Model 3 reveal effect on other luxury car sales

[jbcarioca]

And in 2016 the 2017 3-Series launched. Sometimes, in the U.S., there might be a slight lag in sales the year a new version debuts. The 3-Series dropped by 25.5% over 2015. Not a 'slight' amount at all, but a devastating one, because it allowed the Mercedes-Benz C-Class to take the #1 spot in the U.S. despite selling 10.4% fewer vehicles than the year before, when the 3-Series outsold the A4 by 62,709 units instead of only 33,471 in 2016.

It doesn't matter how many variables there are. Every vehicle on the market competes against every other on the market. On that same level playing field, some cars that are direct competitors to each other are more successful on a consistent basis at actually selling cars. In the arena of vehicles that has long been defined by the BMW 3-Series, it no longer leads in sales. Nothing achieved by any of its direct competitors suggests that they made a move up to take sales away from 3-Series. the only significant factor is the upcoming competitor, the Tesla Model ☰ -- which got hundreds of thousands of interested potential customers within a couple of weeks during 2016.

Oh, then there is this...

Yes, yes! It's easy to know who the competitions. They're the ones being attacked. I note BMW does not attack Cadillac, or Acura or Toyota. Why bother. It's Tesla they're worried about.
I cannot see why they're worried. oh, I guess my local BMW dealer in Florida might've noticed when I laughed at his I# that I'd been debating about and drove away in my S. I wonder if Tesla will tell us the trade in data on the S, the X and the 3? I'd love to know for sure.

 

[R.S]

And in 2016 the 2017 3-Series launched. Sometimes, in the U.S., there might be a slight lag in sales the year a new version debuts. The 3-Series dropped by 25.5% over 2015. Not a 'slight' amount at all, but a devastating one, because it allowed the Mercedes-Benz C-Class to take the #1 spot in the U.S. despite selling 10.4% fewer vehicles than the year before, when the 3-Series outsold the A4 by 62,709 units instead of only 33,471 in 2016.

It doesn't matter how many variables there are. Every vehicle on the market competes against every other on the market. On that same level playing field, some cars that are direct competitors to each other are more successful on a consistent basis at actually selling cars. In the arena of vehicles that has long been defined by the BMW 3-Series, it no longer leads in sales. Nothing achieved by any of its direct competitors suggests that they made a move up to take sales away from 3-Series. the only significant factor is the upcoming competitor, the Tesla Model ☰ -- which got hundreds of thousands of interested potential customers within a couple of weeks during 2016.

Oh, then there is this...

The BMW 3 series is around in it's current form since 2011, it's an aging car.

The C-Class and A4 are pretty new and by your definition sales should continue to fall, but they don't, despite a cooling US market and a slow but steady move to SUVs, the A4 and the C-Class are up 20% and 16% January-May 2017 and yes the 3 series is down 13.7%, but it is an aging car, with the new version coming in 2018. Giulietta and XE are up too. Both gaining more sales, combined, than the 3 series lost.

And yes, the market is down 3%, compared to last year, but I doubt the Model 3 will only get 3% market share. The right point to get a hint of the impact the Model 3 has, will be when the Model 3 is sold. Graphics like that:

are misleading. You could also put the current C-Class demand here and show that the Model 3 has no impact whatsoever, both would be wrong.

 

[R.S]

That is a bit far fetched. I'd rather argue that in September 2015 a new A4 was revealed, while the 3 series is 4 years older.

Like I said, there will be an influence on the luxury car market, but there are way too many variables, SUVs, other competitors etc., to really pin it down.

If it was the A4, starting in Sept 2016 you should have started to see a few increases in sales. Starting in September 2015 is when the decline started and that was around the time that more details starting coming out about the Model 3.

