Friday, 26 February 2016

Falling loonie pushes used-vehicle exports to US

A lower Canadian dollar has been bad for some industries, and boosted others. One division of the Canadian automotive industry that has grown substantially over the past year is used-vehicle exports to the U.S.
In fact, according to DesRosiers Automotive Consultants, the number of used vehicles exported to the U.S. from Canada through November of last year grew to 200,000. This is the highest export level from Canada to the U.S. for pre-owned vehicles seen since 2002.
Interestingly, although these purchased are being driven by American car dealers looking to secure cheap used vehicles due to the current exchange rate, also saw an uptick in U.S. traffic on its site, as well.
From Nov. 1 to Dec. 31 of 2015, U.S. traffic to the site increased by 27.7 percent year-over-year,AutoTrader,ca's Paul Williams reported.
"'s director of marketing Ian MacDonald was reported saying, "A weak Loonie makes it less expensive for Canadian manufacturers and exporters to sell their goods south of the border. More people looking to purchase Canadian goods increases demand. A larger pool of consumers means dealerships and private sellers have seen significantly higher sales year over year."
And Canadian's auto auctions have been selling south, as well.
In talking with ALG Canada regional director Geoff Helby this past fall, he likened export activity at ADESA's Canadian auctions to a "U.S. dealer invasion."
In fact, According to ALG data, exports were already exploding last summer. July 2015 (at the time) marked the highest volume month since January 2014 for U.S. dealer purchases.  Helby also reported a year-over-year U.S. dealer purchase volume increase of a whopping 114 percent for July 2015.
Tom Kontos, ADESA Analytical Services' chief economist, touched on this trend this past fall, as well, noting at the time it was definitely at trend to watch that was already having an impact on used pricing at auction, as well.
"I did also want to draw attention to the fact that U.S. bidders are contributing to the strength of the market, too," said Kontos. "You have got tighter supply, and dealers coming in from across the border from the U.S. and bidding aggressively for cars, because of the strength of the U.S. dollar. The U.S. buyers are contributing to the strength of prices in the Canadian wholesale market."
So, will the export trend last, grow or diminish with time? Josh Bailey, Canadian Black Book vice president and editorial director, said it's truly cyclical, and the trend goes both ways depending on the two currencies.
Bailey said in October, "From what we hear from our auction surveyors, there are still many U.S. buyers in the Canadian market making purchases, whether online or in the lanes, mostly motivated by the foreign exchange rate.
"Naturally this creates some tension, but no doubt when Canadians were in the U.S. buying a few years ago, it was not any different," he added.


Falling Loonie Pushes Used Vehicle Exports to US........

Friday, 19 February 2016

Study: How a car looks is the biggest reason people buy

J.D. Power's latest Auto Avoider Study found styling - interior and exterior - were the top two factors that caused consumer to buy or avoid models.
Reliability finished third, with 55 per cent of new-vehicle buyers citing it as a leading reason, compared with 51 per cent in last year's report and 48 per cent in 2013. It was also a deal-breaker for 17 per cent of shoppers, compared with 14 per cent in the 2015 report.
"It became pretty clear to us that the pretty widespread media coverage of recalls by many automotive companies last year probably was the driving force behind this," says Dave Sargent, J.D. Power's global automotive vice-president.
U.S. auto recalls, including the GM ignition-switch problem and exploding Takata airbags, hit more than 51 million vehicles last year, beating the previous record of just less than 51 million in 2014. Recalls were also at an all-time high in Canada.
The study was conducted between last July and September among nearly 26,500 owners who registered a new vehicle in April and May 2015. A similar survey in Canada produced similar answers but Sargent says specific results could not be released because a private client commissioned the poll.
The potential recall damage shows how vulnerable manufacturers can become to relying on a relative handful of outside suppliers for key components, says Blair Qualey, president of the New Car Dealers Association of British Columbia.
"Dealers in some circumstances, quite frankly, have been as shocked as the consumers have in some of the higher-profile things we've seen over the last while," he says.
Sargent says mass-market models were flagged more than premium ones, and European and Asian brands did disproportionately better than the Big Three - despite data showing they've largely closed the quality gap. It may be some deep cultural memory of the bad old days of Monday cars and Friday cars.
The study's other major revelation is the increasing dominance of the Internet when it comes to choosing a vehicle. On average, buyers physically shop three models and more than half of respondents who bought new purchased the exact make and model they wanted.
"A lot of consumers do the vast majority of their shopping online and will get their short list, then just go to those dealers," says Sargent.
That puts more pressure on dealers to provide a good experience or risk the buyer going to whatever was No. 2 on their list.
"Don't let that person go because there aren't that many others who are going to come in the door," says Sargent.
Dealers understand that, says Qualey, noting many have invested in new showrooms that feature things like coffee bars and WiFi. They're also working closely with manufacturers to train sales staff so they know at least as much about the products as customers.
"People don't want to spend hours and hours in the dealership now," he says. "They come in with their shortlist and their list of questions and they want to be helped quickly. Dealers are working very, very hard now to make sure that the customer experience in the store matches that."


