United States

General

During my stay in USA I had subscriptions to several car magazines ’’Car and Driver’’, ’’Motortrend’’, ’’Road & Track’’, ’’Automobile’’, ’’Auto world Magazine’’ this was a biweekly before; & Autoweek (weekly). Well, a big list but I really enjoyed all these magazines getting delivered in my mailbox every month/week!!! I miss these mags in India but thanks to their web-site I can still stay in touch! :)

I thought Indians would find it very interesting to know some facts about the USA Automobile industry. To begin with, it is a HUGE industry! The sheer size of new cars sold each year is mind boggling to an Indian. The average number of cars sold in USA is 17 million. i.e. 1.7 crore!! or 170 lacs. The year is counted from Jan to Dec instead of March to March as in India.

Honda’s Accord & Toyota’s Camry have been consistently the volume leaders with 400, 000+ of each sold per year i.e. almost a million units of Accords & Camrys are sold taking the major chunk of the new midsize car market. Accord & Camry are categorized by EPA (Env Protection Agency) of USA as ’’midsize’’. To compare Ford Icon would be termed as ’’sub-compact’’, Same with Honda City, Toyota Corolla & Honda Civic are termed as ’’Compacts’’. The norm being less than 86? cubic feet interior is termed as Subcompact 86 to 96 is termed as compact & 96 to 103 (?) as Midsize, above that it called as Full-size. Chevrolet Impala & Ford Taurus, with Toyota Avalon are termed as Full-size cars.

The major chunk precisely 50+% is taken by the SUVs & The ’’Pickup-trucks’’. Traditional ’’Body-on-frame’’ SUVs that are popular are Ford Explorer, Expedition, Chevrolet Trailblazer, GMC Envoy, Toyota Sequoia, Toyota Landcruiser etc. There is a new generation of SUVs that have rocked the market that car ’’CAR-Based’’ are Honda Pilot, Toyota Highlander, Nissan Murano, Acura MDX, Lexus RX330, BMW X5, M Benz ML330/ML500 . Cute-utes i.e. Smalls popular SUVs are Honda CR-V, Toyota RAV4, Jeep Liberty etc. This category of vehicles have taken the market share from Midsize cars & traditional SUVs. Every Automaker is coming up with newer SUVs & updating their current SUVS in this segment.

Other vehicle category is Minivans: they are also car platform based but accommodate 7/8 people but suffer from an image point of view. A minivan suffers due to image of being ’’soccer-mom-mobile!’’ Midsize SUVs are becoming more & more popular & affecting this segment the most. Honda’s Odyssey & Toyota’s new Sienna revived interest with Odyssey setting record sales & Honda adding a new plant & 2 shifts to meet the demand! New Sienna also has taken the market by storm. New Nissan minivan made this segment all the more interesting with different kind of styling inside out.

Small cars are non-existent. They were before in Geo Metro & Suzuki Swift (Zen in India) but have been discontinued due to lack of public interest.

Sub-compacts cars where Hyundai Accent (midsize in India!), Kia Rio play is also a very small segment. Recent market penetration by Hyundai by giving 10 year warranty has paid well & they have taken some market share. GM recently introduced Suzuki Verona which is essentially the Chevrolet Optra in India. This car is doing alright currently.

Compact segment is where Honda Civic & Toyota Corolla rule completely, Nissan has some presence with Centra & Hyundai has made inroads with Elantra again due to long warranty’s & improved quality record which was a laughing stock in the late 80s & early 90s. Honda Civic sales figures are around 330, 000 per year & Corolla around 250.000 per year. Corolla would increase the numbers as GEO/Chevy Prism has been discontinued which was exactly the same car produced at the same California plant before. Now that plant is producing Toyota Matrix & Pontiac Vibes that are sort of funky Wagons based on Corolla platform & share the same 1.8 liter engine with Corolla. Ford has a respectable entry with ’’Focus’’ with 175, 000 units per year, most them going to the rental companies like Hertz, Avis etc

Midsize cars list is BIG: Honda Accord, Toyota Camry, Nissan Altima/Maxima, Chevy Impala, New Malibu, Ford Taurus etc, Dodge Intrepid, Stratus etc

Luxury Car divisions : I will keep this for a separate review. This deserves a big separate review. Acura, Lexus, BMW, Benz, Infinity, Cadillac, Saab, Volvo, Audi & many more. Similarly Ultra Luxury & Lutra-Sports cars are a separate subject (Ferrari, Lamborgini etc).

Ford is currently very weak in the car segment but doing just fine with in the SUV segment. Ditto with GM but GM seems to have some plan with Bob Lutz taking over as a ’’car guy’’. Japanese brand like Honda/Toyota & Nissan have almost a ’’lock’’ on the car segment. The problem GM/Ford & DaimlerChrysler find is the low-profit margins on the cars (sometimes almost at a loss: Chevy Cavalier); Japs manage to make profit on their cars just fine. The big 3 are concentrating totally on the SUVs as the profit margins are very high on them almost 10, 000/15, 000!! But this would also o come under stress as Japs are now introducing popular SUVs like Honda Pilot, Toyota Highlander, Nissan Murano, Acura MDX, Lexus RX330, Toyota, Sequoia & 4Runner, Landcruiser.

Pickup truck is one segment where US Automakers have a complete dominance!! Ford F150 has been largest selling vehicle in USA since 1979, 1978 was the year when it outsold the Oldsmobile Cutlass (car) & since then it has held the title Of #1 selling vehicle in the world every year!!!! With around 850, 000 units per year !!!!!!

It has come under serious competition by Chevy Silverado, GMC Sierra & recently launched Toyota Tundra & newly launched Nissan Titan. Dodge RAM is a menacing bad boy entry that is very popular in the truck enthusiast specially with the ’’HEMI’’ engine. There are HUGE sells prospect & HUGE profit margins in this segment & at the same time a very big BRAND-Loyalty !! The Japs would have to fight the brand loyalty in this segment to take on the BIG3. Toyota has recently started a new plant in heartland of Pick-up truck i.e. TEXAS !! It is going to be a very cut-throat competition in this segment in a few years to come. The new F150 has shown promise to keep Ford on the front.

Just for Information:

(1) GM owns SAAB, Daewoo completely, has 20% in Suzuki & Fiat, 10% in Subaru. GM divisions are: Cheverolet, Buick, Cadillac, Pontiac, Saturn (discontinued GEO & Odsmobile)

Some useful sites you can check for the news/automobile industry:

https://edmunds.com ==> Prob’ly the best one.

I think enough for today? Will write more articles soon. Stay tuned!

Regards,

~Milind