Looking at same month sales for the BMW 3 & 4.
2015
Jan - Increase
Feb - Increase
March - Increase
April - Increase
May - Increase
June - Increase
July - Decrease
Aug - Increase
Sept- Decrease
Oct - Increase
Nov - Decrease
Dec- Decrease

2016
Jan - Decrease
Feb - Decrease
March - Decrease
April - Decrease
May - Decrease
June - Decrease
July - Decrease
Aug - Decrease
Sept - Decrease
Oct - Decrease
Nov - Decrease
Dec - Decrease

2017
Jan - Increase
Feb - Decrease
March - Decrease
April - Decrease
May - Decrease

Like I stated in my original comment, the Audi A4 came in September 2015. Like you pointed out, the month in which BMW 3series sales started to decrease. Tesla Model 3 reveal was March 31st 2016.

But thanks, you just reinforced my argument.

 

[Red Sage]

The BMW 3 series is around in it's current form since 2011, it's an aging car.

The C-Class and A4 are pretty new and by your definition sales should continue to fall, but they don't, despite a cooling US market and a slow but steady move to SUVs, the A4 and the C-Class are up 20% and 16% January-May 2017 and yes the 3 series is down 13.7%, but it is an aging car, with the new version coming in 2018. Giulietta and XE are up too. Both gaining more sales, combined, than the 3 series lost.

And yes, the market is down 3%, compared to last year, but I doubt the Model 3 will only get 3% market share. The right point to get a hint of the impact the Model 3 has, will be when the Model 3 is sold. Graphics like that:
View attachment 231554
are misleading. You could also put the current C-Class demand here and show that the Model 3 has no impact whatsoever, both would be wrong.

I say '2012' for the 3-Series because the car that debuted in 2011 was the 2012 model here. I was under the impression that the 2017 version of the 3-Series was the 'new' generation version, complete with the so-called CFRP 'life cell' technology, and had debuted in 2016. My apologies if I was incorrect, but it isn't as if I'm a BMW fan or anything...

The real problem with that graphic, is that it fails to note that about halfway through 2015, BMW stopped counting Sales of the 3-Series and 4-Series as a combined total. Individually, they both dropped a bunch in 2016. It seems they are still counting both 3-Series and 4-Series combined throughout 2016, when they were counted separately that year. To me, the BMW 4-Series Coupe/Gran Coupe (along with AUDI A3 anything & A5 Coupe) should not be counted as competitors to the Tesla Model ☰ until such time as Tesla announces a Coupe version of the car. That said, the results for those BMWs is more-or-less correct, showing a 25% decrease in sales instead of 25.5% so I guess it's sort of OK.

Your argument about the A4 is kind of weak in that, as I noted before, it climbed in sales during 2016 by a tiny fraction of the amount that the 3-Series went down. I'm sure AUDI hoped for much better results from a newly released car... Oh, but then their parent company had that DieselGate issue and they could no longer offer any of the faux 'clean diesel' versions of the A4. Oops.

So there were 31,831 units of A4 sold in 2015, and then 36,987 units sold in 2016. A positive difference of 5,156 units, or a whopping huge 21.4% of the 24,082 units that the BMW 3-Series lost between those years. What a major 'theft' in favor of AUDI. Well... Not really. AUDI's gains are basically insignificant next to BMW's losses. And it is highly unlikely AUDI will see very many more gains after the Model ☰ is readily available.

Another problem with that graphic is that it is showing U.S. Sales for the BMW 3-Series versus worldwide Reservations for the Model ☰. Tesla typically tries to keep U.S. Sales between roughly 45% and 55% of total sales, it seems. There is a possibility though, that with Model ☰ U.S. Reservations are more solidly leaning toward U.S. early adopters.

So, we'll look at it both ways... If 60% of 400,000 Reservations or so during 2016 were for U.S. buyers, that would be 240,000 units. And if it were reversed, so that 'only' 40% of Reservations are potentially U.S. buyers, that would be 160,000 units for this market. Either way, it would totally blow away recent results for BMW, Mercedes-Benz, AUDI, Alfa Romeo, Acura, Infiniti, Jaguar, Lexus, and anyone else you would like to point to in terms of annual U.S. Sales. Those guys are all in deep guano.

If Tesla gets nearly 250,000 units of Model ☰ to U.S. buyers during 2018, GM had better immediately move to release long range fully electric versions of CRUZE and MALIBU before the end of 2019, or they are DOOMED. Same thing with Ford Focus and Fusion. Chrysler/Dodge/RAM...? Meh. They are DOOMED any[DANG]way.