Study: How a Car Looks is the Biggest Reason People Buy..............

Friday, 12 February 2016

Carmakers Retreat From Quirky Designs as Millennials Embrace Mainstream

It was not too long ago that automakers were tripping over themselves in pursuit of younger buyers, offering boxy wagons and small, jellybean-shape city cars. The Scion xB, the Honda Element, the Nissan Cube: All were funky departures for Generation X from the dowdy minivans of their parents.
But times and tastes change. When Toyota announced last week that it would mothball its youth-oriented Scion brand, it punctuated a broader retreat in the industry from quirkier car designs, particularly at the low end of the market.
Today's younger buyers, loosely referred to as Generation Y, have embraced a term that would have turned off their immediate forebears.
"Compared to Gen X, Gen Y is very mainstream," said Michelle Krebs, senior analyst for Autotrader. "They see the car as a symbol of their accomplishments and aspirations. They're into very established, highly respected global brands, whereas Gen X always wanted something different from what their parents drove."
But they have little taste or patience for Scion, an American subsidiary founded by Toyota in 2003 explicitly to woo younger buyers. After reaching peak sales of 173,000 a year in 2006, the Scion plunged as low as 45,000 in 2010 . Some of its models will survive, but under the Toyota name.
Instead, younger buyers have embraced conservatively styled crossovers and sport utility vehicles. Even once-moribund Buick is attracting millennials with its strong-selling Encore compact crossover.
Scion never strayed far from the formula it concocted when "The Fast and the Furious" referred to one movie, not a $4 billion Hollywood juggernaut.
Central to the Scion recipe were unconventional exterior designs ripe for personalization. The so-called tuner culture that blossomed in the 1990s in Southern California readily adopted the cars, with their sub-$20,000 sticker prices, idiosyncratic yet malleable styling and easily upgraded exhaust and engine-management systems. Scions were underbaked by design.
"Toyota is, 'measure 17 times, cut once,' whereas Scion was more, 'measure twice, cut once,' " said Jack Hollis, group vice president of marketing for Toyota's American subsidiary, Toyota Motor Sales. "Being progressive wasn't something that came easy for Toyota 13 or 14 years ago. Scion was a laboratory for experimentation."
Mr. Hollis, who previously served as vice president of Scion, added: "We had the lowest median age buyer in the market, so the recession hit us hard." But while other carmakers roared back, with a record 17.5 million passenger vehicles sold in 2015, Scion's numbers never recovered.
Mini, the emblematic British brand resurrected by the BMW Group of Germany at the dawn of the millennium, has also struggled against the preference of millennials for more staid - and bigger - cars, with American sales of the Mini relatively flat since 2012.
The asymmetrical Cube from Nissan, a vehicle whose emphatic strangeness was unrivaled in the United States market, was discontinued in 2014. Production of the Honda Element, an airy four-door beloved by dog owners for its crate-ready rear load area and easily cleaned interior, was stopped in 2011.
Mr. Hollis said that the initial success of the Scion FR-S, a well-reviewed sports coupe, was attributable in part to its "being mainstream." But consumers gave a wan embrace to the Scion iQ, a tiny runabout aimed at urban dwellers. "It didn't work as well," he said of the iQ experiment.
Stewart Reed has a front-row seat to aesthetic shifts in the industry, as chairman of the transportation design program at the Art Center College of Design in Pasadena, Calif., one of the car industry's top incubators of global design talent. Mr. Reed recalled that the original Scion xB, whose resolutely boxy body scored a knockout for unfashionable design, sold strongly through its first generation.
"The profile that it struck in the landscape was quite interesting," he said.
But the second generation of that car proved to be the beginning of the end for Scion as a stand-alone brand. A heavier, rounder xB polarized the Scion faithful just in time for the economic downturn. "As the new xB came in, I remember people responding by buying up the old one, essentially hoarding them," Mr. Reed said.
Those hoarders are among a devout core who will remain Scion's champions. Among them is Noel Barnum, 25, a medical telemetry technician in Long Beach, Calif.
"The audience will still be there," he said. "Scion punched the scene in the mouth. They could release these weird-looking cars that looked like toasters and do really well with them."
Mr. Barnum's FR-S coupe bears the hallmarks of a Scion die-hard who spent liberally in the aftermarket for an enormous rear deck lid wing, a pavement-scraping front chin splitter, a body kit and outsize custom alloy wheels. Blame for Scion's failure to meet shifting tastes among young buyers did not lie with the design studios, Mr. Barnum said, but with the marketing department.
"The xB II was substantially higher-priced than the first-gen car," he said. "And at that price, all of a sudden you could start thinking RAV4," he said, referring to Toyota's best-selling compact crossover.
Indeed, as it winds down the Scion brand, Toyota is describing its laboratory experiment as a success, claiming that 45 percent of Scion owners remained in the Toyota group of brands for their next purchase or lease.
Given the cyclical nature of the car business, unconventional designs may resonate anew with younger buyers entering the market. But for the time being, an old saying in the auto industry has been flipped on its head. "Right now, you can't really say: 'You can sell a young man's car to an old man, but you can't sell an old man's car to a young man,' " Mr. Reed said. "It's a make-you-smile shift."

