Covering Second Quarter 2015 Volume 20, Number 3 Sponsored by: Maryland Automobile Dealers Association TM FORECAST State Market Predicted to Increase 3.9% from 2014 to 2015 Positive factors slightly out-weigh negatives; slow growth expected in 2016 Key factors providing a boost to new vehicle sales Incentive to upgrade. In almost every way, today s new car and trucks are far superior to vehicles that came out just five years ago. But it s the introduction of advanced safety features (i.e, mitigation braking, lane alert, smart cruise control, blind spot monitoring, rear-view cameras, etc.) on mainstream, non-luxury brand vehicles that will give a boost to sales for many years to come. These safety-related technologies will provide a strong motivation for consumers to trade in their current vehicles for new ones. Pent up demand. The average age of vehicles on the road is still at extremely high levels. Following five years of well below average sales, the new vehicle market has only recently moved above trend line levels. We think that based on cyclical factors alone, the market recovery still has legs. Labor market is improving. Total employment has moved steadily higher for the past five years, while the unemployment rate has declined. There are also some recent signs that wages and incomes are finally starting to move higher. Some economists remain concerned about sluggish growth in the labor force and lingering under-employment, but the outlook for jobs and incomes has improved. Key factors holding back new vehicle sales Rising interest rates. After several years of hovering near zero, it appears as though interest rates are on the rise. It s not likely to be an abrupt, upward march, but it s inevitable that they will drift higher. Higher interest rates lead to increasing monthly finance and lease payments, which puts a drag on new vehicle sales. Insufficient household savings. Leading into the financial crisis of 2008, households had amassed record debt. After several years of deleveraging, the debt burden has eased significantly. However, the majority of U.S. households have insufficient savings for retirement, and it will take considerable time to build these nest eggs. As a result, households will need to devote a chunk of disposable income toward savings instead of retail spending (which includes automobiles). Consumer sentiment. Most measures of consumer sentiment have improved recently, but there is still a pervading sense of uneasiness among many U.S. households. Median household incomes have been stagnant for decades, while many still feel that high quality, good paying jobs are difficult to find. This nagging sense that things are not as good as they should be, will likely prevent many potential purchasers from buying a new vehicle. New light vehicle registrations 300,000 250,000 200,000 150,000 100,000 50,000 Annual Trend in State Market 214,253 208,116 197,576 183,634 259,832 251,098 239,296 270,000 0 2008 2009 2010 2011 2012 2013 2014 2015 Forecast Historical Data The graph above shows annual new retail light vehicle registrations in the state from 2008 thru 2014 and Auto Outlook s projection for 2015. Market Summary YTD '14 YTD '15 % Chg. Mkt. Share thru June thru June* '14 to '15 YTD '15* TOTAL 125,562 132,321 5.4% Car 65,670 64,568-1.7% 48.8% Light Truck 59,892 67,753 13.1% 51.2% Domestic 40,133 43,267 7.8% 32.7% European 12,694 13,178 3.8% 10.0% Japanese 61,214 63,817 4.3% 48.2% Korean 11,521 12,059 4.7% 9.1% Domestic brands consists of vehicles sold by GM, Ford, FCA (excluding FIAT), and Tesla. *Figures for June, 2015 were estimated by Auto Outlook.