 

[Red Sage]

Hmmm... Looks like I missed this part:

Giulietta and XE are up too. Both gaining more sales, combined, than the 3 series lost.

2016 Sales Full Year Totals
___36 ___ Alfa Romeo Giulia
6,656 ___ Jaguar XE

2017 YTD Sales (5 Months)
__883 ___ Alfa Romeo Giulia
4,528 ___ Jaguar XE​

BMW 3-Series has sold 3,573 fewer vehicles through the first five months of 2017 than they had during 2016. And, sure, the combined 5,511 units of Giulia and XE so far this year is more than that loss by BMW. That's true. But it is also true that the 3-Series sold 1,443 fewer vehicles through the first five months of 2016 than they did in 2015. So what really matters is that the 3-Series is below its YTD rate of Sales for 2014 and 2015 in addition to being below their level for 2016. That's a whole lot of people who will not be 'upgrading' (HA!) to a 3-Series from a Camry, Civic, Accord, or Corolla this year. Yup.

Also, too much is made of SUVs 'killing off' Sedans. SUVs have simply stolen spots on sales charts that were previously held by Minivans a decade ago. The same Sedans that ruled the top 15 passenger cars then, remain there today.

 

[22522]

If Tesla gets nearly 250,000 units of Model ☰ to U.S. buyers during 2018, GM had better immediately move to release long range fully electric versions of CRUZE and MALIBU before the end of 2019, or they are DOOMED. Same thing with Ford Focus and Fusion. Chrysler/Dodge/RAM...? Meh. They are DOOMED any[DANG]way.

When I do surveys at work, people don't want electric cars. People do want Teslas.

An electric Cruze or Malibu doesn't fix anything. People want a Tesla.

 

[Red Sage]

When I do surveys at work, people don't want electric cars. People do want Teslas.

An electric Cruze or Malibu doesn't fix anything. People want a Tesla.

Well, there is that... You probably work with smart people. Congratulations! But I am mentioning it because those are the two best selling vehicles from GM that are not shaped like SUVs or Pickup Trucks.

Apparently, though the 'independent franchised dealerships' can't quite seem to figure out how to sell cars with a plug (VOLT & BOLT) that cost less than $45,000 at a rate higher than Tesla can the Model S... They have no problem at all with selling something in the neighborhood of 400,000 units of CRUZE and MALIBU each year. If they could move only 10% that quantity of electric versions of those cars too, that would eclipse what they will have managed this year with BOLT & VOLT combined, I think.

 

[R.S]

I say '2012' for the 3-Series because the car that debuted in 2011 was the 2012 model here. I was under the impression that the 2017 version of the 3-Series was the 'new' generation version, complete with the so-called CFRP 'life cell' technology, and had debuted in 2016. My apologies if I was incorrect, but it isn't as if I'm a BMW fan or anything...

The real problem with that graphic, is that it fails to note that about halfway through 2015, BMW stopped counting Sales of the 3-Series and 4-Series as a combined total. Individually, they both dropped a bunch in 2016. It seems they are still counting both 3-Series and 4-Series combined throughout 2016, when they were counted separately that year. To me, the BMW 4-Series Coupe/Gran Coupe (along with AUDI A3 anything & A5 Coupe) should not be counted as competitors to the Tesla Model ☰ until such time as Tesla announces a Coupe version of the car. That said, the results for those BMWs is more-or-less correct, showing a 25% decrease in sales instead of 25.5% so I guess it's sort of OK.

Your argument about the A4 is kind of weak in that, as I noted before, it climbed in sales during 2016 by a tiny fraction of the amount that the 3-Series went down. I'm sure AUDI hoped for much better results from a newly released car... Oh, but then their parent company had that DieselGate issue and they could no longer offer any of the faux 'clean diesel' versions of the A4. Oops.

So there were 31,831 units of A4 sold in 2015, and then 36,987 units sold in 2016. A positive difference of 5,156 units, or a whopping huge 21.4% of the 24,082 units that the BMW 3-Series lost between those years. What a major 'theft' in favor of AUDI. Well... Not really. AUDI's gains are basically insignificant next to BMW's losses. And it is highly unlikely AUDI will see very many more gains after the Model ☰ is readily available.

