The 2017 U.S. new vehicle industry continues to change, driven by external influences like fuel prices, economic variables and the evolving regulatory environment, as well as internal advancements in areas including vehicle and consumer connectivity, product innovation and targeted marketing.
U.S. dealers sold 17.6MM new cars and light trucks in 2016, a slight increase from 2015 and the seventh consecutive year-over-year gain. This seven-year stretch of improvements from 2010 through 2016 is the longest string of gains in the industry’s history, dating back to the beginning of the twentieth century. However, IHS Markit forecasts that 2017 deliveries will be down slightly and the next several years will be in the 17.4– 17.6MM range.
The mix of light truck and car sales will remain in the 60 percent/40 percent range in the near term as brands continue focusing on CUVs and pickups. Luxury makes will gain share in the near term, as new premium makes attempt to gain a foothold and existing players rejuvenate their product lineups to gain share. Currently, luxury products account for about 12 percent of all new sales, but this is expected to reach about 14 percent by 2020.
Brand loyalty rates grew to 52.8 percent in 2016. Given the plateauing sales effect across the industry, the path for a brand to gain share is through appeal to first-time buyers or, more likely, conquest of owners of competitive products. This increases pressure on all players to retain existing owners, as IHS Markit analysis reveals an upward trend in customer cash incentives to loyal owners, outpacing those offered to conquest buyers. IHS Markit data points out several other loyalty drivers where successful brands will need to focus, including an increased emphasis on leasing, support from their captive financing and a superior ownership experience. In addition, several brands are adjusting dealer recognition incentive programs to incorporate dealer loyalty.
The non-luxury and luxury categories are continuously led by three brands substantially out-performing their rivals, based on IHS Markit new vehicle registrations. In the non-luxury space, Ford, Toyota and Chevrolet each account for more than 10 percent of the industry. While in the luxury market, Mercedes- Benz, BMW and Lexus are the clear leaders. These annual results have held for several years and are unlikely to change in the near future.
Julie Mynster is Global Director of Audience Solutions for IHS Markit. In this role, she leads the team responsible for developing and delivering consumer engagement solutions, including audience development, measurement and optimization for IHS Markit.
Julie has more than 15 years of experience in the automotive marketing and digital space, having held digital marketing leader roles at both General Motors and Fiat Chrysler Automobiles. As an innovation leader in her OEM roles, she specifically focused on leveraging technology to drive revenue generating consumer engagement, including website design, online media and strategy, CRM and social media.
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