Friday, 28 August 2015

Automakers Spending Billions on Technologies That Many Consumers Don’t Use

Built-in Connectivity among Least Used Technologies, Creating Lost Value
WESTLAKE VILLAGE, Calif.:  25 August 2015 - Automakers are investing billions of dollars to put technologies in their cars and light trucks that are not being used by many of the owners of those vehicles, according to the J.D. Power 2015 Driver Interactive Vehicle Experience (DrIVE) Report.SM
The 2015 DrIVE Report measures driver experiences with in-vehicle technology features during the first 90 days of ownership.
The report finds that at least 20 percent of new-vehicle owners have never used 16 of the 33 technology features measured. The five features owners most commonly report that they "never use" are in-vehicle concierge (43%); mobile routers (38%); automatic parking systems (35%); head-up display (33%); and built-in apps (32%).
There are 14 technology features that 20 percent or more of owners do not want in their next vehicle, including Apple CarPlay and Google Android Auto, in-vehicle concierge services and in-vehicle voice texting.  Among Gen Y, the number of features unwanted by at least 20 percent of owners increases to 23, specifically technologies related to entertainment and connectivity systems.
"In many cases, owners simply prefer to use their smartphone or tablet because it meets their needs; they're familiar with the device and it's accurate," said Kristin Kolodge, executive director of driver interaction & HMI research at J.D. Power. "In-vehicle connectivity technology that's not used results in millions of dollars of lost value for both consumers and the manufacturers."
Among all owners, the most frequently cited reasons for not wanting a specific technology feature in their next vehicle are "did not find it useful" in their current vehicle and the technology "came as part of a package on my current vehicle and I did not want it."
In addition, owners who say their dealer did not explain the feature have a higher likelihood of never using the technology. Furthermore, features that are not activated when the vehicle is delivered often result in the owner not even knowing they have the technology in their new vehicle.
Kolodge noted that the technologies owners most often want are those that enhance the driving experience and safety, which are only available as a built-in feature rather than via an external device. In-vehicle technologies that most owners do want include vehicle health diagnostics, blind-spot warning and detection, and adaptive cruise control.
"The first 30 days are critical. That first-time experience with the technology is the make-it-or-break-it stage," said Kolodge. "Automakers need to get it right the first time, or owners will simply use their own mobile device instead of the in-vehicle technology."
Because the first few weeks of ownership are so critical, dealerships play the most important role in helping owners get off to a good start with the technology in their vehicle, Kolodge noted.
"While dealers are expected to play a key role in explaining the technology to consumers, the onus should be on automakers to design the technology to be intuitive for consumers," said Kolodge. "Automakers also need to explain the technology to dealership staff and train them on how to demonstrate it to owners."
Safety and Repair Costs
Use of in-vehicle technologies has implications beyond the auto industry. For example, the insurance industry is closely tracking automotive technology for safety and financial purposes. Insurers are concerned that difficult-to-use technology may distract drivers and cause an accident. Using smartphones instead of in-vehicle technology also creates safety issues. Additionally, in-vehicle technology can significantly increase claims costs for vehicles damaged in an accident.
"While some technologies, such as lane-departure warning, are making vehicles safer, the insurance industry is very concerned about the driver-distraction hazards caused by some of the other technologies," said Chip Lackey, senior director of the insurance practice at J.D. Power. "In addition, technology drives up the repair and replacement costs. A slight bumper scrape that would normally cost a few hundred dollars to repair can catapult a claim into thousands of dollars when a park assist camera or other sensors are damaged."
The 2015 Driver Interactive Vehicle Experience (DrIVE) Report is based on responses from more than 4,200 vehicle owners and lessees after 90 days of ownership. The report was fielded in April through June 2015.

Automakers Spending Billions on Technologies That Many Consumers Don't Use................

Friday, 21 August 2015

Are new-vehicle buyers basing their purchases on in-car technology? The latest data from J.D. Power indicates that many are. According to the summer edition of their 2015 U.S. Automotive Media and Marketing Report, 43% of luxury-brand new-vehicle drivers and 28% of nonluxury-brand new-vehicle drivers cited technology as a main reason behind their purchase.

The Rise of Technology in Cars

The information age has spread technology into almost all industries and facets of life. Technological advancements have allowed cars to become safer, more efficient and longer lasting. They've also allowed manufacturers the freedom to implement plenty of tech features that enhance convenience, safety and entertainment value; and they'll continue to add more as long as consumers are interested.

Who Wants In-Vehicle Technology?

As a consumer in the information age, you can choose to embrace technology or shy away from it. The data from the J.D. Power report signals that those who've embraced it are the ones who are more likely to make car purchases based on in-car technology. Knowing that, you would think that Millennials are the driving force behind the high number of consumers considering technology as part of their new car purchase. Think again.
There's no discernible demographic difference among those factoring technology into vehicle purchases. According to the survey, the following percentages of people chose their vehicles based on its technology features:
  • Age 34 and younger: 31%
  • Ages 35-54: 28%
  • Age 55 and older: 31%
You can't tell me these findings aren't surprising. Furthermore, it doesn't seem to differ amongst gender either: 31% of men and 28% of women cited technology as one of the reasons they bought their new vehicle.

Technology and Safety Make a Great Pair

While new-car buyers use technology for entertainment, many often like their latest car features to be safety-oriented. Another J.D. Power study from the first quarter of 2015 found that four of the top five preferred in-car technologies were safety features. So, while technology can be used to have a good time, you should realize that it can keep you and your passengers safe, too.

