition, we consider every new car dealer in Canada a wholesaler as well since they have become very active supplying aftermarket parts into the traditional aftermarket but these are NOT profiled in this analysis.

There has been a relatively slow growth in the number of wholesalers across Canada this past decade although some significant changes for any particular group. In 2000 there were 2,552 ( excluding car dealers ) wholesalers in Canada and in 2009 there were 2,763 wholesalers in Canada a relatively small change. Most WD’s have relatively stable store counts or declining store counts. The exception is Modern Sales Co-op who have seen their counts increase from 172 stores to 338 stores, Lordco out of BC/Alberta who have grown from 61 stores to 119 stores, PartSource who have grown from 27 stores to 87 stores and UniSelect who through acquisition have grown from 690 stores to 713 stores but also own Bumper to Bumper out West who add an additional 98 stores to their total. This makes UniSelect the largest WD in Canada by store count. NAPA with 577 stores would be the second largest WD and Modern Sales Co-op the largest Buying Group.

In my next note, I’ll profile some performance variables for this group of players which will provide a better understanding as to performance by market.

Dennis

ps. I’m still on vacation.

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:
Add me to your address book… Want a signature like this?

State of Canadian Auto Manufacturing … one year later

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on August 25, 2010 at 8:00 AM

Dennis DesRosiers Does A Year In Review For Automobiles – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - August 25, 2010

Dennis DesRosiers – August 25, 2010

By Dennis DesRosiers

Well, it’s been a year now since GM and Chrysler emerged from bankruptcy with a billion of taxpayer dollars in their pockets. I looked at a long list of issues in the industry lately ( I’m on vacation as a write this … call me anal ) and the results with one exception were impressive … let us see now

. GM and Chrysler appear to be making progress out of bankruptcy …. check
. Ford is picking up market share … check
. some import nameplate brands are yielding market position to Detroit … check
. cost of manufacturing vehicles at the Detroit three has been adjusted downward and is now more competitive with the new domestics … check
. the markets in Canada, Mexico, and the USA are slowly returning to normal … check
. we haven’t noticed a supplier failure in months … check
. employment is returning to previous levels … NOT!!

Oh no, say it ain’t so Joe. The most important political variable in the automotive equation and the critical reason that our collective Governments dumped over a hundred $ billion into the Detroit three ( note: Ford got money to help meet new fuel efficiency requirements ) was to arrest declines in jobs. Indeed to increase jobs in the automotive sector. I haven’t looked at the US or Mexico but Statistics Canada has new employment numbers out for the year to date to the end of April and they are ugly … indeed very ugly.

We count four subsectors as part of the automotive manufacturing equation. Assembly of vehicles and automotive parts are at the core but we also put in motor vehicle body and trailer jobs and MTDM jobs ( machine tool die and mold ). Together they peaked at just under 200,000 jobs in Canada in 2001. Today they stand at 123,829 jobs a decline of about 80K and the lowest level since 1982. This is the fifth year in a row that automotive manufacturing employment has declined. The big loss was last year when over 34,000 jobs evaporated and panic reigned in Ottawa and Queen’s Park. But any politician that planned to pull a George Bush and stand on a frigate and announce “mission accomplished” had better wait for the next flight. Employment across all four industry sub-sectors continues to deteriorate this year. Close to 10,000 jobs have been lost compared to the identical period a year ago and remember a year ago the industry was in deep trouble so to be down from the depressed levels of a year ago indicates that the automotive and parts sector in Canada or at least the manufacturing side of the automotive sector is in seriously bad shape.

The assembly sector is the best of the bunch stabilizing at about 36K jobs down a bit from the lost year but no longer in a free fall. Still down over 21K jobs from their peak but at least stable. But the real job producer in this sector has always been the parts producers and they continue their free fall with employment down another 5,000 plus jobs this year. Employment in the parts sector peaked at just over 100 K in 2001 but since that time the auto parts sector has shed over 42,000 jobs with no end in sight.

