The Industry Drags Itself Across the 17-Million Mark Again

JANUARY 2020

The Industry Drags Itself Across the 17-Million Mark Again

Despite all the red numbers in the table on page 4, especially among the largest light-vehicle brands and manufacturers, the US auto industry was able to achieve a fifth consecutive year of total sales exceeding 17 million units, or 17.11 million, exactly.

Being the end of a quarter, General Motors, Ford, FCA and Tesla published their sales numbers, and the traditional Big Three ended the year with fewer units sold than for 2018.

Among the "Big Three" Japanese automakers, only Hyundai-Kia had a positive December and a respectable 2019 while Toyota's 2018 unit sales decreased 1.8% and Nissan continues to reel from many internal issues.

It's likely the smaller brands and manufacturers, collectively, overcame the deficits of the biggest automakers just to push the industry across the 17-million unit line.

Among the outstanding brand performances, Lincoln, at +12.7% for December, certainly helped Ford's total numbers to be better. Volvo was the big winner, increasing December sales by 40% over December 2018. Most dealers of Kia (+8.0%), Mitsubishi (+10.3%), Audi (+13.6%) and Porsche (+15.8%) had to be happy with their monthly performances.

With five consecutive years of 17 million+ sales, 2020 is likely to be a very interesting year as manufacturers focus on both keeping the traditional internal combustion vehicles rolling off the assembly lines and advancing the pending age of electric vehicles.

A New Year ? New Success Strategies

Comcast Cable's 11-member Automotive Advisory Council, which consists of digital, data and marketing analytics experts and highly experienced advertising professionals, offered three trends for 2020 that forward-thinking dealerships will want to consider and adopt.

1. A 21st century cost-efficiency media-buying model

The era of ratings for media buying will rapidly move closer to its end during 2020. The new model is a data-centric approach, using impressions. There will be more opportunities to gather real-time, almost totally accurate data from set-top boxes and other technologies to find and engage directly with the right consumers.

2. Progressive dealerships accelerate their digital transformation

Dealerships that expect to thrive into the 21st century will need a dedicated professional and/or staff to establish relationships

with many more vendors than just traditional media and ad agencies. These may include digital media agencies, data analysts and technology vendors providing new data-gathering and consumer-facing systems and tools.

3. Creative ad content must convey an exclusive benefit of buying from a dealership

One of the oldest concepts in advertising is still relevant during 2020: Consumers don't care "what you are," but "why they should buy from you," or the famous, "What's in it for me?" It's time (past time) for dealerships to stop boasting about the size of their inventory, etc. and clearly communicate the most beneficial reason(s) a consumer should buy from one dealership than another.

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JANUARY 2020

MARKETING FORWARD

EXCELLENT REPUTATION SCORES FOR LARGE DEALER GROUPS, PART 3

This is part 3 of Media Group Online's series about the automotive industry's Reputation Scores as presented in 's 2019 Automotive Reputation Report. Part 3 focuses on large publicly and privately held dealer groups. Part 2 in the December 2019 Automotive Update Report shared the top 10 brands according to their Reputation Scores.

Of the 11 dealer groups included in the report, Hendrick Automotive was first with a Reputation Score of 722 (the average per dealership in the group). For comparison, Lexus had the largest Reputation Score, or 672, among the 28 auto brands ranked.

Although Hendrick Automotive was first overall, AutoNation had the largest Visibility Score, or 84%, and Engagement Score, or 98%; however, Hendrick's Sentiment Score of 77% was the largest.

Look for the Reputation Scores of the top dealerships in part 4 in the February 2020 Automotive Update Report.

FINANCING STILL STYMIES CONSUMERS

The financing step in the car-buying process is still a major hurdle for consumers, according to the September 2019 Capital One Auto Navigator survey. A surprising, but consistent, finding

is just 26% of survey participants said they were very confident during their car-buying journey, and failing to plan their financing in advance was a major reason for 27% of consumers.

More than half of the survey respondents, or 52%, said they spend the most time (and frustratingly so) engaging with the finance department to finalize the numbers and sign paperwork.

