30 October 2009

The Best In 2009

In various motoring fields, there are those that stand out for some reason. To celebrate these successes, this is my 'Best' list:

Most Reliable. I would say Lexus. It seems to get top spot whenever this feature is rated. As for an affordable, regular hack, Toyota have always been viewed as very reliable. Pity they are so boring with it.

Best Value. Both Hyundai and Kia. They sell very strongly on their price advantage. They are now offering more and more class with each new model, yet still seem to undercut the opposition on value for money. It baffles me as to why Korea continues to protect them with high import tariffs on imports in their domestic market. They don't need it any longer.

Most Beautiful. Aston Martin. Each and every variant within the range is like a super model, gorgeous. As for more affordable marques, none seem to get it right across the board with all their models.

Strongest Brand. Toyota. According to Interbrand, it came in 8th for all categories and top in the automotive field.

Biggest Selling. Toyota in 2008, just pipping GM. VW Group is closing in though, while GM is falling away. Toyota's two main markets are the US and Japan, both in bad shape. Toyota has the broadest success overall of any car maker though.

Best Prospects. VW Group. It's strongest markets are China and Germany, both doing well. It has also saved costs cleverly through it various brands, without getting complaints about Audi sharing a Skoda platform.

Most Underrated. Jaguar. The current range of XK and XF along with the new XJ equals or surpasses anything the competition has. Yet Jaguar are struggling to sell cars. British industry has incredible design talent and lousy marketing skills. People would buy a turd if it had a BMW badge on it, such is the German marketing machine. Watch how they do it and learn, Jaguar.

Safest. Volvo have led the way with safety over the years and still seem to lead, although the gap may have narrowed.

The bottom line: Toyota may be best overall, but I get the impression they have faltered of late for the first time ever, and for once have a air of vulnerability.

26 October 2009

Chinese Whispers

Many countries provide car sales figures from government agencies, importer associations or the like. They give out sales data freely in varying degrees of detail that are accurate from year to year. There may be variances in the way they are tabulated from one country to another, but not to any great degree. On the the other hand, some countries do not seem to have any statistics available except what is issued on the payment of sizable fees. Sometimes, one comes across the latter stats by chance and can get an idea of what's going on.

China car sales data is of the second type. The problem is it is hard to find and what you do find is scrambled, just like the Chinese car industry itself. The problem seems to be that China imposed steep import duty on the importation of fully built up cars. To sell cars then, one then needed to make them locally. The government then insisted that this could only be done with a Chinese joint venture partner. I presume this is so they can learn the car making skills, which they can then use to make their own cars too.

Anyway, it works out that an overseas brand of car can be made by more than one joint venture. Then the Chinese partners also can make their own brands too. Most data you find is of production and some counts all production irrespective of the make, while others report it by the brand. It's hard to tell the difference and if you try, it turns out a mess. Much like the industry as a whole.

The upshot is: the largest car market in the world (by units sold at least) does not have any standard accounting of sales or production by brand that you can rely on. What's the big secret? Is it a matter of Chinese whispers?

The bottom line: Wake up China. You can do better than this.

24 October 2009

Citroën Production: 2008

Citroën means lemon, due to the founders ancestral heritage of lemon selling in Amsterdam. Anyway, it also means a poorly made car which makes it an unfortunate name. Production has been solid of late, and Citroën has held world market share for the last few years. In 2008, 1,380,000 cars/LCVs were made, roughly the same as 2005. 48% of production was French, with Spain on 32% in the year of '05. That means 80% of cars were made in two countries, adjacent to each. That makes little sense to me as factories need to be close to markets if possible. That will surely happen in the future.

A new plant in lower wage Czech Rep has helped but the brand relies too much on Europe. Car making by country is as follows for '08:

France 43% 590,000
Spain 25% 340,000
Czech Rep 8% 110,000
China 6.5% 90,000
Italy & Brazil 4% 55,000 each
Turkey 2.4% 34,000
Portugal 2.3% 32,000
Portugal 30,000 1.5%
Rest 2.5% 35,000

Citroën is a contradiction in how it survives. As part of the PSA Group along with Peugeot, it sells similar products to its stablemate and is rarely seen outside of Europe. It's slightly quirky style and history gives it a loyal following. It also keeps going by virtue of development cost savings with Peugeot but one senses that may not be enough long term.

The bottom line: Citroën needs to broaden it's range and global presence. Reliability and a more solid feel about them would help too.

22 October 2009

The BAM Effect

What is the BAM effect? Well, it stand for BMW, Audi and Mercedes Benz. Individually, they compete against each other, but collectively they put up a persuasive argument that buying a German brand executive car is the way to go. In the same way a tsunami wave persuades you to head for the hills. Now, apart from the BAM brands, the other premium marques that are sold widely are Volvo, Lexus and Jaguar/Land Rover (JLR). The latter come from differing countries and don't have that block effect to promote their nation as a maker of fine automobiles, in the way Germany does.

So I decided to compare the market share in 26 varied markets to see how the BAM effect works. The statistics used are for cars/SUVs and for year 2008. Some countries exclude certain models and include others, so it's not perfect. For Land Rover, I have included all 'excludes' so to speak, so the figures slightly favour JLR. However, it still gives a good picture overall. The percentages are what the BAM brands, and others individually, get in a given country. All their sales are combined which equals 100%, and then divided up between them to see what each individually gets. Now for the stats.

BAM are strongest in Germany (95%) , Portugal (90) , France (89) , Austria & Spain (88) , Greece (87), Italy (86), South Africa or RSA (84), Belgium (83) and Switzerland (81). The Bam trio do worst in Sweden (41%), Russia (49), Finland & The US (60).

