Tag Archive | "Edmunds.com"

2015 Auto Sales Set To Break Record

It looks like 2015 will go down as a year of record car sales in the U.S.A.

The year’s sales are expected to shatter the previous annual record of 17.4 million vehicles, made in 2000. Automakers have continued to benefit from an improving economy, lower gas prices and easy auto financing. Holiday promotions have also drawn shoppers to the car lot.

The final tally will be made once automakers finish reporting their December sales figures on Tuesday, according to Forbes.

The strong year is a far cry from where the auto industry was just a few years ago. ”It’s truly remarkable that the auto industry is finishing off its best year ever just six years after the depths of the Great Recession,” says Jessica Caldwell, director of industry analysis at Edmunds.com.

On Tuesday, the big three automakers — Fiat Chrysler, Ford and General Motors — all posted robust, rising December sales figures. Still, results for both Fiat Chrysler and Ford came in shy of high expectations from analysts.

In the last month of the year, Fiat Chrysler said sales rose 13% to 217,527 vehicles, making the month its best December in its 90-year history. Still, the results came in shy of the 229,517 vehicle sales predicted by Edmunds.com.

Robust demand for Jeeps continued to bolster Fiat Chrysler’s results, with sales surging 42 percent during the month. Dodge sales also rose 6% and Ram sales increased 4 percent, while Chrysler sales dropped 21 percent.

Ford sales jumped 8 percent to 239,242 vehicles in December, helping bring home its best annual sales results in nine years. Edmunds.com analysts were looking for 243,590 vehicles to be sold.

Trucks and utilities continued to drive Ford’s results, rising 13%, while car sales fell 4 percent. The automaker said it sold 85,000 of its popular F-Series during the month, which was a 15 percent rise year-over-year.

General Motors sales rose 6 percent to 290,230 vehicles, above the 287,203 vehicles Edmunds.com analysts had projected. Chevrolet , which is GM’s biggest brand, enjoyed particularly strong sales. Chevy crossover sales jumped 30% and truck sales rose 10 percent.

The industry’s sales growth is expected to continue in 2016, for its seventh consecutive year, as shoppers continue to shop for new rides.

“The U.S. economy continues to expand and the most important factors that drive demand for new vehicles are in place,” said Mustafa Mohatarem, GM’s chief economist. “The single most important pieces are the ongoing gains in employment and the growth in personal income. When you add in lower energy prices, it’s easy to see why consumer spending is strong.”

Shares of all three automakers were in the red Tuesday despite the rising sales figures. Fiat Chrysler edged down 0.1%, Ford slid 1.6 percent and GM fell 2.6 percent. The automakers had mixed results in the stock market last year, too, with shares of Fiat Chrysler soaring 20 percent while GM slid 2 percent and Ford lost 8 percent.

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Strong Sales Could Shift Ford, GM to Higher Gear

Shares of U.S. automakers may finally be able to accelerate, reports Reuters.

Investors are closely awaiting next week’s May sales data, expected to come in near record levels. Meeting those forecasts could be enough to lift the sector – among the cheapest in the market – putting the sting of product recalls and tepid recent growth in the rear view mirror.

Estimated sales of 1.6 million new cars and trucks in May would make for a seasonally-adjusted annual rate of 17.4 million vehicles, according to Edmunds.com, a car buying platform.

“This is going to be one of the best months ever,” said David Kudla, chief investment strategist of Mainstay Capital Management in Grand Blanc, Michigan. Kudla sees May sales approaching $40 billion, not far from the $40.3 billion record in August 2014.

Weak auto results contributed to flat overall retail sales in April, but May is expected to represent a rebound. Lower gas prices could boost demand for sports utility vehicles and trucks, which have higher price tags and better margins.

There is also pent-up demand for new vehicles as consumers have been holding on to their cars for longer since the financial crisis. The average age of U.S. cars is now between 10 and 11 years, Kudla said.

The timing of the Memorial Day holiday also helped May sales, according to Jessica Caldwell, senior analyst at Edmunds.com in Santa Monica, California.

“Because there was a full week of May after the holiday weekend, shoppers had plenty of time to take advantage of the deals being widely communicated in dealer and automaker marketing messages,” Caldwell said.