The specific portion of the financing step that confuses many consumers is prequalifying. According to the survey, 88% understand this is different than the preapproval process; however, only half said they would want to prequalify their vehicle financing.

The study's authors concluded many consumers think prequalifying will affect their credit score, which is not the case. Prequalification only indicates an estimated loan amount for which the consumer would qualify, but without providing any verified personal financial data.

For a preapproval, a consumer must submit personal financial data that is then independently verified in addition to his or her credit score. A lender then approves the consumer for an exact loan amount.

Fifty-seven percent of survey respondents would like dealerships to improve the financing step with simple, open explanations of financing options and other steps in the process.

TOP DEALER GROUPS BY AVERAGE REPUTATION SCORE PER DEALERSHIP, JULY 2019

DEALER GROUP

Hendrick Automotive AutoNation Group1 Sonic Automotive Asbury Automotive Group Penske Lithia Ken Garff Automotive Larry H. Miller Berkshire Hathaway Automotive Greenway Automotive

, September 2019

AVG. REPUTATION SCORE

VISIBILITY SCORE

722

77%

704

84%

696

77%

693

78%

673

77%

656

63%

641

74%

638

69%

636

76%

618

67%

592

70%

ENGAGEMENT SCORE

91% 98% 89% 86% 95% 83% 55% 82% 81% 67% 47%

SENTIMENT SCORE

77% 68% 72% 70% 64% 76% 68% 65% 62% 69% 63%

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JANUARY 2020

ROAD SIGNS

THE CYBERTRUCK IS SOON TO HAVE MANY RIVALS

Elon Musk and his Cybertruck may have been receiving all the media coverage about the future of electric pickup trucks (despite the "unbreakable" windows that broke), but many more are expected to hit the market during 2021 when the Cybertruck will first be available.

Although many of the major, traditional automakers have been skeptical and wary of Musk, he has proven to be a serious player with his Tesla brand and his Cybertruck generated 200,000 reservations during the first three days after the announcement.

No doubt, the other manufacturers planning electric pickups took notice of the consumer interest. After all, on average, a bit more than 3 million pickups with internal combustion engines are sold in the US annually.

Some of these other players in the electric pickup sandbox include major automakers, such as General Motors, as well as a number of startups, Lordstown Motors Corp., Bollinger Motors, Hercules Electric Vehicles and Atlis Motor Vehicles ? and maybe the best known startup, Rivian, which has investment dollars from Ford and Amazon.

Industry eyes are also on Lordstown Motors Corp. since it bought the former GM assembly plant in Lordstown, OH and expects to hire many of the auto workers who lost their jobs when the plant closed.

Collectively, these companies estimate they will produce as many as 250,000 EV pickups per year by 2024, although some industry analysts think this is a highly ambitious goal and 70,000 per year may be a more realistic expectation.

ROBOTIC CHARGING STATIONS MAY SOLVE MAJOR ELECTRIC VEHICLE CHALLENGE

Although transformative transportation technologies, such as electric vehicles (EVs) and autonomous vehicles (AVs), may still seem like some future innovations, many companies are working on various aspects of these technologies to overcome their common challenges.

The process of charging an electric vehicle has been one of those challenges. To date, charging would either occur at home or at a charging station, conveniently located similar to a gas pump. Many are concerned about the time it will take to charge an EV, especially on the road, as consumers will expect the process to require no more time than to fill a tank with gasoline.

Volkswagen may have solved this problem, or at least presented the world with a possible solution: an autonomous EV charging robot. It is approximately half the size of a gas pump and comes to an EV instead of requiring the EV owner to drive to a charging station.

Parking garages, large companies and even the parking lots at a shopping mall, amusement park or sports facility could employ a number of these robots to roam among the cars to charge those that request some juice.

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JANUARY 2020

MONTHLY AUTOMOBILE SALES CHART

NOTE: General Motors, Ford, Fiat Chrysler Automobiles (FCA) and Tesla announced their light-vehicle sales for Q4 2019. Their brands are included in this month's sales table and reflect actual sales.