How Much Does Technology Factor in Your Car Purchase............

Friday, 14 August 2015

Many used EVs going for less than gas counterparts

Today, you can get the Volt for an average price of just $10,500, which is now only $650 more than the Cruze model.

If it's not on your radar already, one industry trend will be soon as the stats become increasingly hard to ignore. That is, electric vehicles' alarming depreciation rates. According to new data and insight from Black Book, EVs continue to face much heavier depreciation rates than their gas counterparts. In some instances, consumers can shell out up to $20,000 more for a new electric version of a vehicle than they would for the sister gas model.
That said, three years down the road, Black Book pointed out, EVs could easily be priced $900 below their gas counterparts, showing rapid declines in price.
"On several of today's popular EV vehicles, the depreciation curve is very steep, largely driven by lack of consumer demand preferences for fuel-efficient models with current price of gas," said Anil Goyal, vice president of automotive valuation and analytics for Black Book, and a speaker at the upcoming Used Car Week conferences,  "Smaller cars have experienced heavier depreciation over the last 12-18 months, but it's clear that the small mainstream electric vehicles are experiencing even heavier valuation drops."
Black Book took a look at the prices of the new Nissan Leaf versus the Nissan Versa; a Mitsubishi i-MiEV versus the Mitsubishi Lancer; Ford Focus Electric versus the Ford Focus; and a Chevrolet Volt versus Chevrolet Cruze.
The company found the EV premium over a gasoline model for mainstream brands has "pretty much disappeared" for used vehicles from an average premium of $16,600 for new vehicles.
In fact, the company found in a couple of cases, a used electric model now costs less than their used gasoline counterpart or close to it.
Take these models for example:
In 2012, the Leaf SV 4D hatchback was going for $36,380, touting a $20,287 premium over its gasoline counterpart. These days, you can get the same electric vehicle for $7,400, $900 less than the used gasoline model goes for.
Depreciation for the i-MiEV ES 4D Hatchback is even more alarming. The EV model went for $29,125 new in 2012, with a $19,887 premium over the gas model. Now, that same EV model is going for an average of $5,350, which is $3,100 less than what the gasoline model goes for these days.
Black Book also pointed out the Volt 4D Hatchback shows similar trends. Back in 2012, the EV model went for $40,431 MSRP, which was $17,060 more than the Cruze LT 4D sedan. Today, you can get the Volt for an average price of just $10,500, which is now only $650 more than the Cruze model.
This trend is coming up often in industry conversation - from a variety of angles. Though depreciation among EV vehicles may be a large pain point for those shoppers that bought them new, the used models could be a very good sell for the budget-conscious environment-minded shoppers looking for a long-term vehicle.
In a recent blog post from Yahoo Autos, author Steven Lang points out EVs are experiencing a "colossal loss of market value."
And the luxury models aren't immune to the surprising depreciation. According to the blog post, the 2013 Tesla Model S Performance is currently going for $74,000 and is forecasted to lose 28.9 percent of its value by July 2016, ending with a pricetag of $52,600.
EV prices are low, and are expected to get lower - proving a good buy for those customers looking for a long-term vehicle with no plans to trade-in - considering, if residuals continue down the same trajectory, many of these EVs might be looking at a 50-percent or more decline in value over the next couple of years.

Many Used EVS Going fo Less Than Gas Counterparts........................

Friday, 7 August 2015

OMVIC investigation results in curbsiding conviction

The Ontario Motor Vehicle Industry Council reported recently it has caught another curbsider, or business acting as a motor vehicle dealer without registration.
This is a violation of the Motor Vehicle Dealers Act, and Zhijun Wang of Toronto was recently fined $11,000 after pleading guilty to curbsiding charges.
He also plead guilty to breaching the Consumer Protection Act by committing an unfair business practice.
The charges were the result of an undercover investigation conducted by OMVIC.
Taking an undercover approach, OMVIC investigators posed as consumers and responded to advertisements places in online marketplaces by Wang, according to Terry O'Keefe, OMVIC director of communications.
What they found included dramatic rolled back odometers.
-For example, one advertised vehicle was a 2007 Camry with an odometer reading of 95,860 kilometers, when in fact the OMVIC investigation showed the actual distance the vehicle had traveled was approximately 201,283 kilometers.
But that's not all.
-A second OMVIC investigator responses to an ad for a 2009 Infiniti sedan with an odometer reading 67,000 kilometers, but the true reading turned out to b approximately 179,615 kilometers.
When the investigators inquired about the vehicles, there were invited to view the units at a plaza on Sheppard Avenue East in Toronto.
Further incriminating himself, Wang provided a false name to the undercover shoppers and also provided a false ID in one instance. Furthermore, neither of the cars was actually registered in his name.
"Often the vehicles they (curbsiders) sell are not registered in their name or have only been registered in their name for a short period of time. And commonly the vehicles sold are rebuilt wrecks with undisclosed accident repairs or rolled-back odometers," O'Keefe said.
"Only when vehicles are purchased from registered dealers are the buyers protected by OMVIC, Ontario's consumer protection laws and the Motor Vehicle Dealers Compensation Fund. When consumers purchase vehicles privately and encounter problems, they are, unfortunately, on their own with little recourse other than the courts," he continued.
To date this year, 29 individuals/businesses have been convicted for curbsiding. And 70 additional cases are currently before the courts.

OMVIC Investigation Results in Curbsiding Conviction............................