Lexus does best in the US (28%), Japan (21), Korea & Canada (20). It fails miserably in Brazil, Germany & Italy (around 0.5), Finland, Belgium, Norway & Austria (less than 1%).

Volvo win in Sweden (58%), Finland (37) Norway (30) & the Netherlands (20). It loses out in Germany (3%), RSA (4) and NZ (5).

Finally, JLR score in Brazil (25%), Russia (20), UK (15) NZ (13) & Eire (11). They strike out in Sweden & Germany (1%), Portugal & Norway (2), Greece, Finland & Japan (2.5), France & Austria (3.5).

Three nations didn't get listed here as they are less extreme in their buying preferences. These were Romania (like JLR 10%), Australia (Lexus leaning for 11%), and Poland (keen on Volvo 18%).

When one looks at the chart as a whole, BAM brands dominate in Europe, Volvo are strong in Scandinavia, Lexus Asia and North America while for JLR it's in the emerging nations. The least international of these brands seems to be Lexus.

As the BAM marques widen their range and aggressively attack world markets, expect their share to rise in 2009. The others, competing individually will slip back.

The bottom line: The BAM effect - three brands form one nation in the premium segment - works.

18 October 2009

ADAC Quality Survey

ADAC (Allgemeiner Deutscher Automobil-Club) is Germany's and Europe's largest automobile club. In a customer satisfaction survey it did in 2008 I believe, the results were interesting. The best score was for Subaru on 1.2. Next with 1.3 were Jaguar, Honda and Porsche. The score of 1.4 went to Daihatsu, Mazda, Mitsubishi, Saab and Toyota. At the other end, 1.8 scores were for Fiat, Smart and VW. 1.9 for Land Rover and Peugeot. 2.0 for Chevrolet (Daewoo cars once) and 2.1 for Renault all alone at the bottom. The nine at the top were comprised of six Japanese brands, while there were one each for Britain, Sweden and Germany. The bottom seven were made up of two each for French and German brands, one a piece for Britain, Korea and Italy.

It's probably fair to say that satisfied customers often results in repeat sales as punters return. However, I don't have statistics of how many stay with a brand in Germany. It was of interest to see that German brands were not that good at satisfying their buyers, although most German car buyers are very narrow minded in their loyalty to local product in their new car purchasing.

The bottom line: The Japanese are good at satisfying their customers. Jaguar does too, but they just need more customers.

09 October 2009

Kia Production: 2008

Kia claim they have the power to surprise, but I must say their range does nothing to surprise me. They do sell rather well, based on value rather than surprise factor or innovation. The new model Soul (pictured) is trying to break that mould. Production of Kia cars/LCVs went from 1,140,000 (1.8% worldwide share) in 2005 to 1,395,000 (2.1%) in 2008. One change is that whereas 95% of Kias were made in South Korea in 2005, that has quickly moved down to 76% by 2008. They were still only made in three countries in 2008, as the statistics below show:

Korea 1,050,000 76%
Slovakia 202,000 14,5%
China 140,000 10%

Kia is benefitting from many of the scrappage shemes doing the rounds presently, as they do make mostly smaller vehicles and these have benefitted the most. However, when they cease, as they are now doing, that will reign back increase. Still, one can only assume they will continue to grow steadily for the time being. How they move forward with new models and an expanded model range will determine how they fare further down the line.

The bottom line: The Chinese are coming, so moving up in quality is where Kia is at the moment.

Daimler Production:2008

Daimler (or Mecedes Benz to the great unwashed) has been holding it's world market share of late. In 2005, 2.2% (1,350,000) and in 2008 2.3% (1,516,000). Of the 2008 figure, 1,240,000 were cars and 276,000 LCVs. 81% of MB production was in Germany in 2005 and it is now 74%, so not a vey international company when it comes to where the cars are produced. In 2008, the country breakdown:

Germany 1,120,000 74%
USA 152,500 7%
RSA 55,000 3.6%
Argentina 31,000 2%
Brazil 27,000 1.8%
China 25,000 1.6%
Rest 6,000 0.5%

One would think they would try to make more vehicles away from the Fatherland but it doesn't seem to be hurting them one bit, so why would they?
With Daimler's reputation for building solid, premium cars, it's future will be stable. I must say the cars do nothing for me. They are the 'Toyota' of the premium sector and that safeness appeals to many obviously.

The bottom line: Steady as she goes.

04 October 2009

Chrysler Production: 2008

Chrysler is a surprisingly narrow company. By that I mean it makes and sells nearly all its vehicles in North America. At times it has threatened global expansion but it hasn't done so. As to why, I can only assume it was they didn't make cars that had enough international appeal. Or perhaps didn't try very hard enough. Either way, it has ended up a case of too many eggs in one basket. Anyway, Chrysler's world market share plunged from 4.4% in 2005 to 2.8% in 2008. Yet 2009 will be much worse. Chrysler production for 2008:

USA 1,100,000 58.5%
Canada 480,000 25.5%
Mexico 270,000 14.5%
Austria 28,000 1.5%

With shrinking market share in its few key markets, it was all over rover...until Fiat came along. They have taken control and have designs to use Fiat's small car expertise to help them, with Chrysler's large car, SUV experience helping Fiat. Sounds good but I am a little sceptical. Chrysler product needs much work in many areas. I would like to say it can only go up from here, but it can and will go down.

The bottom line: Can Chrysler become profitable any time soon? Hmmm.