Page 2 MARKET TRACKER: QUARTERLY RESULTS State Market Increases in Second Quarter of 2015 % change versus year earlier 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% State U.S. QUARTERLY TREND Percent Change in State and U.S. New Vehicle Market 0.0% Q3 '14 Q4 '14 Q1 '15 Q2 '15* State 4.3% 4.1% 5.0% 5.7% U.S. 6.1% 6.6% 2.5% 3.9% * Figures for the Second Quarter of 2015 were estimated by Auto Outlook based on data for April and May. New retail light vehicle registrations 80000 70000 60000 50000 40000 30000 20000 10000 0 QUARTERLY PERSPECTIVE Five Years of Second Quarter Results in State Market The market was up by more than 18,500 units in the Second Quarter of 2015 vs. 2011. Q2 '11 Q2 '12 Q2 '13 Q2 '14 Q2 '15* Regs. 54650 61943 66613 69218 73167 Second Quarter registrations during past five years * Figures for 2Q 2015 were estimated by Auto Outlook based on data for April and May. MARKET TRACKER: STATE MARKET VERSUS U.S. State Market Has Larger Gain Percent change in registrations YTD '15 thru June* vs. YTD '14 Passenger car market share YTD '15 thru June* Domestic brand market share YTD '15 thru June* Top 10 brands and market share YTD '15 thru June* Maryland Market U.S. Market 5.4% 3.2% 48.8% 45.1% 32.7% 41.0% First Toyota 15.9% Toyota 13.2% Second Honda 11.8% Ford 12.5% Third Ford 10.9% Chevrolet 10.5% Fourth Chevrolet 7.9% Honda 9.4% Fifth Nissan 7.8% Nissan 7.7% Sixth Hyundai 6.0% Jeep 5.0% Seventh Jeep 4.8% Hyundai 4.2% Eighth Subaru 4.6% Subaru 4.0% Ninth Kia 3.1% Kia 3.8% Tenth Mazda 2.9% GMC 3.2% *June 2015 figures estimated by Auto Outlook Source: IHS Automotive Maryland Auto Outlook Covering Second Quarter 2015 Published for: Maryland Automobile Dealers Association 7 State Circle, Suite 301 Annapolis, MD 21401-1904 www.mdauto.org Published by: Auto Outlook, Inc. PO Box 390 Exton, PA 19341 Phone: 800-206-0102 EMail: jfoltz@autooutlook.com Editor: Jeffrey A. Foltz Reproduction, including photocopying of this publication in whole or in part, is prohibited without the express permission of Auto Outlook, Inc. Any material quoted must be attributed to, published by Auto Outlook, Inc. on behalf of the Maryland Automobile Dealers Association, and must also include the statement: Data Source: IHS Automotive. Unforeseen events may affect the forecast projections. Consequently, Auto Outlook is not responsible for management decisions based on the content of. Copyright Auto Outlook, Inc., July 2015
Covering Second Quarter 2015 Page 3 MARKET TRACKER: PRIMARY SEGMENTS Non-Luxury Trucks Gain Non-Luxury Truck Luxury Truck Luxury Car Non-Luxury Car Change in State Market Share YTD 2015 thru June* vs. YTD 2014 Car market share has declined so far this year. -3.2-0.3 0.5 3.0-5.0-3.0-1.0 1.0 3.0 5.0 Change in market share The graph above shows the change in year-to-date market share for four primary brand segments. *Figures for June, 2015 were estimated by Auto Outlook. Data MARKET TRACKER: HYBRID AND ELECTRIC VEHICLES State Hybrid/Electric Share is 2.8% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Q3 '12 Q4 '12 Quarterly Alternative Powertrain Market Share (includes hybrid and electric vehicles) Q1 '13 Q2 '13 Q3 '13 Trendline Alternative powertrain market share has trended lower over the past three years, and fell to 2.8% in the Second Quarter of 2015. Q4 '13 Q1 '14 Q2 '14 Q3 14 Q4 14 Q1 15 Q2 15* The graph above shows hybrid powertrain and electric vehicle quarterly market share in the state. The line shows market share trend over the past 12 quarters. *Second Quarter 2015 includes April and May. MARKET TRACKER - SEGMENTS Compact SUV Segment Continues to Post Big Gains