Another problem with that graphic is that it is showing U.S. Sales for the BMW 3-Series versus worldwide Reservations for the Model ☰. Tesla typically tries to keep U.S. Sales between roughly 45% and 55% of total sales, it seems. There is a possibility though, that with Model ☰ U.S. Reservations are more solidly leaning toward U.S. early adopters.

So, we'll look at it both ways... If 60% of 400,000 Reservations or so during 2016 were for U.S. buyers, that would be 240,000 units. And if it were reversed, so that 'only' 40% of Reservations are potentially U.S. buyers, that would be 160,000 units for this market. Either way, it would totally blow away recent results for BMW, Mercedes-Benz, AUDI, Alfa Romeo, Acura, Infiniti, Jaguar, Lexus, and anyone else you would like to point to in terms of annual U.S. Sales. Those guys are all in deep guano.

If Tesla gets nearly 250,000 units of Model ☰ to U.S. buyers during 2018, GM had better immediately move to release long range fully electric versions of CRUZE and MALIBU before the end of 2019, or they are DOOMED. Same thing with Ford Focus and Fusion. Chrysler/Dodge/RAM...? Meh. They are DOOMED any[DANG]way.

So the effect really is 19k? That's how much influence the Model 3 had? God I hope not...

The car market is too complex to really find out what influence the Model 3 had. Once it's out, we'll see.

Also, I don't think we should mix reservations will yearly sales...

 

[RubberToe]

June numbers are finally in. This is the last month where the Model 3 will not be in the list. Exciting times!

You can see the slowing numbers versus last year. April down 4k, May down 7k, June down 2k. But keep in mind that I'm showing the Bolt and Ioniq 2017 when there were no 2016 sales for those guys. Take those out and the 2017 numbers would be somewhat lower. Not to mention the Prius Plug-In.

The decline of the Prius family in ongoing. The 7,100 combined is below the 8,500 from last year. The Ioniq at 1,400 in June could be part of the decline, though the Prius decline started well before the Ioniq appeared. FWIW, not seeing as many Ioniq hybrid commercials as I did back in May, and the sales are down somewhat.

The 309,000 through June implies (not seasonally adjusted) 618,000 2017 sales, below the 691,473 for 2016.

If they produce 20,000 Model 3 cars in December, and deliver most of those in the U.S., say 18,000, it would be the 7th best selling car in the U.S. Welcome to the future

 

[Red Sage]

So the effect really is 19k? That's how much influence the Model 3 had? God I hope not...

The car market is too complex to really find out what influence the Model 3 had. Once it's out, we'll see.

Also, I don't think we should mix reservations will yearly sales...

Wow. I thought I had responded to this post already... Maybe it was deleted or relocated... Or maybe I composed that reply on my tablet or phone and it was lost, rejected somehow. I hate it when that happens.

In any case... I have no idea what you are talking about here with, "So the effect really is 19k?" That makes no sense to me at all. I thought that I had made it quite clear there has been a very large and steady decline in Sales of the BMW 3-Series in the U.S., and that decline has continued through this year. The BMW 3-Series is in serious trouble. Through the first six months of 2017, they have suffered further losses to YTD totals below where they were in 2016 by 15.98%.

In 2012, when the Model S was only sold over the course of about six months of the year, it did not outsell the Mercedes-Benz S-Class, BMW 7-Series, or AUDI A8 for the year. But the Model S did outsell all of them during 2013, even though the S-Class saw a 12% improvement in Sales over the previous year, when it led the segment. I expect to see a similar pattern with Tesla Model ☰ in 2017 and 2018. It may not outsell 3-Series and C-Class for the year as a whole, but it certainly has a chance to outsell the A4. And in 2018 it will blow all three of them out of the water, along with several others.

The only real difference this time is that the perennial 'winner' among 'entry level luxury' cars is the 3-Series, but it has lost in 2016 and is again losing in 2017 to the C-Class here. So Model ☰ has to beat the C-Class instead, and it will, because that car's sales are not out of reach at all with 400,000+ Reservations in place. Plus, C-Class may be 'winning' right now, but their sales are still far below the best that the 3-Series had been able to manage.

