tigerhonaker
05-23-2006, 12:51 AM
Bite-sized Wonders?
Automakers stress fun, fuel efficiency in effort to sell small cars
By JEAN HALLIDAY | ADVERTISING AGE
AutoWeek | Published 05/17/06, 3:19 pm et
AT A GLANCE:
SMALL-CAR PITCHES
Some of the snappy words Honda, Toyota and Nissan are using to publicize their new small cars.
Honda calls the Fit an "impetuous, bite-sized wonder."
Toyota says the Yaris is "The car you can afford to drive ... and want to drive."
Nissan asserts the Versa's "painstaking attention to design."
Automakers are wooing young, first-time vehicle buyers with cooler entry-level small cars. In the process, the companies are changing how they develop long-term brand loyalty.
Many current-generation small cars offer such features as versatile interiors and factory-installed iPod or MP3 plugs. By contrast, manufacturers whose entry-level cars "are boring and devoid of style are only going to appeal to old, retired people who just want cheap transportation," says Wes Brown, an analyst with Iceology, a Los Angeles consulting firm.
Brown cites the Toyota Echo, a rare misstep by Toyota Motor Sales U.S.A. Inc. The car went on sale in the United States in 1999. Despite a sticker price of less than $11,000, Brown notes, the Echo had a high percentage of older buyers.
Toyota is replacing the Echo with an Americanized version of its Yaris. The car has a base price of $11,530, including shipping.
Toyota has predicted it will sell 50,000 of the cars this year and 70,000 in 2007. Brown expects the Yaris to be more popular among younger buyers than the Echo was.
Fit for fun
At the same time, American Honda Motor Co. is introducing the 2007 Honda Fit, one of its best-selling cars in other countries.
Dick Colliver, executive vice president of sales for Honda and Acura Divisions, calls the Fit "fun, flexible and fuel-efficient." He predicts U.S. sales of 33,000 units this year and 50,000 in 2007. The Fit has a base price of $14,400, including shipping.
Early this summer, the 2007 Nissan Versa will reach U.S. dealerships. The Versa will replace the Sentra as Nissan Division's entry-level model.
Nissan says the Versa will have a base price of about $12,000. It has a combined highway-city fuel economy rating of 38 mpg.
It's no coincidence that Toyota, Honda and Nissan are introducing entry-level cars in the United States at about the same time. The smallest previous cars from Honda and Toyota, the Civic and Corolla, have grown in size and price over the years. The Nissan Sentra also is moving up a notch.
"The Japanese companies have upsided their whole fleets," says John Casesa, managing partner of Casesa Shapiro Group LLC and a former auto analyst for Merrill Lynch & Co. "That opened space at the smaller end."
Automakers are chasing the children of baby boomers. That group -- called echo boomers -- will continue to grow over the next decade.
GM responds
The Japan 3 have adapted their new small cars for the U.S. market from models they sell elsewhere. Analyst Brown notes that General Motors has done much the same thing with the Chevrolet Aveo, designed and built in South Korea.
Ford Motor Co. has no such entry in the United States. But it could easily have one, Brown says, by importing its small Ka model from Europe.
Brent Dewar, GM's vice president of North American field sales, service and parts, says the company realized the small-car segment was splitting into two groups of buyers: those attracted by price and those who want sporty features.
GM retired the Chevrolet Cavalier after the 2005 model year, replacing it with the price-leading Aveo in 2004 and the sporty Cobalt in 2005.
Kia Motors America Inc. competes in the entry-level segment with its Rio small car, which has a base price of $11,100, including shipping.
"Pricing is the starting point of anything in that segment," says Ian Beavis, Kia's vice president of marketing. Entry-level is a "strange segment," he says, because its two largest segments include buyers who are less than 30 years old or over 50.
Kia targets young buyers for the Rio. But its advertising also stresses the car's fuel economy and safety.
This spring, Hyundai Motor America is adding a pair of three-door siblings to its Accent four-door sedan. Hyundai is positioning the Accent to compete with the new entries from the Japan 3.
The Accent GS has a base price of $11,495, including shipping. It has more horsepower than the Yaris, Fit or Scion xA, says John Krafcik, Hyundai's vice president of product development and strategic planning. Accent buyers can customize the car with about three dozen factory accessories -- more than the xA offers, Krafcik says.
