Gen Y Outpaces Gen X in New-Car Sales

 

If you haven't started actively considering how to attract more younger buyers, now might be the time to do so.

According to a new study from J.D. Power, Generation Y consumers now make up a larger percentage of U.S. new-vehicle retail sales than their older Generation X counterparts.

 According to data collected by J.D. Power's Power Information Network (PIN) that illustrates that assertion, Gen Y has accounted for 26 percent of new-vehicle retail sales so far this year, compared to Gen X's 24 percent share.

The largest group of buyers remain the Baby Boomers, who accounted for 38 percent of new vehicles sold during the first half of the year.

In comparison, in 2013, Gen Y accounted for 23 percent of new vehicles sold, while Gen X bought 24 percent of new vehicles during the first half of the year.

"As Gen Y consumers enter new life stages, earn higher incomes and grow their families, their ability and desire to acquire new vehicles is increasing," said Thomas King, vice president of PIN. "As new-vehicle demand among Gen Y consumers increases, it will be important for automakers to respond to the needs of these consumers, not only in terms of the vehicle design, but also the marketing, sales and service experience."

And the gap between Gen Y and Gen X car sales will most likely continue to grow.

According to J.D. Power, Gen Y sales volume is expected to grow 17 percent this year when compared to 2013.

On the other hand, Gen X sales volumes are only expected to jump up by 6 percent during 2014.

J.D. Power's PIN data shows which cars Gen Y shoppers are favoring.

According to the data, these younger customers are gravitating toward smaller vehicles, with compact/small vehicle segments accounting for nearly half of all Gen Y purchases.

In fact, the compact car segment is the most popular segment for Gen Y, with 20 percent of all vehicles sold to this group coming from this segment.

Gen X tends to lean toward larger vehicles, as this age group slightly favors midsize vehicles.

For Gen X, compact SUV is the most popular segment, making up 15 percent of sales to this generation.

Gen Y Outspaces Gen X in New-Car Sales............... www.redlineautosales.ca/gen-y-outpaces-gen-x-in-new-car-sales.htm

Pfaff Brings Pagani Supercars to Canadian Market

Pfaff Automotive Partners is bringing a new brand to Canada.

The dealer group announced today it is the exclusive Canadian importer and dealer of the Italian sport brand Pagani.  

The exotic brand, Pagani Automobili S.p.A., got its start in 1992 by Argentinian, Horacio Pagani and is based in Italy.

"We are proud to bring this exotic automotive brand to Canada, with its reputation for leadership in technology and design," said Christopher Pfaff, president and chief executive officer of Pfaff Automotive Partners. "Aligning the Pfaff brand to Pagani is an absolute honour and we are excited to introduce their latest supercar, the Huayra, to the Canadian market." 

Pfaff explained in partnering with the exotic car brand, the dealer group is looking to satisfy what they see as the growing supercar market in Canada.

Pfaff will serve Pagani clients from its dealership in Woodbridge, Pfaff Porsche.  

Each Pagani vehicle are completely custom made. The company's flagship model the Huayra is made of more than 4,000 components and touts a Mercedes-AMG M158 V12 twin-Turbo engine.

The Huayra was launched as a complete redesign of Pagani's first model, the Zonda, which took seven years for the company to complete.

"To create (the pieces) and put them together requires creativity, patience and passion that I share with a fantastic young team and with the most competent partners in all sectors," said Horacio Pagani, founder of Pagani. "The team was able to work on many projects at the same time, driving on different tracks that occasionally came to meet by sharing engineering concepts, materials, safety and scientific or design studies."

Pfaff Brings Pagani Supercars to Canadian Market............ www.redlineautosales.ca/pfaff-brings-pagani-supercars-to-canadian-market.htm 

 

Used Supply: Looking 4 Years Ahead

Canadian dealers have heard rumors of expanding used supply for a few years now, but the process has been slow.

According to the latest Canada Industry Report from ALG, more used units are set to begin flowing in - but again, it will not happen overnight.

ALG predicts that between this month and July 2018, used supply will increase by 178,000 units.

"We can say with high confidence that increasing supply will be exerting a gradual negative pressure on values, though there are other opposing forces which will partially offset this trend. Movements by segment are even more challenging, as demonstrated by segments that exhibit a divergence from the overall trend," the report stated.

Of course, expanding supply of used vehicles "dramatically impacts their potential resale value," ALG analysts pointed out.

As such, during the same four-year period, ALG predicts vehicles returning to the market in 2018 will average 41 percent retention, down quite a bit from 47 percent retention seen in the first half of 2014.

That said, not all segments will see supply expand.       