 

[Red Sage]

UPDATE on Newcomers to 'Entry Level Luxury'
2016 Sales Full Year Totals
___36 ___ Alfa Romeo Giulia
6,656 ___ Jaguar XE

2017 YTD Sales (6 Months)
3,474 ___ Alfa Romeo Giulia
5,166 ___ Jaguar XE​

 

[EVNow]

The 309,000 through June implies (not seasonally adjusted) 618,000 2017 sales, below the 691,473 for 2016.

All cars down 11.4% for 2017. Cross-overs up 8.6%.

Auto Sales - Markets Data Center - WSJ.com

 

[Brando]

Well, there is that... You probably work with smart people. Congratulations! But I am mentioning it because those are the two best selling vehicles from GM that are not shaped like SUVs or Pickup Trucks.

Apparently, though the 'independent franchised dealerships' can't quite seem to figure out how to sell cars with a plug (VOLT & BOLT) that cost less than $45,000 at a rate higher than Tesla can the Model S... They have no problem at all with selling something in the neighborhood of 400,000 units of CRUZE and MALIBU each year. If they could move only 10% that quantity of electric versions of those cars too, that would eclipse what they will have managed this year with BOLT & VOLT combined, I think.

IF we look at car ads, we see what the Auto Industry thinks buyers respond to. Sadly, it would seem concern for efficiency/safety/cost of ownership are down the list of concerns. IF people are concerned about these things the ads certainly don't help inform the consumer (nor do dealerships, right?) Well, if we think about it, informing the consumer ... seems to actually be NOT to inform, right?

Cost still the main problem for the bottom 80%, but we all know that is changing.
For those who don't search for Tony Seba RethinkX and watch/listen to one of his talks, most recent tend to have latest stats/info but all show the same trends.

 

[SageBrush]

IF we look at car ads, we see what the Auto Industry thinks buyers respond to. Sadly, it would seem concern for efficiency/safety/cost of ownership are down the list of concerns. IF people are concerned about these things the ads certainly don't help inform the consumer (nor do dealerships, right?) Well, if we think about it, informing the consumer ... seems to actually be NOT to inform, right?

Cost still the main problem for the bottom 80%, but we all know that is changing.
For those who don't search for Tony Seba RethinkX and watch/listen to one of his talks, most recent tend to have latest stats/info but all show the same trends.

I agree, but it seems fair to point out that the differences in cars for the middle 80% of that marketed in the $20 - $30k range are pretty minor when viewed from a distance so it should not be surprising that the marketing reflects the same. An EV does not take effort to differentiate.

 

[Brando]

I agree, but it seems fair to point out that the differences in cars for the middle 80% of that marketed in the $20 - $30k range are pretty minor when viewed from a distance so it should not be surprising that the marketing reflects the same. An EV does not take effort to differentiate.

Not sure your point. My point would be Tesla doesn't need to "convince" buyers to buy - especially the type of ads you see for cars. Cadillac (which I never cared for) Mazda (which I like efficient for an ICE) and we know, Bolt ads don't seem to help enough as they may not make their 30,000 annual sales target, am I right? Do Bolt ads inform consumer about any useful facts? I haven't watch, so I really don't know, but past history would tell me no.

U.S. ad spend per vehicle sold - selected car brands 2015 | Statistic

Wonder how valid these numbers are. Would like to know % of actual selling price.
If you were setting budgets, would you spend on the ads or the product quality?
That is still one of the main differences - manufacture demand or build the best you can.
Elon is putting $ into factory design to decrease costs vs ads to build demand, right?

 

[SageBrush]

Not sure your point.

My point is that current marketing reflects a homogenized market. You know it is so when adverts talk about cup holders or my wife ignores the car and seemingly makes her purchase decision based on her purse placement. The rest must be similar, not important, or good enough

 

[Red Sage]

IF we look at car ads, we see what the Auto Industry thinks buyers respond to. Sadly, it would seem concern for efficiency/safety/cost of ownership are down the list of concerns. IF people are concerned about these things the ads certainly don't help inform the consumer (nor do dealerships, right?) Well, if we think about it, informing the consumer ... seems to actually be NOT to inform, right?