RANK

#1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11 #12 #13 #14 #15 #16 #17 #18 #19 #20 #21 #22 #23 #24 #25 #26 #27 #28 #29 #30 #31

AUTO BRAND

Ford Chevrolet

Toyota Honda Nissan Jeep

Ram Hyundai Subaru

GMC Kia BMW Lexus Mercedes-Benz* Dodge Volkswagen Mazda Audi Tesla Acura Buick Cadillac Chrysler Lincoln Volvo Infiniti Land Rover Mitsubishi Porsche Jaguar Mini

DECEMBER 2019

209,386 190,798 172,047 120,433 93,538 74,653 73,098 64,720 62,364 58,365 51,229 35,746 35,325 35,279 32,203 27,877 26,491 25,850 18,600 16,133 16,069 15,478 13,887 12,994 12,360 11,243 10,490

9,915 4,733 3,311 2,310

% CHANGE FROM DECEMBER 2018

+0.6% -4.9% -7.2% -12.9% -28.4% -7.2% +7.2% -0.6% -3.4% -5.4% +8.0% +4.0% -0.6% -2.4% -1.0% -13.0% +2.4% +13.6% -7.0% -3.8% -10.9% -7.6% +11.8% +12.7% +40.0% -37.8% -1.2% +10.3% +15.8% -4.4% -17.4%

2019 YEAR TO DATE

2,293,984 1,958,925 2,085,234 1,450,785 1,227,973 923,291 703,023 688,771

700,117 564,946 615,338 324,826 298,114 357,729 422,886 363,322 278,552 224,111 223,200 157,385 206,929 156,246 126,971 112,204 108,234 117,708 94,736 121,046 61,568

31,051 36,092

% CHANGE FROM 2018 YEAR TO DATE -3.7% -3.8% -2.0% +0.3% -8.7% -5.1% +17.7% +3.2% +2.9% +1.5% +4.4% +4.4% -0.1% +1.0% -7.9% +2.6% -7.3% +0.4% +34.5% -1.0% 0.0% +1.0% -23.5% +8.3% +10.1% -21.2% +2.8% +2.5% +7.6% +1.9% -17.4%

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JANUARY 2020

RANK

#32 #33 #34 #35 #36 #37 #38 #39

AUTO BRAND

Genesis Maserati

Fiat Lamborghini?

McLaren? Bentley? Rolls-Royce? Other

DECEMBER 2019 2,225 925 467 232 180 169 110 328

% CHANGE FROM DECEMBER 2018

+262.4% -2.0% -52.5% +16.0% +52.5% -2.9% +1.9% +2.2%

2019 YEAR TO DATE

21,233 11,100 9,200 2,784 2,286 2,028 1,320 3,936

% CHANGE FROM 2018 YEAR TO DATE +105.9% -0.9% -40.7% +74.5% +67.1% -2.0% +1.9% +2.2%

General Motors Corporation

Ford Motor Company

Toyota Motor Corporation Fiat Chrysler Automobiles American Honda Motor

Company Hyundai-Kia Automotive Group Nissan Motor Company/Infiniti / Mitsubishi

Volkswagen Group

BMW Group

Mercedes-Benz USA

Jaguar/Land Rover

TOTAL

280,710 222,380 207,372

197,143

136,566

118,174

114,696

58,861 38,166 35,279 13,801 1,543,471

-5.5% +1.3% -6.1%

-0.2%

-12.0%

+4.4%

-27.3%

-0.7% +2.4% -2.7% -2.0% -5.2%

2,887,046 2,406,188 2,383,348

2,214,763

1,608,170

1,325,342

1,466,727

653,813 362,238 358,409 125,787 17,108,156

-2.3% -3.2% -1.8%

-1.4%

+0.2%

+4.6%

-9.0%

+2.4% +1.8% +0.8% +2.6% -1.2%

Source: Automotive News, January 2020 * Includes Mercedes-Benz vans Includes Aston Martin, Ferrari and Lotus estimates Includes Audi, Bentley, Porsche and Volkswagen brands, but not Lamborghini ? Automotive News estimates Automotive News has stopped listing Smart sales ? 2020 Media Group Online, Inc. All rights reserved.

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