Change in Segment Market Share YTD 2015 thru May vs. YTD 2014 Maryland and U.S. Markets Compact SUV Pickup Mid Size SUV Luxury SUV Compact SUV market share was up sharply in both the state and U.S. markets so far this year. Mid Size and Large Cars had the largest decline. Typical models in segments: Small Car: Hyundai Elantra Mid Size & Large Car: Toyota Camry Luxury & Sports Car: BMW 3-Series Pickup: Ford F-Series Van: Honda Odyssey Compact SUV: Jeep Cherokee Mid Size SUV: Kia Sorento Full Size SUV: Chevrolet Tahoe Luxury SUV: Lexus RX Full Size SUV Van Luxury and Sports Car Small Car Mid Size and Large Car MD U.S. -2.5-2.0-1.5-1.0-0.5 0.0 0.5 1.0 1.5 2.0 Change in market share
Page 4 BRAND SCOREBOARD - PART ONE Subaru Grabs Larger Share of State Car Market Chevrolet has biggest gain among light truck brands The two graphs below show the change in market share for the top 15 selling car and light truck brands during the first five months of 2015 versus the same period a year earlier. Change in Maryland Car Market Share - YTD 2015 thru May versus YTD 2014 (top 15 selling brands) 1.5 1.2 Change in market share 1.0 0.5 0.0-0.5 1.0 0.5 0.2 0.1 0.1 0.0 0.0 0.0 0.0 Subaru s share of the state car market increased by 1.2 share points so far this year. Chrysler and Hyundai also had relatively big gains. -0.1-0.4-0.5-1.0-0.8-1.5 Subaru Chrysler Hyundai Kia Mercedes BMW Nissan VW Mazda Lexus Ford Chevrolet Dodge Toyota Honda -1.2 Change in Maryland Light Truck Market Share - YTD 2015 thru May versus YTD 2014 (top 15 selling brands) 0.8 0.7 0.6 0.5 Change in market share 0.4 0.2 0.0-0.2 0.4 0.3 0.2 0.2 Chevrolet s light truck market share was up 0.7 points during the first five months of 2015. 0.0 0.0 0.0-0.2-0.2-0.2-0.4-0.3-0.6-0.5-0.6-0.8 Chevrolet Kia Jeep Ford GMC Lexus Toyota Honda Mazda Nissan Ram Acura Subaru Dodge Hyundai
Covering Second Quarter 2015 Page 5 BRAND SCOREBOARD - PART TWO Toyota and Honda Are Strong Performers in Maryland Hyundai, Mazda, Subaru, and Acura also rank high The graph below provides an indicator of brands that are popular in Maryland (relative to the National standard), and those that are not. Here s how it works: For the top 30 selling brands in the state, each brand s share of the U.S. market is multiplied by retail registrations in the state during the first half of this year. This yields a target for the state market. Target registrations are subtracted from actual registrations to derive the measurement of sales performance. Brands at the top of the graph (i.e., Toyota, Honda, Hyundai, Mazda, Subaru, and Acura) are relatively strong sellers in the state, with actual registrations exceeding calculated targets by large margins. For instance, Toyota registrations exceeded the target by 2,814 units. Toyota Honda Hyundai Mazda Subaru Volkswagen Nissan Volvo Mercedes Land Rover Lexus Infiniti Porsche Mitsubishi Chrysler Dodge Lincoln Cadillac Buick Chevrolet Maryland Retail Market Performance based on registrations for YTD 2015 thru June* Actual registrations minus target (state industry registrations times U.S. market share) Acura MINI Jeep Tesla BMW Audi Kia Ram GMC Ford -2720 Toyota, Honda, Hyundai, Mazda, Subaru, and Acura are strong sellers in the state, with actual registrations exceeding targets by large margins. -1637-1769 -1127-629 -360-490 -352-108 -111-113 -121-183 -28-86 -93-1 -4,000-3,000-2,000-1,000 0 1,000 2,000 3,000 4,000 Actual registrations minus target (state industry registrations times U.S. market share) 15 9 131 80 66 148 364 584 580 922 1973 2481 2814 *Figures for June, 2015 were estimated. Source for registration data: IHS Automotive.
