March auto sales fell 12 percent from a year earlier on an unadjusted basis, thanks to declining consumer confidence, higher fuel prices and recession concerns.GM reported a 13 percent sales decline for the month, Chrysler dropped 13.2 percent, and Ford saw a 7.6 percent decline. Toyota, the #2 automaker in U.S. sales, said sales fell 3.4 percent.
"We're not immune to economic cycles," said Toyota division sales chief Bob Carter.
Toyota, which cut U.S. truck production in March, said it would be forced to lower its forecast for U.S. industry sales of 16 million vehicles in 2008.
"I think the main weakness is consumer confidence," said GM sales chief Mark LaNeve. "It's (mortgages) resetting. It's worry about the news. It's presidential candidates telling you how bad it is. It's Bear Stearns."Conversely, Honda and Nissan outperformed the weak industry and increased their market share. Sales at Honda rose 4.2 percent while Nissan posted a 3.6 percent gain.
"The compact cars and the new crossovers are really what is
carrying most manufacturers," said Jesse Toprak, executive
director of industry analysis for Edmunds.com, highlighted by the fact that sales of pickup trucks and SUVs fell 18 percent in March.
"Consumers want to buy cheaper, more gas efficient vehicles," Toprak said.
[Reuters]
I think it is also the fact that some Honda and Nissan cars are reliable and good.
Toyota's aren't?
Well, at least this won't affect Sirius' numbers so long asit continues to count unsold vehicles on dealers' lots as subscribers.
Toyota isn't perfect ether, just look into the recalls for the Tundra engine problems. My American made Chevy Tahoe will never have that problem.
i think sirius is at an advantage as their OEM ramp up is several years behind XM, so as they add new models as standard/options, even with a drop in auto sales, they will see a nice increase each quarter--When auto sales recover, the numbers should explode for the combined company--i think the key in the next few years will be for a MAJOR renewal effort on their part for expiring auto subs--If they could get the retention rate from 50% to lets say 65--the sub numbers would blow by estimates
I think you need to take the assumptions for the retention rate with a grain of salt. The actual retention for XM is publicly stated to be somewhere around 50%, but, if my experience is indicative, the method by which they get people to stay after the initial trial period is through very low pricing, i.e., $5.99 - 6.99/mo. They will negotiate to no end to get you from turning the service off - eventually. I'm not so sure that it makes sense to retain a subscriber, either from a new car or a previously owned car at any price. The risk you run is cheapening the percieved value of the service.
>>>>>>>>>>They will negotiate to no end to get you from turning the service off - eventually. I'm not so sure that it makes sense to retain a subscriber, either from a new car or a previously owned car at any price. The risk you run is cheapening the percieved value of the service.
When you've paid to have the receiver put in the car, it totally makes sense to be aggressive in trying to get customers not to drop the service. The discounted rate may be less than ideal, but it gives you a chance to (a) recover some of the cost of the install that otherwise is a total loss, and (b) convert the person into a customer, forever.
It would be dumb to not have an aggressive retention program -- almost every subscriber based business employs these techniques and they are pretty much tried-and-true.
When you have a sunk cost (i.e., the receiver) that is potentially going to generate zero revenue, any revenue it can generate beyond the variable costs to service the account falls straight to the bottom line. It is better than nothing.
>>> i think sirius is at an advantage as their OEM ramp up is several years behind XM, so as they add new models as standard/options, even with a drop in auto sales, they will see a nice increase each quarter--When auto sales recover, the numbers should explode for the combined company--i think the key in the next few years will be for a MAJOR renewal effort on their part for expiring auto subs--If they could get the retention rate from 50% to lets say 65--the sub numbers would blow by estimates
Sirius is at a PERCEIVED advantage, but only because (as someone else pointed out) they count cars as subscribers even though they are sitting, unsold, on dealer lots. Thus, increased penetration leads to a much greater overstatement of the subscriber count than they had before. This advantage, however, is perceived, and not real.
As to the conversion rate, it seems most everyone agrees that as penetration rates increase conversion rates will decline. While I'm not sure that has to be that way, managements clearly believe that's how it will be. So, when you ramp up factory installs (into lesser models), you are NOT going to get a 15-point increase in conversion rates, and the fight will be in just trying to keep it at the 50% level. Also, we know XM's is around 53% now, but it is just an assumption that Sirius is at 50%. It could be 45%, it could be 60%, but as a general rule, when SIRI doesn't disclose something it is because they're numbers aren't as good as XM's in that particular area.