Canadian sales at the mid point of 2010

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Canadian sales at the mid point of 2010

  1. 1. By<br />Strada<br />July 2010<br />Canadian Sales Mid Point 2010<br />
  2. 2. The BuzzSales are horrible a comeback is imminent.Its just around the corner…the comeback!<br />We said repeatedly that 2009 was not so bad, and obvious we did not expect 2010 to be a quantum leap from 2009.<br />Whoever believed and abided by the mantra that 2009 was an horrible year, made specific decisions and deployed relevant tactics.<br />The ones concluding that 2009 was not so bad, while providing insight into the “new normal” made decisions, and deployed tactics to evolve within a new reality.<br />
  3. 3. Sales NumbersEveryone presents numbers to burnish their image.<br />More pundits are increasingly involved in expressing opinions, and commenting on monthly sales numbers.<br /> Its becoming interesting and entertaining.<br />Yes…there are a myriad of nuances on how numbers are presented, seen, perceived, disseminated, compared, analyzed….it depicts different images of the same results.<br />
  4. 4. How does Strada Look at Numbers To acquire insight, and understanding, while seeking simplicity.<br />The auto industry is competitive, always has been, always will be. <br />The product is raced. <br /><ul><li>We see numbers from a competitive perspective.</li></ul>We see numbers from a strategic / tactical perspective.<br />We look at numbers to predict the next move, the next trend, and outcome. <br />We see numbers to gain clarity in the Canadian big picture.<br />
  5. 5. What Do We See at the Mid Point?At the end of the 1st Quarter + 15%End of 2nd Quarter + 9.1%What is the trend?<br />April and May were comparable to 2009, and must have raised questions for some manufacturers.<br />There are 786 K new vehicles sold in Canada which would indicate a year end total of 1.5 M it will be interesting to see how the second half develops. <br />The Koreans are doing to the Japanese, what the Japanese did to the domestics.<br />If a manufacturer loses sales in a recalibrated market will they ever regain the sales.<br />For the first time in countless years, Ford is the leader at the mid point.<br />
  6. 6. KoreansOnly 2 manufacturers, that are joined at the hip, they are both on an upward sales vector with appreciable momentum.<br />The economic downturn was advantageous to the Koreans.<br />They offer good products with numerous standard features, at reasonable prices, for a compelling value proposition.<br />The styling of their latest offerings is leading edge, yes…the Korean understand that styling sells.<br />If they want to sell additional units, they activate a monthly program to further stimulate sales. <br />Thought: Who is losing sales to the Koreans?<br />
  7. 7. JapaneseOne manufacturer (T) stepped on a “banana peel” its understandable that their sales are lagging. Although their luxury division is doing well.<br />Another manufacturer (H) is an enigma, and inexorably becoming a shadow of its former self. The luxury division is in the same situation.<br />Another manufacturer (N) is holding its own, with their luxury division having an appreciable increase in sales.<br />Still another (M) is also holding its own with an increase in sales. <br />The manufacturer (S) with dramatic sales increases is doing well, while selling less vehicles than a German luxury manufacturer. <br />The manufacturers with less sales volumes, one is slightly behind last year, the other seems to have made a decision to concentrate on their motorcycle business.<br />
  8. 8. DomesticsFair to say that change has been the operative word, as well as emerging from the brink of disaster for some.<br />We expected Ford to displace GM as the sales leader in Canada, its now a done deal.<br />Chrysler has regained its “mojo”. These guys know how to move iron when they want to.<br />GM is still mourning the loss of Pontiac, and leasing. We are still observing Cadillac.<br />These manufacturers offer good products, their market share is increasing.<br />Thought: Who is losing market share to the domestics?<br />
  9. 9. GermansWith a robust upward sales vector while raising entry barriers for the sweet spot of their market segment. Similar to the halcyon days of Detroit.<br />They have the entry level luxury market be it for cars or CUV’s almost cornered . <br />To compete amongst themselves they are fearless in putting “skin in the game” to augment their share of the entry level and luxury market. <br />One manufacturer that is not in the luxury segment, is doing well with some of its newer models.<br />The one that deals primarily with sports cars is ahead, aided by new models. <br />
  10. 10. Dynamic PricingCanadians love “DEALS” Be it the price, the financial package, the optics of exceptional value.<br />At the mid point some manufacturers have a clearer understanding of satisfying the insatiable craving for a “deal”.<br />Manufacturers have the technology/personnel/ resources to analyse any and every aspect of individual models and markets across Canada.<br />They disseminate their monthly sales (previous month), and their monthly promotions (coming month). <br />Dynamic pricing can easily alter the monthly sales results + unsettle competitors.<br />It’s the reason we prefer to look at quarterly results.<br />