Page 6 MODEL RANKINGS Accord Holds Top Spot in Standard Mid Size Car Segment Jeep Grand Cherokee leads among Mid Size SUVs (2 rows) The table below shows the top five selling models during the first five months of 2015 in 16 primary market segments. In addition to unit registrations, it also shows each model s market share in its respective segment. Toyota Corolla was the best-selling Sub Compact Car, with a 17.1% share. Honda Civic was second, followed by Hyundai Elantra. Mustang was at the top of the Sporty Compact Segment, while BMW 5-Series was the best-seller among Luxury Cars and Sports Cars. Ford F-Series was the leader for Full-Size Pickups, while Honda CR-V (Compact SUV), Jeep Grand Cherokee (Mid Size SUV, 2 rows), and Toyota Highlander (Mid Size SUV, 3 rows) were also top-ranked in their segments. Lexus RX was the leader for Luxury SUVs. Top Selling Models in Each Segment - Maryland New Retail Registrations - YTD 2015 thru May Cars Entry Sub Compact Sporty Compact Standard Mid Size Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Honda Fit 854 20.9 Toyota Corolla 3241 17.1 Ford Mustang 827 45.6 Honda Accord 3209 18.1 Kia Soul 800 19.6 Honda Civic 2432 12.8 Dodge Challenger 388 21.4 Toyota Camry 3163 17.9 Nissan Versa 768 18.8 Hyundai Elantra 2375 12.5 Chevrolet Camaro 364 20.1 Hyundai Sonata 2041 11.5 Ford Fiesta 489 12.0 Ford Focus 1392 7.4 Hyundai Veloster 174 9.6 Nissan Altima 1893 10.7 Chevrolet Sonic 344 8.4 Chevrolet Cruze 1272 6.7 Subaru BRZ 46 2.5 Ford Fusion 1459 8.2 Large Mid Size Entry Luxury Near Luxury Luxury and Sports Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Toyota Avalon 565 23.9 Mercedes CLA-Class 325 35.1 Lexus ES 538 14.1 BMW 5-Series 308 11.6 Dodge Charger 409 17.3 Acura ILX 189 20.4 Mercedes C-Class 502 13.2 Mercedes E-Class 304 11.5 Chevrolet Impala 392 16.6 Audi A3 181 19.5 Acura TLX/TL 466 12.2 Chevrolet Corvette 249 9.4 Nissan Maxima 282 11.9 BMW 2-Series 85 9.2 BMW 3-Series 443 11.6 Audi A6 177 6.7 Chrysler 300 234 9.9 Lexus Ct200H 70 7.6 BMW 4-Series 325 8.5 Tesla Model S 156 5.9 Light Trucks Compact Pickup Full Size Pickup Van Compact SUV Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Toyota Tacoma 1107 55.4 Ford F Series 2965 37.3 Honda Odyssey 1190 23.5 Honda CR-V 3260 16.0 Chevrolet Colorado 380 19.0 Chevrolet Silverado 1974 24.8 Toyota Sienna 1182 23.3 Toyota RAV4 2889 14.2 Nissan Frontier /Xe 378 18.9 Ram 1619 20.4 Ford Transit Connect Van 652 12.9 Nissan Rogue 1905 9.3 GMC Canyon 117 5.9 Toyota Tundra 703 8.8 Dodge Caravan 577 11.4 Jeep Wrangler 1651 8.1 GMC Sierra 643 8.1 Nissan NV 291 5.7 Ford Escape 1591 7.8 Mid Size SUV (2 rows) Mid Size SUV (3 rows) Full Size SUV Luxury SUV Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Jeep Grand Cherokee 1207 35.7 Toyota Highlander 1642 19.6 Chevrolet Tahoe 282 24.1 Lexus RX 762 11.0 Hyundai Santa Fe Spo 620 18.3 Honda Pilot 1585 18.9 Chevrolet Suburban 189 16.2 Acura MDX 635 9.2 Toyota 4 Runner 571 16.9 Ford Explorer 1288 15.3 Ford Expedition 147 12.6 Acura RDX 575 8.3 Ford Edge 470 13.9 Kia Sorento 780 9.3 GMC Yukon 136 11.6 Lexus NX 350 5.1 Nissan Murano 452 13.4 Nissan Pathfinder 631 7.5 GMC Yukon XL 125 10.7 BMW X5 340 4.9