And very troubling is the fact that one of the core capabilities in our automotive parts sector has always been its close link to the tooling sector and with the auto parts sector in the toilet this has devastated the Canadian tooling sector. The MTDM sector has traditionally been the most stable of our automotive-related manufacturing activities … rarely declining and usually slowly picking up employment. Between 1991 and 2006 this sector grew by 18K jobs to over 28K jobs. Virtually every one of them very highly skilled. Four years later in 2010, it is back to 1991 levels of employment. And most disconcerting is that these are typically the highest skilled jobs in the automotive sector. Canada was never going to be able to hold onto low skilled jobs but high value-added jobs seemed to be saveable. If Canada can’t hang onto high value-added jobs then vehicle and parts manufacturing in this country are in serious trouble.

Politicians should be very worried. We are seeing the willowing away of our vehicle and parts manufacturing sector and I quite frankly don’t see much ability for any politician to stop this. We don’t even know WHY these jobs are disappearing and until we understand this issue then any response by any Government will just be a shot in the dark.

My thoughts on this sunny day written from my secret vacation hideout.

Dennis

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:
Add me to your address book… Want a signature like this?

Green Agenda

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel on May 31, 2010 at 9:45 AM

Dennis Desrosiers – May 31, 2010

The Decade in Review – Part 6 – Entry Level Vehcile Sales‏

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, Writing (all kinds) on January 13, 2010 at 8:48 AM

Dennis Desrosiers – January 13, 2010 – 1

Dennis Desrosiers – January 13, 2010 – 2

Attached are two tables on the entry-level vehicle segments in Canada for 2000 to 2009. One table documents sales by each of the sub-segments within the entry-level market and the other looks at sales by brand.

This is it my friends. The entry-level market defines Canada. Any full line brand that fails in this segment fails in the market. Entry level vehicle accounts for 50.8 percent of total sales in Canada. In some provinces like Quebec, it is well over 60 percent of the market. This is up from only 34.6 percent of the market in the year 2000. Sales volumes peaked in 2008 at 841,147 units and with the serious downturn in the total market, this past year sales dropped back into the mid 700K range. With the number of “B” and ” C” sized vehicles expected this coming decade we also expect this segment to become even more important within the Canadian fabric. It is very possible that this segment could grow to close to sixty percent of sales although this will take a number of years.

Obviously, this segment is the most price sensitive so is the most exposed to a recessionary economy and was one of the segments that were most severely down this past year with an 11.7 percent decline. We expect this segment to outperform the total market as the economy emerges from its problems. Entry-level vehicles also have the highest scrappage rates of any size of the vehicle so when the consumer vacates the market for any length of time we usually see considerable pent-up demand as the fleet on the road age quickly and need replacement. This is the rub from an environmental perspective. Consumers who buy these vehicles get the least amount of lifetime use from them so by doing the right thing from a social policy perspective a consumer actually lowers his value for money. The longest lasting vehicles and thus the best lifetime value are also the least fuel efficient.

But at over fifty percent market share it is also a testament to the environmental friendliness of the Canadian consumer. Vehicle companies offer the most productive in this segment, market this product aggressively and price the product competitively. There is a view by some politicians that the vehicle companies hoist upon the consumer their least fuel-efficient vehicles. The size and growth of entry-level vehicles belies this point of view.

We include in this segment all subcompact and compact cars as well as compact SUV’s and small pickups since both are entry level vehicles within their customer base. Subcompact car share doubled this decade from 3.8 percent of the market to 7.4 percent of the market. Despite the growth in this “B” car segment the compact car segment also increased share slightly growing from 24.6 percent of the market to 26.1 percent of the market. The biggest growth came in the compact sports utility segment which more than tripled in size increasing from only 4.4 percent of the market to 14.5 percent of the market. Yes, Canadians like their SUV’s but they buy the most fuel-efficient ones. The small pickup market is rather tiny in Canada accounting for only 2.9 percent of the market although this sub-segment is also up this decade ( from 1.7 percent share in 2000 ). This segment also shows how responsible Canadian consumers are with many buying into the pick-up truck market at the entry level instead of the full-size level.