As the new-car and used-car market are intrinsically linked, segments that have experience declining sales for the past few years will continue to be in scarce supply.

For example, ALG picked out the full-size car and full-size utility segments.

ALG expects used supply for both these segments to drop by over 20 percent over the next four years.

According to the report, in the short term, used market supply is forecasted to remain unchanged as a whole, and therefore will have no impact on residuals this month and through August.

Through July and August, overall segment retention rates will range between a drop of 0.4 percent to a slight rise of 0.5 percent.

The minivan segment will see the largest negative impact, with retention predicted to drop by 0.4 percent, while the premium full-size utility segment is expected to rise by 0.5 percent.

Looking into the future, ALG took a step into the past, as well, to predict long-term used-car supply expansion.

In 2009, new-vehicle sales and leasing dropped off to just over 1.46 million vehicles sold.

ALG pointed out new-car sales continued to lag over the next to years, pushing up slightly to 1.68 million vehicles sold in 2012.

"The repercussions of these historically low sales years from 2009-2011 continue to affect both supply and prices of used vehicles today. In fact, the bottoming out of the used-vehicle supply (aged 7 years or less) last year aligned with the sharp reduction in lease and overall sales volumes back in 2009," ALG analysts said.

As leased vehicles and new cars generally make it back into the market around the four- to seven-year return period, low sales in 2009 continue to impact used supply today.

"The current growth in new-vehicle sales along with higher lease penetrations will eventually solve the used-vehicle inventory constraints - though it will occur gradually with full recovery not forecasted until 2017," ALG analysts predict.

And, of course, this trend will serve to push prices down at auction, putting less pressure on dealers' pockets while stocking their used lots.

"With used values riding high in the current market, it can be difficult to envision a market that is significantly lower in just four years' time, particularly with demand continuing to strengthen. But the used supply picture is key to understanding the downward pressures that will be exerted on prices over the next few years," the report concluded.

Used Supply: Looking 4 Years Ahead............. www.redlineautosales.ca/used-supply--looking-4-years-ahead.htm 

 

AutoGO.ca now offers a new tool for gauging theft frequency that could benefit both dealers and their consumers.

The theft frequency estimator, developed by the website in conjunction with National Bank Insurance Auto | Home and Adviso Conseil Inc., is integrated into the used-car listings on AutoGO's website to help buyers looking for a car in the Quebec area visualize the likelihood of theft of the vehicle they're interested in.

The tool could also be useful for dealers who have listings on the site, making them aware of the probability of theft, not only from a purchaser's point of view, but also for the safety of the vehicles on their lot.

With the unfortunate reality of how theft rates positively correlate with insurance rates, the theft frequency estimator is another method to help decide which vehicles are worth listing and maintaining in dealer stock.

Dominic Caron, the marketing manager for National Bank Insurance Auto | Home, hopes the tool will help automotive customers gauge their finances.

"Damage, such as theft, generally impacts the insured's premium," Caron said. "The theft frequency estimator gives consumers an additional tool to assist them in making well-informed decisions when managing their insurance budget."

The national car theft rates which power the estimator are based on data from the Insurance Bureau of Canada.

AutoGo.ca Integrates Used Car Theft Frequency Estimator........ www.redlineautosales.ca/autogo-ca-integrates-used-car-theft-frequency-estimator.htm

GM Canada to Recall Over 57K Vehicles

GM Canada to Recall Over 57K Vehicles

OSHAWA, Ontario - 

After recalling 187,000 units the week before, General Motors Canada announced late last week yet another safety issue involving air bag inflators – bringing the recall count closer to 50 this year for the GM automaker.

The most recent recall covers 57,706 vehicles in Canada, involving a variety of models.

First up, dealers will replace the driver’s side air bag inflator in 4,066 2013-2014 model year Chevrolet Cruze sedans in Canada.

“The inflator in the driver’s front air bag may rupture and/or the air bag may not inflate during air bag deployment,” the company statement said. “A rupture could propel metal pieces of the inflator into the vehicle cabin, possibly striking and seriously injuring the driver or other vehicle occupants.”

Furthermore, if the inflator does not inflate the air bag, there is an increased risk of injury to the driver.

The company is aware of one injury related to the issue.

Next up, dealers will recalibrate transfer case control module software in 53,607 full-size pickup trucks and SUVs in Canada.

Affected are four-wheel-drive versions of the 2014-2015 Chevrolet Silverado and GMC Sierra; the 2015 Chevrolet Tahoe and Suburban; and the 2015 GMC Yukon and Yukon XL.