Covering Second Quarter 2015 Page 7 COUNTY SCOREBOARD Five County Markets Are Up by More than 10% Montgomery County market increased 6.1% during the first five months of 2015 The table below and graph to the right provide a thorough summary of each of Maryland s 24 county new retail light vehicle markets. This county-level information provides a valuable perspective on local market performance. The table below shows new retail light vehicle registrations during the first five months of 2014 and 2015, as well as light truck market share in each county. The graph shows Domestic Brand market share. Note: top five shaded counties in each category of the table below are shaded yellow. Garrett Cecil Saint Marys Calvert Kent Caroline Somerset Allegany Charles Worcester Dorchester Harford Queen Annes Carroll Washington Talbot Frederick Wicomico Anne Arundel Prince Georges Baltimore Baltimore Ind Howard Montgomery Domestic Brand Market Share (%): YTD 2015 thru May 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% COUNTY MARKET REVIEW Year to date thru May Percent Change Unit Change Light Truck Market Share (%) YTD 2014 YTD 2015 2014 to 2015 2014 to 2015 YTD 2014 YTD 2015 Change Allegany 919 982 6.9% 63 58.4 61.4 3.0 Anne Arundel 10,993 11,569 5.2% 576 50.6 54.4 3.8 Baltimore 15,412 16,175 5.0% 763 47.8 52.3 4.5 Baltimore Ind 5,805 5,795-0.2% -10 37.5 41.2 3.7 Calvert 1,862 2,017 8.3% 155 51.1 56.7 5.5 Caroline 501 558 11.4% 57 47.9 51.4 3.5 Carroll 3,305 3,486 5.5% 181 52.9 61.0 8.0 Cecil 1,790 1,970 10.1% 180 55.8 58.6 2.8 Charles 2,942 3,138 6.7% 196 47.9 47.6-0.2 Dorchester 522 509-2.5% -13 49.2 52.7 3.4 Frederick 4,930 4,950 0.4% 20 51.6 54.6 3.1 Garrett 599 624 4.2% 25 72.1 76.8 4.6 Harford 5,376 5,383 0.1% 7 52.2 57.1 5.0 Howard 6,447 6,865 6.5% 418 47.6 53.0 5.4 Kent 298 320 7.4% 22 55.7 59.7 4.0 Montgomery 19,216 20,381 6.1% 1,165 46.3 49.3 3.1 Prince Georges 12,107 13,743 13.5% 1,636 41.3 43.3 2.0 Queen Annes 998 981-1.7% -17 51.8 59.0 7.2 Saint Marys 2,180 2,217 1.7% 37 54.7 58.8 4.0 Somerset 211 237 12.3% 26 49.8 57.4 7.6 Talbot 769 699-9.1% -70 55.1 56.4 1.2 Washington 2,457 2,476 0.8% 19 49.9 51.1 1.2 Wicomico 1,356 1,550 14.3% 194 49.6 49.2-0.4 Worcester 973 923-5.1% -50 55.9 55.1-0.8