Individual brand sales were marked by huge success and or huge failure this past decade. The most successful company from a percentage improvement point of view was Nissan who’s sales in this segment increased by 266.0 percent this decade. They were closely followed by Subaru up 249.8 percent and Hyundai up 185.0 percent and Kia up 137.0 percent. Although Toyota wasn’t the leader in percentage increase they were number one in the entry level market with 135K units and an 18.2 percent share. Honda was in second place with a 12.9 percent share and Hyundai was in third place with an 11.8 percent share. Ford and GM held onto their double-digit market share position with Ford at a 10.7 share and GM at a 10.6 percent share.

GM was the big loser in this segment dropping from first place to fifth place in market position and losing a third of their volume this decade. GM peaked at 153K units but sold only 79K units in 2009 a devastating loss in volume and market share. Most of this loss came in the past year with GM’s sales in this segment down by 43.8 percent. Chrysler also was a major failure in this segment losing more than half their market share a decline from 9.9 percent of the entry-level market in 2000 to only 4.4 percent in 2009 and eight places amongst the various brands. Ford started the decade with an 11.4 share, fell to as low as a 9.0 share but came back strong at decade end and finished with a 10.7 percent share.

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:

The Decade in Review – Part 5 – The Number of New Vehicle Dealers‏

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, Writing (all kinds) on January 11, 2010 at 9:28 AM

Dennis Desrosiers – January 11, 2010

Attached are new car dealer counts by brand for the decade. I break out dealer counts by the dealers that are selling primarily luxury brand vehicles from those that are what I call full line dealers. There are a couple of issue with this data though. First, Lincoln and Cadillac dealer counts are not available separate from their parent company totals so I can’t include them in the luxury dealer table. Second, I have nowhere to put Mini and smart dealers so I include them in the full line table of dealers even though they are very narrow in their product scope.

The total number of dealers in Canada declined by 158 store net this past decade. Full line stores actually declined by 197 stores but this was made up a bit by luxury dealers which increased in the count by 39 stores. The luxury segment grew from about 5 percent of sales to about 9 percent of sales this past decade so there was room for additional dealer points.

No surprise but the D-3 collectively lost 441 dealers and there are about another 150 that will be gone by the end of this year. The D-3 dropped from about 75 percent of the market to just over 40 percent of the market and this loss of market share was the root of the loss of dealers. The Japanese added 114 dealers and the K-2 added 67 dealers for a total increase of 211 Asian brand dealers. European brands also added 72 stores.

GM shed the most dealers at 212 stores followed by Ford and Chrysler at 115 and 114 stores respectively. VW also lost 22 dealers, Subaru was down 9 stores and Suzuki down by 6 stores. Daewoo left the market and that accounted for a loss of 41 stores.

Three companies enter Canada, Mitsubishi ( now 77 stores ), smart ( now 49 stores ) and Mini ( now 25 stores ).

Kia added the most dealer points within the group of companies that were in the market the entire decade. Kia added 69 dealers followed by Hyundai with 39 stores.

Within the luxury brands all but Volvo added stores with both BMW and Lexus adding 8 stores. Lincoln and Cadillac also shed stores but do not know their dealer counts.

My thoughts on the day.

Dennis

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:

The Decade of Cars in Review

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Writing (all kinds) on January 7, 2010 at 6:26 PM

Dennis Desrosiers – January 7, 2010 – 1

By Dennis Desrosiers

Attached are sales per dealer for the decade. I sent a note out about these a few days ago but there was a technical error that I wanted to correct. We were never able to get the number of smart car dealers which operate out of Mercedes Benz stores so we always included smart sales as part of the Mercedes-Benz sales per dealers numbers. Mercedes-Benz has now provided me with accurate smart dealer counts so we are able to provide a cleaner analysis with MB broken out separate from smart. We always did break out BMW and Mini so the previous analysis did warp the analysis slightly.