"We're going to get cross-shopped," Krafcik says. "We know the Japanese competitors are coming, and that's part of the strategy with the Accent."
http://www.autoweek.com/apps/pbcs.dll/article?AID=/20060518/FREE/60515014/1024/LATESTNEWS
Automakers stress fun, fuel efficiency in effort to sell small cars
By JEAN HALLIDAY | ADVERTISING AGE
AutoWeek | Published 05/17/06, 3:19 pm et
AT A GLANCE:
SMALL-CAR PITCHES
Some of the snappy words Honda, Toyota and Nissan are using to publicize their new small cars.
Honda calls the Fit an "impetuous, bite-sized wonder."
Toyota says the Yaris is "The car you can afford to drive ... and want to drive."
Nissan asserts the Versa's "painstaking attention to design."
Automakers are wooing young, first-time vehicle buyers with cooler entry-level small cars. In the process, the companies are changing how they develop long-term brand loyalty.
Many current-generation small cars offer such features as versatile interiors and factory-installed iPod or MP3 plugs. By contrast, manufacturers whose entry-level cars "are boring and devoid of style are only going to appeal to old, retired people who just want cheap transportation," says Wes Brown, an analyst with Iceology, a Los Angeles consulting firm.
Brown cites the Toyota Echo, a rare misstep by Toyota Motor Sales U.S.A. Inc. The car went on sale in the United States in 1999. Despite a sticker price of less than $11,000, Brown notes, the Echo had a high percentage of older buyers.
Toyota is replacing the Echo with an Americanized version of its Yaris. The car has a base price of $11,530, including shipping.
Toyota has predicted it will sell 50,000 of the cars this year and 70,000 in 2007. Brown expects the Yaris to be more popular among younger buyers than the Echo was.
Fit for fun
At the same time, American Honda Motor Co. is introducing the 2007 Honda Fit, one of its best-selling cars in other countries.
Dick Colliver, executive vice president of sales for Honda and Acura Divisions, calls the Fit "fun, flexible and fuel-efficient." He predicts U.S. sales of 33,000 units this year and 50,000 in 2007. The Fit has a base price of $14,400, including shipping.
Early this summer, the 2007 Nissan Versa will reach U.S. dealerships. The Versa will replace the Sentra as Nissan Division's entry-level model.
Nissan says the Versa will have a base price of about $12,000. It has a combined highway-city fuel economy rating of 38 mpg.
It's no coincidence that Toyota, Honda and Nissan are introducing entry-level cars in the United States at about the same time. The smallest previous cars from Honda and Toyota, the Civic and Corolla, have grown in size and price over the years. The Nissan Sentra also is moving up a notch.
"The Japanese companies have upsided their whole fleets," says John Casesa, managing partner of Casesa Shapiro Group LLC and a former auto analyst for Merrill Lynch & Co. "That opened space at the smaller end."
Automakers are chasing the children of baby boomers. That group -- called echo boomers -- will continue to grow over the next decade.
GM responds
The Japan 3 have adapted their new small cars for the U.S. market from models they sell elsewhere. Analyst Brown notes that General Motors has done much the same thing with the Chevrolet Aveo, designed and built in South Korea.
Ford Motor Co. has no such entry in the United States. But it could easily have one, Brown says, by importing its small Ka model from Europe.
Brent Dewar, GM's vice president of North American field sales, service and parts, says the company realized the small-car segment was splitting into two groups of buyers: those attracted by price and those who want sporty features.
GM retired the Chevrolet Cavalier after the 2005 model year, replacing it with the price-leading Aveo in 2004 and the sporty Cobalt in 2005.
Kia Motors America Inc. competes in the entry-level segment with its Rio small car, which has a base price of $11,100, including shipping.
"Pricing is the starting point of anything in that segment," says Ian Beavis, Kia's vice president of marketing. Entry-level is a "strange segment," he says, because its two largest segments include buyers who are less than 30 years old or over 50.
Kia targets young buyers for the Rio. But its advertising also stresses the car's fuel economy and safety.
This spring, Hyundai Motor America is adding a pair of three-door siblings to its Accent four-door sedan. Hyundai is positioning the Accent to compete with the new entries from the Japan 3.
The Accent GS has a base price of $11,495, including shipping. It has more horsepower than the Yaris, Fit or Scion xA, says John Krafcik, Hyundai's vice president of product development and strategic planning. Accent buyers can customize the car with about three dozen factory accessories -- more than the xA offers, Krafcik says.
"We're going to get cross-shopped," Krafcik says. "We know the Japanese competitors are coming, and that's part of the strategy with the Accent."
http://www.autoweek.com/apps/pbcs.dll/article?AID=/20060518/FREE/60515014/1024/LATESTNEWS