Page 8 Brand Registrations Report Maryland New Retail Car and Light Truck Registrations Second Quarter* Year-to-date thru June Registrations Market Share (%) Registrations Market Share (%) 2Q 2014 2Q 2015 % change 2Q 2014 2Q 2015 Change YTD '14 YTD '15 % change YTD '14 YTD '15 Change TOTAL 69,218 73,167 5.7 125,562 132,321 5.4 Cars 36,949 35,934-2.7 53.4 49.1-4.3 65,670 64,568-1.7 52.3 48.8-3.5 Light Trucks 32,269 37,233 15.4 46.6 50.9 4.3 59,892 67,753 13.1 47.7 51.2 3.5 Domestic Brands 22,083 23,797 7.8 31.9 32.5 0.6 40,133 43,267 7.8 32.0 32.7 0.7 European Brands 7,067 7,372 4.3 10.2 10.1-0.1 12,694 13,178 3.8 10.1 10.0-0.1 Japanese Brands 33,556 35,180 4.8 48.5 48.1-0.4 61,214 63,817 4.3 48.8 48.2-0.6 Korean Brands 6,512 6,818 4.7 9.4 9.3-0.1 11,521 12,059 4.7 9.2 9.1-0.1 Acura 1,094 1,328 21.4 1.6 1.8 0.2 2,147 2,366 10.2 1.7 1.8 0.1 Audi 834 922 10.6 1.2 1.3 0.1 1,373 1,572 14.5 1.1 1.2 0.1 BMW 1,466 1,372-6.4 2.1 1.9-0.2 2,683 2,739 2.1 2.1 2.1 0.0 Buick 581 515-11.4 0.8 0.7-0.1 1,067 1,037-2.8 0.8 0.8 0.0 Cadillac 430 433 0.7 0.6 0.6 0.0 859 789-8.1 0.7 0.6-0.1 Chevrolet 5,455 5,768 5.7 7.9 7.9 0.0 9,845 10,445 6.1 7.8 7.9 0.1 Chrysler 643 975 51.6 0.9 1.3 0.4 1,260 1,844 46.3 1.0 1.4 0.4 Dodge 2,116 1,787-15.5 3.1 2.4-0.7 3,770 3,317-12.0 3.0 2.5-0.5 FIAT 177 110-37.9 0.3 0.2-0.1 312 194-37.8 0.2 0.1-0.1 Ford 7,494 7,946 6.0 10.8 10.9 0.1 13,484 14,432 7.0 10.7 10.9 0.2 GMC 1,052 1,230 16.9 1.5 1.7 0.2 1,939 2,267 16.9 1.5 1.7 0.2 Honda 8,897 8,917 0.2 12.9 12.2-0.7 15,661 15,674 0.1 12.5 11.8-0.7 Hyundai 4,446 4,465 0.4 6.4 6.1-0.3 7,879 7,920 0.5 6.3 6.0-0.3 Infiniti 477 537 12.6 0.7 0.7 0.0 936 992 6.0 0.7 0.7 0.0 Jaguar 66 51-22.7 0.1 0.1 0.0 119 96-19.3 0.1 0.1 0.0 Jeep 2,912 3,683 26.5 4.2 5.0 0.8 5,354 6,400 19.5 4.3 4.8 0.5 Kia 2,066 2,320 12.3 3.0 3.2 0.2 3,642 4,106 12.7 2.9 3.1 0.2 Land Rover 322 336 4.3 0.5 0.5 0.0 646 655 1.4 0.5 0.5 0.0 Lexus 1,399 1,560 11.5 2.0 2.1 0.1 2,686 2,982 11.0 2.1 2.3 0.2 Lincoln 200 208 4.0 0.3 0.3 0.0 351 386 10.0 0.3 0.3 0.0 Mazda 2,005 2,093 4.4 2.9 2.9 0.0 3,671 3,788 3.2 2.9 2.9 0.0 Mercedes 1,495 1,715 14.7 2.2 2.3 0.1 2,734 3,024 10.6 2.2 2.3 0.1 MINI 371 360-3.0 0.5 0.5 0.0 583 596 2.2 0.5 0.5 0.0 Mitsubishi 333 356 6.9 0.5 0.5 0.0 656 662 0.9 0.5 0.5 0.0 Nissan 5,213 5,513 5.8 7.5 7.5 0.0 9,751 10,305 5.7 7.8 7.8 0.0 Other 126 85-32.5 0.2 0.1-0.1 209 155-25.8 0.2 0.1-0.1 Porsche 164 199 21.3 0.2 0.3 0.1 291 348 19.6 0.2 0.3 0.1 Ram 1,120 1,215 8.5 1.6 1.7 0.1 2,081 2,211 6.2 1.7 1.7 0.0 Subaru 2,826 3,142 11.2 4.1 4.3 0.2 5,257 6,022 14.6 4.2 4.6 0.4 Tesla 57 83 45.6 0.1 0.1 0.0 90 175 94.4 0.1 0.1 0.0 Toyota 11,305 11,706 3.5 16.3 16.0-0.3 20,437 20,991 2.7 16.3 15.9-0.4 Volkswagen 1,753 1,906 8.7 2.5 2.6 0.1 3,202 3,230 0.9 2.6 2.4-0.2 Volvo 323 331 2.5 0.5 0.5 0.0 587 601 2.4 0.5 0.5 0.0 *June 2015 figures were estimated by Auto Outlook. Source: IHS Automotive The table above shows new retail light vehicle (car and light truck) registrations in Maryland. Figures are shown for the Second Quarters of 2014 and 2015, and ytd totals for 2014 and 2015. The top ten ranked brands in each category are shaded yellow.