“In these vehicles, the transfer case may electronically switch to neutral without input from the driver,” the company explained. “If this occurs while a vehicle is in motion, no power will go to the wheels. If the vehicle is stopped or parked, it may roll away if the parking brake is not set.”

GM is not aware of any crashes or injuries related to this particular issue.

Lastly, dealers will also replace the two rear shock absorbers in 33 2014 model year Chevrolet Corvettes in Canada with the FE1 or FE3 suspension to repair a possible insufficient weld in the rear shocks that could lead to a fracture and/or reduce the shocks’ service life.

GM is not aware of any crashes or injuries related to this issue, either.

Shortly after GM announced this recall last week, a group of Toronto dealers launched a suit against GM Canada and parent company General Motors Co.

a group of prominent GM Canada dealers is suing the company and its parent General Motors Co.

Adria MacKenzie, corporate communications manager at GM Canada told Auto Remarketing Canada this morning, "A number of Toronto dealers have taken legal action against GM. The claims are without merit, and we plan to defend against them vigorously."

"We will continue to be focused on our customers," MacKenzie added.


GM Canada to Recall Over 57k Vehicles............. www.redlineautosales.ca//gm-canada-to-recall-over-57k-vehicles.htm

CarProof Finds 37% of Canadian Used Vehicles Have a Lien

LONDON, Ontario - 

In news relevant to both dealers and consumers, CarProof data reveals that more than one-third of the vehicles have a lien, or security for debt owing.

The company shared, interestingly, this is a fact that most Canadians are "largely unaware of."

Specifically, CarProof's study of vehicle history reports showed that 37 percent of vehicles in Canada have a current lien on them.

Liens present an interesting issue for both dealers and consumers as they represent the right of a lender to keep possession of the vehicle belonging to another person until a debt owed by that person is paid in full.

After discovering how common car liens are, CarProof conducted a consumer survey to measure how aware Canadian consumers really are when it comes to this issue.

Survey results shows 63 percent of respondents "underestimated the presence of liens."

That said, most respondents - 88 percent - said they do see the value of a lien search before buying a used vehicle.

Many vehicle history reports include this information, such as CarProof and Carfax.

In response to the study, CarProof put together a video further detailing what a lien is and how to look for one during the vehicle shopping process.

Video can be found here:  https://www.carproof.com/car-advice/buying/what-is-a-lien

Wholesale Prices Push Down in May

Though wholesale prices remain elevated, rates were on the way down in the lanes this past month.

In May, the Manheim Canada Used Vehicle Value Index was down four points from April to sit at 98.9.

Though rates are falling from early-spring highs, this number remains up 12 points year-over-year.

That said, Don Wallace, general manager at Manheim Toronto, told Auto Remarketing Canada, "The industry is seeing softening to the hyper-inflated used vehicle prices of 2013.

Don Wallace, Manheim Toronto

"The first quarter of 2014 has shown more traditional levels. Retail new volume generating the majority of the auction business through dealer trades is noticeably, as well," Wallace said. "Prices have also been inflated due to U.S. buyers, or exports to U.S. by Canadian sellers, which have declined in the past quarter, as well."

All vehicle categories Manheim Canada tracks decreased month-over-month.

When asked what is pushing the index down in 2014, Wallace said, "Several manufacturers have experienced shortages in new vehicle deliveries for the 2014 model year, but productions has now caught up to demand, influencing late model demand at auctions."

Compacts led the way in May for price declines, with a 7.8 point decrease on the index.

This trend is primarily due to prices at the pump.

"Compacts have steadily declined in the past year as consumers have adapted to current pump prices. This has become the norm every time we see spikes in the price of gas after initial quick run ups," Wallace explained.

Vans followed with a decrease of 5.1 points; mid-size cars fell by 4.9 points; luxury cars dropped by 3.6 points; and pickups dropped by 2.4 points.

The smallest price drops seen this month was in the SUV segment. These vehicles saw a drop of 1.4 points on the index.

"Pickups are still in very short supply. SUVs are tied to gas again where the buyers have been acclimatized to current price at the pump," Wallace said.

Looking ahead to the rest of the year, Wallace said, "Time will tell," but he predicts incentive movement might serve to push prices down further.

"I suspect more micro-economic factors affecting new vehicles sales will drive OEM's to adjust incentives to maintain sales volume, which will have a bigger effect on used vehicle pricing than economic conditions," he said. "If one or more of the top sellers' sales decline through the summer months then we can expect aggressive incentive spending to recapture business. Heavy incentive spending, which has been on the decline, would adversely affect used car prices. Seasonal prices are also expected to normalize to traditional adjustments."

http://www.redlineautosales.ca/wholesale-prices-push-down-in-may.htm