January 22, 2013

$30,000 is the New Luxury Car Hot Spot

There's a new price battleground – $30,000 – for luxury-car makers as they chase younger buyers with small front-wheel-drive vehicles that are sliding down into mass-market territory. Mercedes-Benz, BMW, Audi, and others are going after the 75 million 30- to 40-year-olds who are forcing "the biggest changes the automotive industry will face," said Bernie Glaser, head of marketing for Mercedes-Benz USA. "They have big expectations for products and brands." Those buyers cannot and will not pay the $40,000-plus sticker prices some of their status-conscious baby boomer parents can afford, industry researchers say. Yet they demand "attractive highly styled cars and the right technology," Glaser said. According to Automotive News, non-luxury brands are likely to feel the heat from new models such as the Mercedes-Benz CLA, which was shown to journalists just before the Detroit auto show. The young shoppers targeted by Mercedes, BMW, and Audi want fuel-efficient four-cylinder engines – the engines most luxury brands shunned for the United States until two years ago – without compromised performance. Many of the cars will be front-wheel drive, although they'll perform like luxury vehicles, Mercedes-Benz and BMW executives say. Click here for coverage of the new luxury car hot spot.

Battery Carmakers Hope to Hit the 'Tipping Point' in 2013
Sleek and impossibly low, the Acura NSX concept on display at Cobo Center will bring back a once-legendary nameplate when it goes back into production in early 2015. The high tech powertrain will feature two electric motors up front, one for each wheel, with a third motor and a V-6 engine sending power to the rear axle. Acura parent Honda Motor Co. was one of the first automakers – along with rival Toyota – to adopt a hybrid driveline. And like Toyota, Honda is rapidly expanding the use of battery-based technology in its product portfolio. There's a new plug-in version of the popular Accord sedan, as well as a pure battery-electric Fit subcompact. Honda is by no means alone. Indeed, reports The Detroit News, a walk through this year's North American International Auto Show reveals that virtually every automaker now offers some form of battery-based powertrain technology or will soon have one in the lineup. The industry appears to remain not only committed, but willing to press even harder to make a go of battery power. Toyota Group Vice President Bill Fay believes the increasing number of products on the Detroit show floor will help "increase awareness" and give demand a boost. For more on battery vehicle power, click here.

The Best Cars for Commuters in 2013
The overwhelming majority of Americans commute to work in a private automobile. According to “Commuting in the United States: 2009,” the U.S. Census Bureau’s most recent study on the subject, over 105 million of us drive to work alone each work day, representing 76.1 percent of the total workforce. The mean journey to work takes 25.1 minutes. That’s a lot of time behind the wheel for a lot of people. With so many drivers spending so much time commuting, the choice of car is vital. So, Forbes has compiled a list of the Best Cars for Commuters for 2013. The publication honed its selection from the Consumer Reports list of Recommended Cars. To be recommended, cars must perform well in the Consumer Union’s “more than 50 tests, have average or better predicted reliability; and perform adequately if included in a government or insurance industry crash test.” Forbes has identified five different commuting categories, and has selected two cars for each category. The commuting categories are Short Commute, Long Commute, Carpool, Winter Commute, and Summer Commute. Click here to see a slideshow of Forbes’ list of the best cars for commuters. Read more about the list and how vehicles were selected by clicking here.

Autos Playing Catch-Up in Digital
Nearly four of five U.S. vehicle owners say the auto industry lags behind other online retailers in effective use of digital media, a survey shows. Of that group, 90 percent say better digital media would significantly cut the time needed to buy a vehicle. According to Automotive News, the survey for consulting firm Accenture by Coleman Parkes Research polled 1,000 U.S. vehicle owners and 12,000 non-U.S. owners in August and September. Anant Kamat, a managing director with Accenture's automotive practice, said shoppers' online experience will grow in influence, but will never replace face-to-face communication in a showroom. Despite the need for improvement, 28 percent of U.S. respondents said they were very satisfied with their online purchasing experience and an additional 51 percent said they were satisfied, the survey showed. They also were pleased with their overall buying experience online and in the showroom. The survey showed that 40 percent were very satisfied and another 39 percent were satisfied. Two of three U.S. respondents said dealer Web sites were very influential or influential in the decision to buy a vehicle, while three of four respondents said factory Web sites influenced their decisions. Click here for more on Accenture’s survey findings on car buyer experience.

Honda Recalls 748,000 Pilots, Odysseys for Airbag Risk
According to USA Today, American Honda said that it is recalling about 748,000 of its recent-model Pilot SUVs and Odyssey minivans for improperly assembled airbags. Honda said the plastic cover for the driver-side bags may not have been attached with the correct number of rivets and if rivets are missing, the airbag may not deploy properly in a crash. The recall covers 2009 to 2013 model year Pilots and 2011 to 2013 Odysseys. The recalled vehicles will be inspected and the driver's-side bag will be replaced if it is defective. Driver's-side airbags in these vehicles potentially were assembled without some of the rivets that secure the airbag's plastic cover. If the rivets are missing, the airbag may not deploy properly, increasing the risk of injury in a crash. No crashes or injuries have been reported related to this issue. Honda said it knows of now crashed or injuries related to the defect. Honda will begin notifying owners in the middle of next month, but said owners can check now to see if their vehicle will need the repairs by using their Vehicle Identification Number (VIN) and going to www.recalls.honda.com or calling (800) 999-1009, and selecting option 4. Click here for more on Honda’s airbag recall.

Join Federated Insurance in Orlando
Are you wondering about what is going on in the property/casualty and workers compensation marketplace? Successful dealers know their insurance premiums are an important link to the overall health of their bottom line. Stop by NADA tradeshow booth #2210 to meet the folks from Federated Insurance, and find out why they have been AIADA’s recommended insurance provider since 1996. They’re ready with information on their Self-Insured Retention program, and details on their auto dealer Designated Risk Manager Training Seminar. Federated offers insurance products customized for auto dealers. They know our industry and are ready to help you develop an insurance plan that will not only help protect you and your business, but your future as well.

Around the Web
Toyota Exec Sees Future Where All Cars Sold in U.S. Are Built Here [Autoblog]
2013: The Year of the Woman Car Buyer [Auto Remarketing]
Batmobile Sells for $4.6 Million [CNN Money]
Matching Celebrities to Vehicles at NAIAS [Detroit Free Press]

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