Toyota Unveils the New Generation Yaris (segment B)

 

Toyota has just unveiled the new generation of the Yaris (segment B) which is actually a further restyling of the model presented in 2011 and restyled at mid-life in 2014. The 2017 version thus adopts few external changes in relation to the previous version: there is a redesigned front and rear part (the vertical rear lights become horizontal), yet the platform remains identical to the previous models’.

This product strategy is inspired by what was done at Opel for its recent Corsa and Ford for its new Fiesta. One  therefore has  to wait theoretically for 2023 to see a completely different Toyota Yaris appear. The most interesting novelty on the new Yaris is probably its new petrol engine 1.5l with 110hp  which replaces the old 1.3l  with  99hp. The new model will of course be available in a hybrid version (gasoline-electric), which accounts for nearly 40% of Yaris sales in Europe. It is not certain  whether the diesel version will be renewed.

The new Yaris competes with Japanese segment B saloons, such as the Nissan Micra, Mazda 2, Honda Jazz, and also the European market stars in this segment, such as the VW Polo, Renault Clio, Ford Fiesta, Opel Corsa and Peugeot 208. The new Yaris will be presented at the Geneva Motor Show in early March 2017 . Inovev tables on a volume of 400,000 Yaris produced each year, including 230,000 on the French site of Onnaing.

 
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Japan PC and LUV Market Situation in 2016
 
The Japanese automotive market (PC + LUV) fell by 1.5% in 2016, to less than 5 million units (4.97 million units) for the first time since 2011. This market has been stagnant since the early 2000s and is even  tending towards a year over  year reduction . This  is due to  structural rather than cyclical factors  The Japanese market will never regain its levels of the 1990s (between 6 million and 8 million units per year). Therefore, in order to survive and  grow, Japanese manufacturers must  continue to develop their activities  abroad and to export more from Japan.

Since imports are traditionally very low in Japan, Japanese manufacturers are able to control the  domestic market . In 2016, however, most of them lost market share to the Toyota (Toyota-Lexus-Daihatsu) group, which enjoys:

1. An ultra-dominant position in the Japanese market (45% of market share on average each year).

2. Financial power that allows it to propose and renew a large number of models.

3. The renewal in 2016 of two new successful models: the Toyota Prius and Siena. These two models almost doubled their sales in 2016 compared to 2015.

In 2016, Toyota sold 2.23 million vehicles on the Japanese market, ahead of Honda (707,000), Suzuki (623,000), Renault-Nissan (534,000), Mazda (201,000), Subaru(156,000) and Mitsubishi (130,000). Imports account for 387,000 units, or 7.8% of the total market.

 
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GM Group Global Market Situation in 2016
 
The GM Group (Chevrolet, Buick, Opel, Vauxhall, Holden, GMC, Cadillac, Baojun, Wuling) has published sales figures for 2016. Its worldwide sales amount to 9.97 million vehicles, an increase of 1.3% (130,000 units) compared to 2015. However, this increase is less than the global growth of car sales overall (+ 4.6%). Nonetheless  the GM group has managed to retain its  global third place, behind VW and Toyota.

Global sales of the GM Group in 2016 break down as follows:

1.China is its first market, with 3.8 million vehicles (+ 7.1%), or 38% of its worldwide sales.

2.The United States is its second market, with 3.0 million vehicles (-1.3%), or 30% of its worldwide sales.

3.Europe is its third market, with 1.2 million vehicles (+ 2.7%), or 12% of its worldwide sales.

4.South America is its fourth largest market, with 584,000 vehicles (-9.6%), or 6% of its worldwide sales.

These four markets account for 86% of the GM's global sales in 2016, with 4.18 million Chevrolet vehicles, 1.43 million Buick vehicles, 1.18 million Opel / Vauxhall vehicles,  1.12 million Wuling vehicles, 0.76 million Baojun vehicles, 0.66 million GMC vehicles and 0.3 million Cadillac vehicles. The best-selling  models of the group in 2016 are the pick-up Chevrolet Silverado (655,000 units) and the sedan Chevrolet Cruze (650,000 units).

 
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Japan 15 Top Models in 2016
 
Of the total of 4.15 million new passenger cars sold in Japan in 2016, the Toyota Prius (fully renewed last year) has regained its leading position (248,000 units), ahead of the Honda N-Box (186,000 Units) and Toyota Aqua (168,000 units). In addition,  the new generation of Prius has taken nearly 50,000 customers from the less recent  Aqua (called Prius C in some markets), the Aqua being  a hybrid car (gasoline-electric) like the Prius.

Of the fifteen best-selling cars in Japan in 2016, there are 4 Toyota, 4 Suzuki, 3 Honda, 2 Nissan and 2 Daihatsu. Suzuki and Daihatsu remain specialised in  the midget (K-car) segment, which constituted  33% of the Japanese market last year.

The midgets correspond to the European A car segment. Of the fifteen best-selling cars in Japan in 2016, there are 9 midgets and 6 upper segment cars (3 in segment B and 3 in segment C).

The Toyota Corolla (segment C sedan) which  is one of the best-selling cars in the world (990,000 units in 2016) is only thirteenth in the Japanese market.

SUVs fail to penetrate the Japanese market, with a market share of only 11% in 2016, against 26% in Europe, 37% in China and 39% in the USA. Minivans account for 20% of the Japanese market. Sedans account for more than two-thirds of the Japanese market (69%).

 
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PSA & Opel / Vauxhall: positioning of the two groups
 

PSA Group has confirmed reviewing with General Motors a number of strategic initiatives to improve its profitability and operational efficiency, including a potential acquisition of Opel / Vauxhall. The objective of the present analysis is to study the relative positioning of the two groups;


Financially, GM loses money with its European subsidiaries for 16 years. PSA returned to profits in 2015, after suffering three years of losses.


What would PSA gain by acquiring Opel? The growth of PSA is not satisfactory. Its sales in Europe stagnate, decline in China, Russia and South America. The Iranian market remains fragile and a return to the USA seems unlikely. Within this context, an external acquisition could be an interesting option for PSA group to grow. And the acquisition of the European subsidiaries of GM may appear as a good opportunity.

 

PSA sold 3.15 million vehicles worldwide in 2016 and Opel / Vauxhall 1.18 million. The acquisition of Opel by PSA would enable it to sell more than 4.3 million vehicles a year in the world, including more than 3 million in Europe. The PSA group has a strong strategy of cost reduction. And costs could be reduced by economies of scale providing that the Opel range is gradually adopting PSA platforms and engines, as is already the case for the new Opel Crossland X. The rationalization of the industrial tool could enable to close several factories in order to saturate the capacity of the other factories. The most threatened factories would be Ellesmere Port, Luton, Rennes or Rüsselsheim.


 
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