Credit for auto loans is expanding, a positive sign for the sector, noted Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

“The strong dollar created a headwind, and GM had some high-profile product recalls, but given current trends, I would expect sales growth to continue.”

Both GM and Ford appear undervalued at current levels. GM’s forward price-to-earnings ratio is 7.62, well below the S&P 500’s 17.4 ratio, while Ford’s P/E is 8.77, according to Thomson Reuters data.

Both also rank among the cheapest S&P 500 stocks per StarMine’s intrinsic value, which looks at anticipated growth over the next decade. GM is the fourth-cheapest stock in the S&P by this metric, with StarMine estimating that shares should trade at $81.69, more than twice its Thursday closing price of $36.39. StarMine calculates that Ford is the 10th cheapest stock in the S&P, and that it would need to rise 79 percent to meet its intrinsic value.

Despite that, shares of Ford are down 1.7 percent in 2015, underperforming the S&P’s 2.6 percent rise. GM is up 3 percent on the year, thanks largely to a $5 billion stock buyback program announced in March.

While auto stocks could rally if the sales come in as expected, it could spell bad news for the broader market, as any sign of consumer strength could nudge the U.S. Federal Reserve into raising interest rates more quickly that is currently anticipated. Most analysts expect the first rate hike to come later this year, but opinions are split on whether it will occur in September or December.

“Good data would make the Fed raise rates sooner. I believe the stock market would sell off (on strong auto data) because it would shorten that timeline,” said Battle who expects a rate hike in the fall.

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CPO Sales Reach Record High in 2014

SANTA MONICA, Calif. — Sales of certified pre-owned vehicles hit an all-time high of 2.3 million units sold in 2014, making up 20.8% of total used-car sales at franchised dealerships, according to the latest Used Vehicle Market Report from Edmunds.com.

Edmunds said it expects this trend to continue through 2015, with lease vehicles expected to return to dealerships at a faster rate than in previous years.

“This allows dealers to maintain a large CPO inventory,” said Jessica Caldwell, senior analyst at Edmunds.com. “Car shoppers are finding a great selection to choose from, and in the current economy, many are comfortable spending a bit more for that extra peace of mind that a CPO car brings.”

Used cars that are lightly used are appealing to car shoppers because they are more often equipped with modern technology and have already taken the biggest hit in depreciation, added Caldwell. In 2014, 19% of used vehicles sold were one to two years old, up from 14% in 2013.

The average transaction price of a used car also increased from $15,900 in 2013 to $16,800 in 2014. One-year-old vehicles sold at an average of $30,000, increasing 5.7% over 2013. Edmunds attributed the increase to several factors, including low interest rates, longer loan repayment terms and declining gas prices. Customers also sought out larger, more expensive vehicles, bu they were able to pay less monthly for them, Edmunds noted.

The full Used Vehicle Market Report can be found in the Edmunds.com Industry Center.

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Edmunds Buys Dealer Texting Startup

SANTA MONICA, Calif. — Edmunds.com has acquired mobile startup CarCode, a service that lets customers and dealers engage in one-on-one text messaging. It is the first acquisition for the online car shopping website.

The technology will be used in Edmund’s dealership network and will be provided as a complimentary service for shoppers.

“Car shoppers are clamoring for mobile solutions and we saw an opportunity to provide an on-demand mobile experience through the CarCode platform,” said Seth Berkowitz, president of Edmunds. “We think CarCode provides a very relevant service that ties directly to the growing trend in mobile showrooming and shopping.”

CarCode is a SMS texting platform that allows dealers to respond to customers directly from their phones. Dealers are also sent leads from Edmunds via text and participating dealerships will be able to add a “Text Us” link to their websites that allows consumers to initiate contact.

The service also lets dealers manage their conversations with buyers, showing unanswered messages and average response times.

CarCode won Edmund’s annual Hackomotive challenge in February of 2013. The event was held to encourage innovation in solving car shopping pain points. Afterward, Edmunds supported the service through its Fastlane Accelerator program.

“We developed CarCode SMS after realizing customers weren’t able to communicate with dealerships the way a growing number of them actually preferred, via text messaging,” said Nick Gorton, co-founder of CarCode.