Cost still the main problem for the bottom 80%, but we all know that is changing.
For those who don't search for Tony Seba RethinkX and watch/listen to one of his talks, most recent tend to have latest stats/info but all show the same trends.

I think that advertising obfuscates, while marketing illuminates. The continuous stream of trite terms that are used repeatedly in advertising automobiles is truly disturbing in that it is designed to communicate certain ideas, or ideals, without actually saying anything substantial. Visions of exclusivity, heritage, spirit, tradition, control, history, craftsmanship, and 'luxury'. In other words? Pure advertising [BOLSHEVIK]. More and more often even 'regular' car companies are using those terms in their promotional attempts for their cars. I think that not-so-secretly, all of them want their vehicles to be seen as 'luxurious' and each of them wants to strike a balance between being scarcely desired and selling to everyone they can. That is, nobody wants to sell economy/commuter cars, most would prefer to be able to get away with charging ridiculous amounts of money to sell less than 4,000 cars per year like Rolls-Royce or Bentley, but no one wants to give up the truckloads of cash they earn and the quarterly bonus checks that result from selling relatively 'affordable' cars either.

 

[AceSkywalker]

I think that advertising obfuscates, while marketing illuminates. The continuous stream of trite terms that are used repeatedly in advertising automobiles is truly disturbing in that it is designed to communicate certain ideas, or ideals, without actually saying anything substantial. Visions of exclusivity, heritage, spirit, tradition, control, history, craftsmanship, and 'luxury'. In other words? Pure advertising [BOLSHEVIK]. More and more often even 'regular' car companies are using those terms in their promotional attempts for their cars. I think that not-so-secretly, all of them want their vehicles to be seen as 'luxurious' and each of them wants to strike a balance between being scarcely desired and selling to everyone they can. That is, nobody wants to sell economy/commuter cars, most would prefer to be able to get away with charging ridiculous amounts of money to sell less than 4,000 cars per year like Rolls-Royce or Bentley, but no one wants to give up the truckloads of cash they earn and the quarterly bonus checks that result from selling relatively 'affordable' cars either.

Well, the marketing is working. There is a clear definition in the consumer mind what car brands, and what price points are luxury, and what are not. Tesla makes ZERO references to luxury in their wording, yet consumers associate the Model S with the Mercedes S Class, and expect the trappings that come standard, or at least are options in those higher end luxury cars.

 

[RubberToe]

Welcome to the Model 3 era...

And LOOK, the Model 3 is at the top of the chart !

Of particular note: YOY sales of this group are off 11,000 units, and if you take away the 2017 sales of the Bolt, Ioniq and Prius Plug In, well, the blood is really flowing in the streets. Overall U.S. Sales continue their downtrend too, accelerating even.

BMW 3-Series nose dive continues, as does combined Prius sales. Ioniq is tailing off, and I haven't seen as many commercials for this guy as I had been a couple months ago. Ioniq Electric at 43 simply cannot be found for sale anywhere in California. Stories seem to show that high demand in Europe and Korea are exceeding the available battery supply.

So, why is the Model 3 at the top of the spreadsheet? Because when they start rolling off the assembly line later this year at the rate of 5,000 cars per week, those will all be going to U.S. customers. Just have a look at the Jul-17 column below and note how many of these ICE age cars are selling 20,000 per month. If you guessed 0, you are either an astute student of math, or not a GM Bolt fanboy.

The Model 3 is going to wipe out this entire class of vehicles. Not only that, but 20,000 units in July would make it the 6th best selling car in the U.S. period. Right behind the Civic, Camry, Accord, Corolla and Altima. Any of you guys ever heard of any of those cars?

Might be time to fire up another spreadsheet showing the top 20 selling cars in the U.S., just so we can watch the Model 3 gobble up their collective lunches. Gobble, Gobble, Gobble, Thanksgiving is coming...

Prehistoric ICE vehicle Turkey depiction courtesy of legacy automakers.

 

[Spidy]

Honda is toast