I’ll add in my previous analysis below ( and edited for this change ) so will not repeat myself. But the one additional point I wanted to make was that sales per dealer have NOT fundamentally changed over the decade. They started at 452 units per store and finished at 434 units per store. It peaked at 479 units per store in 2007. This variable doesn’t change much for a number of reasons. First of all, each OEM tends to put more dealers into place as soon as existing dealers start to get bigger. There is still a view in this industry that dealers make too much money and they need to be controlled by adding more stores. I’ve always thought that the best position for any OEM is to allow their dealers to become stinkingly wealthy. What better way to motivate them. But alas most OEMs believe that more distribution is better once sales per dealer grow into certain ranges in any area of the country. Second, there is also a downside control in that if sales per dealer decline than we lose dealers. So over a decade-long period, there will be some change up and or down but at the end of the day it flat lines.

The other thing I noticed was that Lexus was the only brand that increased sales per dealer each year over the decade. Every other brand had at least one year where sales per dealer fell. Three cheers to Lexus … this is very hard to do and implies that not only did Lexus do well in the market each year ( they are the only luxury marque that also increases sales every year ) but they also exhibited the most discipline with their dealer strategy.

Hyundai increase sales per dealer the most this past decade growing from 268 units to 558 units an increase of 290 units per store and Lexus was right behind them with an increase of 288 units per store. I’ll bet anyone that Lexus dealers got more out of their added sales than Hyundai dealers out of their added sales. And finally, GM declined the most moving from 568 units to 408 units a drop of 260 units per store. We generally believe that most GM stores gave their size need about 500 units per dealer to be profitable so at 408 units per store this would also mean that most GM stores were NOT profitable and is at the root of their shedding so many dealers last year and this year.

Another thought for the day.

Dennis

Previous write up follows but understand this write up looks at 2009 versus 2008 and is not focused on the entire decade:

Now that we have final light vehicle sales for 2009 we can calculate Light vehicle sales per Dealer for 2009. This provides a very interesting look at the market from a very different perspective than the OEM. Sales per dealer are one of the better metrics for measuring dealer performance and just like with each OEM there were some very big winners and very big losers in this equation and somewhat different than what the overall sales numbers dictate. The strength of any OEM’s dealer body is currently one of the biggest issues in the automotive sector today and this analysis provides some insights into the performance by brand. Without a healthy and growing dealer body, an OEM inevitably will struggle to get their vehicles to the consumer.

Toyota remained the number one selling dealer network by a wide margin with 786 sales per store. BMW was number two with 618 units per store and Hyundai was number three with 558 units per store. Hyundai moved up eight spots in the rankings.

The biggest winner was Subaru if you measure performance on a percentage change basis. Their sales per dealer increased by 19.8 percent to 265 units per store from 221 units per store or 44 units. On a unit change basis, Hyundai showed the most improvement by a long shot with an increase of 78 vehicles per store. A number of other brands were up nicely … Ford up 39 units, Audi up 38 units, BMW up 37 units, Mercedes Benz up 32 units and KIA up 31 units. The amazing part of the Hyundai and KIA stories is that they increased sales per store so much AND at the same time added 17 and 14 store respectively. This is very hard to do. Ford, for instance, saw a solid increase in sales per store but this was a combination of their sales increasing close to 10 percent and the shedding of 6 dealers. Both trends help the sales per dealer metric.

On the flip side of this equation was Honda with a loss of 139 vehicles per store. This was the worse one year decline in sales per store by any OEM since I first started tracking this variable in 1991. Chrysler was down by 113 units per store and GM was down by 89 units per store. The GM number is surprising because they also lost 98 stores in 2009 so to be down by 89 units with this many dealer closures indicates just how bad a year GM had in Canada. Other underperformers include Toyota down by 90 units, Mazda down by 80 units, Infiniti down by 37 units, Nissan down by 32 units, Mini down by 34 units and Acura down by 24 units per store.