As part of the acquisition, Gorton has joined Edmunds as executive director of product management.

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Digital Air Strike Announces First-of-its-Kind Integration with Edmunds.com

Scottsdale, AZ – Digital Air Strike, the nation’s leading automotive social media, online reputation and lead-response company, today announced yet another new partnership with a top review site – Edmunds.com – a leading car-shopping website with the goal of “making car buying easy.”

This new partnership leverages Digital Air Strike’s exclusive survey technology to integrate with Edmunds.com to seamlessly allow dealerships to turn consumer survey feedback into public reviews on Edmunds.com. Digital Air Strike now has survey integration with the top two dealership review sites, Edmunds.com and Cars.com, as ranked by car buyers in the 2013 Automotive Social Media Trends Study.

This integration is available exclusively through Digital Air Strike’s Review Surge 3.0 solution, which automatically generates a survey after a customer buys or services a vehicle at a dealership. The dealership’s Dealer Management System (DMS) triggers a survey with the option of seamlessly leaving customer feedback on Edmunds.com once their feedback successfully passes Edmunds.com moderation process, ensuring reviews that are generated are “verified customer reviews”. This is a turnkey way for dealerships to leverage direct customer feedback to build review volume on Edmunds.com.

For dealerships, this new product not only increases the number and frequency of reviews on Edmunds.com but it also provides a more robust view of their car shoppers’ sales and service experiences. For dealership customers, the integration provides an easy, automated way to share their experience on Edmunds.com. For consumers in general, the additional volume of reviews gives them a more accurate sense of what they can expect if they choose to visit the dealership for sales or service.

“Digital Air Strike is pleased to partner with the top two dealership review sites, Edmunds.com and Cars.com,” said Alexi Venneri, Co-founder and Chief Executive Officer at Digital Air Strike, “And with 47% of car buyers stating review sites are the largest influencer in which dealership they select in their car buying process, this type of innovative technology is incredibly helpful for both consumers and dealerships.”

“The results are impressive! Within only a few months of getting this new integration we generated 21 new sales and service reviews on Edmunds.com alone and our star rating is five stars,” said Ryan Pesin, VP of Marketing at Ardmore Toyota, part of the Central Atlantic Toyota dealership region

“We are already seeing positive results for dealers and car shoppers with our new Digital Air Strike integration,” said Mike Grave, Executive Director of Business Development of Edmunds.com, “As the leading site for car shoppers and as a company that values innovation and transparency, we appreciate the many benefits being created by this application of our API.”

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Edmunds: Car Shoppers Don’t Focus on Rock-Bottom Price

SANTA MONICA, Calif. — About 20% of car shoppers consider themselves “extreme price grinders” who will take as much time as they can to get the lowest possible price on a new or used car, according to a new report released by Edmunds.com.

In fact, according to Edmunds.com officials said, a clear majority of car shoppers (64%) value the importance of saving both money and time in the shopping process.

“These findings dispel the myth that car shoppers will do whatever it takes to pay a rock-bottom price,” said Edmunds.com President Seth Berkowitz. “The feedback we’ve received from shoppers is clear: They’re more than willing to limit their efforts to haggle if they can get a fair deal without the difficulty and stress of long negotiations.”

The balance of time vs. money is just one of the interesting findings of the 2014 Car Shopping Trends Report, which was released this week by Edmunds.com. The report is based on a survey of 500 in-market and recent new- and used-car shoppers from across the United States.

According to the study, 66% of shoppers said that they are likely to request guaranteed upfront pricing on a new car, and 82%of shoppers said they prefer to have a price guarantee on a VIN-specific new car as opposed to a vehicle configuration that may or may not be on the dealer’s lot.

When it comes to mobile, 100% of smartphone owners surveyed say they used their device to perform some sort of car-shopping activity, typically for vehicle and pricing info. During the shopping process, shoppers will, on average, visit two dealers and take two test drives — although only 58% of respondents said they test-drove a vehicle before they made their most recent purchase. Additionally, 83% of car shoppers said that they come away very or somewhat satisfied with their dealership experience.

To view the full study, click here.

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