Drive by Numbers
Edmunds.com's Senior Analyst discusses the numbers that have caught her attention this week
At Edmunds.com, we see a ton of data. Resisting the allure of California sunshine, my group sits dutifully at our desks shuffling through hundreds of megabytes of information daily - some from actual transactions records, some from our website traffic, and some from other great sources on the web. We're constantly asked if there's anything interesting we're looking at, and it's always an easy question to answer as we see interesting things daily sometimes hourly. So, while I can't possibly discuss everything I've found interesting, I can share a few numbers that have caught my eye this week.
By now, everyone including my mother has seen the headlines about what a great month February was for the auto industry. The highest monthly sales rate we've seen in four years and a one million unit increase in the SAAR from January. Sure, it's easy to have one good month, but the key for automotive industry recovery is keeping this momentum. Pre-2008, we had nine consecutive years of sales over 16 million units, and this is the most encouraging sign that we could return to those levels....one day. So, what type of sales numbers does March have to post to retain the impressive 15.1 SAAR? Well, they have to be huge. Like 1,487,000 vehicles huge.
To put it in perspective, the last time we saw numbers even close to this was in 2007, a time when Barack Obama was a relatively new name for most of us and domestic automakers still had private jets. Even back in 2007 — which was the last time we saw a year close with 16M new vehicles sold — a 1,487,000 performance would have been the third best month of the year.
Still can't imagine it? This is what the sales trend would look like:
Achieving a 15.1 SAAR would mean a 20% sales increase from last March. In February, we saw a 16% year-over-increase. Ambitious, yes, but technically in range....right?
Downshifting from a big number to a very small one, 3.2% is the advanced drive market share for February. This includes all hybrids, electric vehicles, and everything in-between. It's one of only five months in which the share has been over 3%, ever. And three of those months were during the summer of 2009 when the Cash for Clunkers program took place. So what gives? Is the gas price spike pushing everyone into hybrids and electrics? As much as some automakers would like to report that, it's largely inaccurate. The Toyota Prius alone makes up 56% of all advance drive market share leaving everyone else to divide up a paltry 1.4% of the market. On the other hand, did you see those Ford Focus sales in February? Fuel efficient, small internal combustion engine sales are unseasonably strong.
Measuring loyalty and conquest is a somewhat confusing matter. One can argue that loyal customers are good; while the other side can argue bringing new blood into the brand is better. But, what about looking at the population of your brands' trade-ins? Are you keeping those customers? Yes is the only right way to answer that question. Since there are millions of cars on the road ripe to be traded-in, this is something I've been watching very closely. I've been particularly interested in the effect on Japanese owners following the tragic earthquake and tsunami in Japan last March. Once the Japanese automakers' inventory was in short supply, the talk of the industry was the opportunity for domestic and South Korean brands to sell cars to displaced Japanese customers. And for a few months, the opportunity was seized as Japanese automakers were only recapturing 68.8% of their trade-ins. Since hitting that low last May, they have been slowly rebuilding, upping that number to 73.9% in February. Sure, 5% may not sound like a huge improvement, but when you think about all the old Civics, Camrys, Altimas, and Integras on the road, there is a lot at stake. Take a look at the trend for yourself:
The last number I'm looking at this week is personally the most daunting one on my list as it's the number of miles I will be traveling to go from my home in Los Angeles to Wolfsburg, Germany this Saturday. I will be attending Volkswagen's Annual Press Conference where we will be discussing 2011 Full Year Financial Results. The 20 hours of transit time aside, I'm looking forward to the trip because you know what that means? Yep, you guessed it - more numbers to look at!
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Jessica Caldwell is the Senior Director of Pricing & Industry Analysis for Edmunds.com. Follow @jessrcaldwell on Twitter.