WCA November 2013

Only 47 per cent of the younger cohort consider their dealer to be trustworthy, compared with 64 per cent of car shoppers aged 35 and up. Ms Helms said that reaching young people is important because millennials will account for 40 per cent of car purchases in the US by 2020. Traditionally for high-end cars and trucks, leasing is extended to the less affluent shopper – and the rewards come fast Somewhat at variance with the worrying tone of the previous item, the US auto industry has steadily increased production throughout the year to meet rising demand; and it reported another month of double-digit increases in August. Sales of 1.5 million vehicles – a 17 per cent gain over the same month of 2012 – put seasonally adjusted annual industry sales at a post-recession high of 16.09 million, up from 14.49 million a year before. As a possible explanation for the surprisingly strong sales results, analysts and auto dealers noted a recent trend in the producers’ use of leasing, traditionally a way of making high-end cars and trucks more accessible to interested shoppers daunted by a high sticker price. Now, with consumer confidence increasing and credit more readily available, increasingly the strategy is being extended to moderate-priced vehicles – to good effect. According to edmunds.com , a resource for car buyers and enthusiasts, leasing figured in 16 to 20 per cent of new-car transactions in the US in the years leading up to the recession, with activity concentrated at the high end. In 2013, through August, leasing was a factor in 26 per cent of new-car purchases. Detroit’s Big Three (General Motors, Ford and Chrysler) reported August sales increases of 14.7 per cent, 12 per cent and 11.5 per cent, respectively. The average monthly lease payment was $408, down from $416 in 2012, according to Experian Automotive , which analyses industry data. In brief . . . ❖ Auto maker Toyota Motor Corp plans to invest more than $28 million to expand its powertrain operations at two facilities in the Ann Arbor area of Michigan. According to the Detroit Free Press , the expansion announced on 5 th September by the Toyota Technical Center (Ann Arbor) is expected to focus on design, evaluation, and calibration for new engine and transmission projects at the Japanese company’s North American plants.

At the beginning of 2012, the US coal industry had plans to expand port capacity by an additional 185 million tons. But those hopes have faded. American coal exports this year are expected to decline by roughly five per cent from record exports of 125 million tons in 2012, and many industry observers look for the decline to quicken in 2014. ❖ Energy experts project that China, with its increasingly conservationist energy policies, may no longer be a net importer of coal by 2015. Accordingly, 2013 is a ‘watershed year for global coal markets,’ according to a Goldman Sachs report cited by Mr Krauss. “The window for thermal coal investment is closing.” American coal companies get the message. Anthony Yuen, a Citigroup energy analyst, told the Times : “Global coal prices right now are not supportive of large-scale US coal exports.” Among younger car shoppers, ‘Buy American’ is not the imperative it once was According to the results of a survey conducted by AutoTrader.com and presented 23 rd August at an Automotive Press Association event in Detroit, only 38 per cent of millennials (born between 1982 and 2002) say it is important to them to buy a car assembled in the United States. The advisory site for shoppers compared that with 53 per cent of Generation X (born 1962-1982) and 60 per cent of baby boomers (the first generation after World War II). As reported by Detroit Free Press business writer Nathan Bomey, AutoTrader also said that some 48 per cent of millennials consider it important that their vehicle reflect their personality. The personality factor mattered to 38 per cent of generation X and 34 per cent of baby boomers. Young millennials said the brands that most fit their personalities are, beginning with the favourite: Audi, Honda, Mercedes, BMW and Toyota. Older millennials picked Audi, Mercedes, Chevrolet, Honda and Toyota. As to what this means for US car makers, Isabelle Helms, senior director of research and marketing analytics at AutoTrader, drew the obvious conclusion. “It is important,” she told Mr Bomey, “for domestics not to hang their hats on ‘Made in the USA’ to the same extent they did in the past.” ❖ Another problematic finding for American automakers is that many young car shoppers do not like the current process for buying a vehicle. AutoTrader said that about 56 per cent of millennials would prefer to avoid interacting with a salesperson, an aversion acknowledged by 49 per cent of Generation X and 37 per cent of baby boomers. Automotive

Dorothy Fabian Features Editor

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Wire & Cable ASIA – November/December 2013

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