I also divided the market between full line dealer and those that are primarily luxury brand dealers. Interestingly the Luxury brands saw sales per store increased by 12 units while full-line dealers saw sales per dealer decline by 45 units.

My thoughts on the day.

Dennis
DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:

Cars and Trucks

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Living, Media Writing, Technology, Writing (all kinds) on January 7, 2010 at 1:02 PM

Dennis Desrosiers – January 7, 2010

Attached are light vehicle sales for 2000 to 2009 by the brand of vehicle sold.

The decade witnessed the start of a startup in Canada of three new vehicle brands, first was Mitsubishi in 2002, the second was Maybach in 2003 and the last was smart in 2004. You could technically include KIA in this list. KIA started in 1999 but their first full year was the year 2000. There also was the loss of one brand. Daewoo left Canada as a stand-alone in 2002 although GM absorbed all their models immediately and sold them through the GM dealer network.

The big winner from a market share point of view was the Japanese. They increased their share from 24.7 percent to 37.9 percent. All Japanese brands except Acura picked up market share with Toyota the big winner increasing from a 7.6 share to a 13.0 share of the market. Lexus also increased from 0.3 percent to 1.1 percent of the market adding to these totals.

The Koreans actually increased more than the Japanese on a relative basis going from a 3.6 percent share to a 10.2 percent share of the market almost a tripling of market share with the big winner being Hyundai who matured as a company and emerged in the decade being a legitimate top 6 company along with the D-3, Toyota, and Honda. In any particular month, any of these five companies can top the sales chart in Canada and it is a toss-up as to who will be in each sales spot by the end of the year. GM and Toyota will fight it out for the number one spot which is shocking in its own right. Ford has an inside track on the number three position but any of the remaining three companies could emerge as the fourth best seller or the sixth best seller. There is a large gap between number six and number seven although this could close this coming decade as well.

The Europeans also picked up a little bit of share this past decade increasing from 5.5 percent of the market to 8.1 percent. Both BMW (0.7% to 1.7%), Mercedes Benz (0.8% to 1.7%) and Audi (0.4% to 0.8%) all doubled their market position not only in share but also in volume with BMW finishing ahead of Mercedes Benz by a whisker. Volkswagen was the volume winner by a long shot with over 40K units sold in 2009

This is a zero-sum game and with these three major groups gaining a lot of shares someone had to lose a lot of shares and as everyone knows that was Detroit. The D-3 declined from a dominant 66.1 percent share to under fifty percent for the first time ever in 2008 and settled in at 43.8 percent by the end of 2009. GM lost 13 points of market share, Ford lost 3 points and Chrysler lost 6 points. Ford was the only one of the three to find a way to stop the erosion by the end of the decade. GM and Chrysler were up and down year by year ( mostly down ) and have still not found a way to stabilize their market position let alone turn it around.

My thoughts for the day.

Dennis

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:

Dennis Desrosiers Thoughts for the Day

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, Writing (all kinds) on January 6, 2010 at 8:34 PM

Dennis Desrosiers – January 6, 2010

By Dennis Desrosiers

Attached are sales for 2000 to 2009 for passenger cars versus light trucks and for the D-3 nameplates versus the import nameplates although I don’t know why we analysts break out the D-3 from the import nameplates anymore. The three of them are radically different especially after the last 12 months of crisis. Each also is very different from a structural point of view and position and performance in the market. But none the less this is still how the industry looks at things so I’ll also do it this way. I will promise to send you through an analysis by brand in the next day or two that doesn’t have this problem so bear with me.