Carmakers Retreat from Quirky Designs as Millennials Embrace Mainstream..........

Friday, 5 February 2016

Toyota killing Scion after years of slumping sales

Toyota is killing its youth-oriented Scion brand after learning an important lesson: Young buyers simply want Toyotas.
Scion was formed in 2003 to court Generation X buyers, who didn't like their parents' brands and didn't trust traditional marketing, says Bob Carter, Toyota Motor Corp.'s senior vice-president of U.S. operations. It was known for its funky designs, like the boxy xB, and was the brand Toyota used when it wanted to experiment with new kinds of marketing, like pop-up test or no-haggle pricing.
But as those buyers matured, they started buying Toyotas.
Next came the Millennials. For a while, that generation delayed car buying because they were underemployed and had too much student debt. But when they did buy, they liked their parents' brands and wanted Toyotas, too.
"For those buyers, frankly speaking, Toyota as a brand is more aspirational than Scion was," Carter said. Carter said Millennials made up nearly one-third of the Toyota brand's buyers last year.
There were other issues with Scion. The small, oddball lineup never connected with buyers and cost a bit more, since features like touchscreens that were optional on other cars came standard on Scions. Scion's bestseller, the tC coupe, starts at $21,330, or $2,600 more than a Honda Civic. Scion also doesn't have any SUVs, which are rapidly becoming the most popular style of vehicle in the U.S.
At the brand's height, in 2006, Americans bought just over 173,000 Scions. In 2015, they bought 56,167. By comparison, Toyota sold more than 363,000 Corolla sedans last year.
So, beginning in August, 2017 model-year Scion vehicles will be rebadged as Toyotas. The FR-S sports car, iA sedan and iM 5-door hatchback will be a part of the Toyota line-up. So will the C-HR, a small SUV concept shown at the L.A. Auto Show that Toyota will likely make. The tC coupe will have a final release series edition and end production in August, according to Toyota.
Toyota says it achieved what it had hoped with the Scion, including attracting younger buyers. Half of the 1 million Scions sold were bought by people under 35, Carter said, and 70 per cent of those buyers were new to the Toyota family.
Katie Seals, 22, was new to the Toyota family when she bought a Scion xD subcompact about five months ago. Seals, a television reporter, lives near the beach in San Diego and wanted something easy to park. She also wanted something reliable but thought the Toyotas and Hondas she looked at were dull. And she loved the xD's sound system.
Toyota may not keep buyers like Seals. She said she liked having something different, and would probably look around at other brands when it comes time to buy again.
Carter said the company will bring some of its experiments at Scion to its other brands. The Toyota Care maintenance program, which provides two years of free maintenance, originated with Scion, he said. Lexus is currently running a no-haggle pricing pilot borrowed from Scion, and Toyota will soon offer an express purchase program. Scion taught Toyota that consumers want transparent pricing and want to spend less time buying.
"Scion was the test bed," Carter said.
Sarah Wall, a 39-year-old marketing and communications executive in San Francisco, said she bought a Scion xD in 2010 because of the no-haggle pricing policy. The car is distinctive, easy to park and has low maintenance costs, she said.
Wall said she's "devastated" that Scion will no longer be a separate brand. But she says she would consider a Toyota in the future, especially if the brand adopts no-haggle pricing.
Toyota's decision will have minimal impact on dealers and owners. Scion, which is only sold in the U.S., Canada and Puerto Rico, has no stand-alone dealerships. The brand is sold through 1,004 Toyota dealerships, which will continue to service the cars.
It's not unusual for auto makers to kill a brand or pull it out of a particular market. Ford Motor Co. killed its Mercury brand in 2010, and multiple brands, like Izusu and Renault, have left the U.S. market. But Kelley Blue Book senior analyst Karl Brauer said this is the first time a U.S.-specific brand launched by a Japanese manufacturer has been scrapped.
Brauer says Scion was a victim of the success of the Toyota brand. The Toyota Camry sedan has been the bestselling car in the U.S. for 14 years, and the brand has a full lineup that appeals to Millennials and Baby Boomers alike.
Scion's demise doesn't necessarily spell trouble for other small car brands, like BMW AG's Mini or Daimler AG's Smart, said Ivan Drury, an analyst for
Those brands differentiated themselves from their parent brands more than Scion ever did, he said.


Toyota Killing Scion After Years of Slumping Sales..........................