  11. 11. Recalibrated MarketThe Canadian Market has been adjusting for several months.<br />The manufacturers that acknowledged a recalibration with a few exceptions are doing quite well.<br />The manufacturers waiting for the 07 or 08 market to reappear are not doing as well. <br />In a recalibrated market gaining new sales is the preferred direction, losing sales is not an option.<br />Thought: If you lose sales to a competitor , when will you regain the lost sales? <br />Thought: Would you rather sell 8 and make 90, than sell 10 and make 100…makes for a fascinating PPT.<br />
  12. 12. Transcend WinterMost of the Canadian market endures several months of winter. Consumers seek to transcend winter conditions. <br />Manufacturers that have grasped “transcending winter” by offering AWD vehicles with distinctive styling accompanied by “dynamic pricing”…have market winners.<br />Turning a FWD platform into AWD is cost effective repositioning / rebranding. <br />Transcending winter while being “green” is a win. <br />Transcending winter with a multi purpose utility vehicle is another win. <br />Transcending winter with a genuine 4x4 truck is another win.<br />Fuel economy is not a win.<br />
  13. 13. Certified Pre OwnedManufacturers are measuring their CPO sales. A trend that will continue while further enabling sales of new vehicles.<br />Consumers are responding enthusiastically and positively to manufacturer supported CPO programs.<br />Consumers perceive increased peace of mind with a CPO vehicle.<br />Manufacturers and dealers love CPO vehicles for a myriad of reasons/agendas/ strategies.<br />Yes…they are making money twice with the same vehicle.<br />1- Marketing when new, 2-Remarketing when used.<br />
  14. 14. Compact<br />Mid Size Sedans<br />Honda Civic……..26,905<br />Mazda 3………….26,383<br />Toyota Corolla…...24,873<br />From our perspective the Mazda 3 is the undisputed leader in this segment, both the Civic and Corolla have less units this year than last year. While the Mazda 3 has increased.<br />Fascinating to see how the second half will develop.<br />Sales results from: Automtive News<br />Ford Fusion………..11,109<br />Toyota Camry………7,915<br />Hyundai Sonata…….7,228<br />Honda Accord………7,058<br />Chevy Malibu……….6,969<br />Nissan Altima……….6,823<br />Mazda 6……………..3,014<br />Competitive segment, with good product offerings. The Sonata is ahead of the Accord. Why is the Mazda 6 so low?<br />The most popular is the Fusion, way ahead of all the others.<br />Some Numbers YTD June 2010<br />
  15. 15. CUV/SUV<br />Pick Ups<br />Ford Escape…………22,078<br />Honda CR-V…………13,542<br />Hyundai Santa Fe…...13,416<br />Toyota RAV4…………11,987<br />Chrysler Journey…….10,524<br />Chevy Equinox………..9,297<br />A very competitive segment, Hyundai is breathing down Honda’s neck in this segment too. <br />There are other offerings and competitors in this segment. <br />Ford F Series……………46,610<br />Ram……………………...25,674<br />GMC Sierra……………...22,510<br />Chevy Silverado………...20,146<br />Pick up sales are through the roof compared to last year. Ford remains the undisputed leader in this segment. Ram has come from last to second place.<br />Canadians want pick ups and are financing them for increasingly longer terms. <br />Some Numbers – 1YTD June 2010<br />
  16. 16. Entry Luxury <br />Luxury CUV/SUV<br />BMW 3 Series………….6,162<br />M-B C Class………...…4,376<br />Audi A4…………………2,642<br />Infiniti G…………………2,180<br />Buick LaCrosse………...1,695<br />Cadillac CTS……………1,643<br />Acura TL………………...1,351<br />Lexus IS………………....1,172<br />The numbers are revealing and self explanatory. <br />Lexus RX………………..3,736<br />M-B GLK………………...3,075<br />Acura MDX…………...…2,983<br />Buick Enclave……….…..2,207<br />BMW X5……………….…2,101<br />M-B M Class………….….1,827<br />BMW X3…………….……1,656<br />Acura RDX……………….1,579<br />Audi Q5…………………...1,508<br />Cadillac SRX……………..1,297<br />The vehicles are popular, its competitive. <br />Some Numbers – 2YTD June 2010<br />
  17. 17. Pony Cars<br />Did You Know?<br />Mustang…………….2,667<br />Camaro……………..2,643<br />Challenger………….2,022<br />Still a reminder of the Trans Am races of 40 years ago.<br />The strategy of offering and promoting the 6 cylinder engine is working.<br />SLS AMG……………….39<br />Lamborghini……………..36<br />Maserati………..………..79<br />Ferrari…………..………..50<br />Panamera……….….…..201<br />GT-R…………….…….…40<br />R8…………………….….57<br />Bentley…………….…….38<br />Some Numbers – 3YTD June 2010<br />
  18. 18. The DealerWhere the auto industry meets/interfaces with the customer. As the market recalibrates, dealers recalibrate. <br />There have been numerous dealer recalibrations in Canada. <br />With altering sales results from the manufacturers. The recalibration process continues.<br />The values of the various franchises are in a state of flux. <br />The product is more complex.<br />While the customers is increasingly more demanding.<br />
  19. 19. Our Thoughts<br />Last year (2009) was tumultuous generating “sea changes” in the automotive landscape, mind you the sales results were acceptable.<br />The sea changes provoked a dramatic recalibration of the Canadian automotive landscape, with the ensuing domino effect.<br />Historically the auto industry abhors a “vacuum”, which is instantly filled by competitive forces. <br />Some manufacturers created a vacuum, while other manufacturers immediately filled the vacuum. In 2010 there is no vacuum, its filled.<br />Sales are acceptable since what one lost (vacuum creator), another immediately gained (vacuum filler).<br />The ultimate winner is the consumer/customer.<br />Thank You<br />

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