With the exception of this past year ( 2009 ) the split between passenger cars and light truck sales in Canada was relatively constant at roughly 55 percent passenger car and 45 percent light truck. There as a slight bias toward more light truck share as the decade progressed but it wasn’t until 2009 that light trucks actually took a noticeable market share from passenger cars. In 2009 light truck share grew to 48.8 percent. At the beginning of the decade, most would have forecast light trucks to significantly outperform passenger cars. It never happened. This actually is quite surprising in that the whole fuel efficiency debate centred around the notion ( at least in Government eyes ) of car good .. truck bad. This notion is wrong but is the overwhelming perception of many who write about this industry. But much higher energy prices and a Government machine biased against light trucks ( especially SUV’s ) one would have expected a huge upswing in passenger car sales as energy prices soared and our Governments pushed the fuel efficiency button. In fact, the opposite happened. Canada ended up through the decade with a growth in light truck share. This shows how wrong some of the fundamental notions that evolve about our industry can be. In actual fact the notion of … car good – truck bad .. is highly flawed. There are many light trucks that are more fuel efficient than passenger cars. Indeed if you take out the commercial use light truck which because of their use have no choice but to have more powerful engines then the difference in fuel economy between light trucks and passenger cars is very slight. And that is one of the reasons that consumers bought so many of them.

Another insight from this mix of sales is the power of the consumer. Governments can foist their views onto the consumer all they want but at the end of the day the consumer is much more powerful than any politician and will buy what they want to buy not what some politician tells them to buy. And the vehicles companies simply respond to these consumers needs. They do have a role in shaping consumer thinking but much of the desire of the consumer emanates from their day to day need NOT what any vehicle company says their needs should be and certainly not from what any politician tells them to buy.

Indeed if you look at the second block of data on this chart you will see exactly what I mean when I say that OEMs do not control the consumer but instead respond to the consumer. This second section breaks out the D-3 nameplates from the import nameplates. Despite their serious problems, the D-3 remain incredibly powerful entities in the market and there is no argument that they were the most powerful companies by a wide margin at the beginning of the decade. If OEMs dictated what consumers bought then how is it that the three most powerful players ( the D-3 ) at the beginning of the decade accounted for 66. 1 percent of light vehicle sales but by the end of the decade they accounted for only 43.8 percent of sales.

There is a frightening view in policy circles that any OEM can dictate to the consumer what they should purchase and thus our policymakers put in place a process where OEMs are being asked to make sure certain benchmarks are met. But in reality, our policymakers should be taking on this responsibility NOT any OEM. The OEMs in Canada simply sell to the consumer the products the consumers desire. If the policymakers want consumers to buy the more fuel-efficient product then they need to alter consumer behaviour. And they have tools at their disposal to do exactly this with the most powerful tool being the tax system and the regulatory system. They could legislate old gas guzzlers off the road for instance through an inspection program like they do in many countries around the world. But politicians refuse to take responsibility because they don’t want to tell consumers or better put … FORCE … consumers to do something they fundamentally don’t want to do. After all, they might lose their vote. So they vacate this responsibility and push it onto the OEMs to do their dirty work for them. But the OEMs little to no control over the consumer and thus not a lot gets done.

I don’t deny that the OEMs have some responsibility but if our political masters want more fuel efficiency then they also should take more responsibility for this agenda item.

Sorry to get off topic a little but my mind wanders.

Back to the D-3 import nameplate decade of sales. It was needless to say a very difficult decade for the D-3. All three lost market share which I’ll highlight in more detail in one of my next e-mails. But GM declined from 30.5 percent of the market to 17.4 percent, Ford’s share was up in 2009 but they still declined from 18.2 percent of the market to 15.4 percent and Chrysler declined from 17.3 percent of the market to 11.2 percent. Collectively the D-3 lost 22.2 points of market share a record for any one decade. Import nameplates grew from about 525K units in a 1.55 million market to about 820K in a 1.46 million market an incredible performance that ultimately led to the near bankruptcy in Canada of both GM and Chrysler. The same happened in the US and it did result in Chapter 11 filings.

I’ll send some more decade level information out over the next few days and weeks and take a very close look at the decade through multiple windows. I’ll also try to avoid getting into these rants about our policymakers.

My thoughts for the day.

Dennis

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
www.desrosiers.ca

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