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PIN: Compact Vehicles Continue to Gain Market Share

January 25, 2007

Compact vehicles continue to gain a greater share of the U.S. new-vehicle market, according to real-time retail transaction data from the Power Information Network (PIN), a division of J.D. Power and Associates. The compact vehicle share of the total new-vehicle market rose from 27.9 percent in 2005 to 31.2 percent in 2006. During the same time period, the share of midsize vehicles dropped from 42.8 percent to 40.4 percent, while the share of large vehicles declined from 29.3 percent to 28.5 percent. Six years ago, in 2000, compact vehicles accounted for just 23.8 percent of the market.Five of the seven segments with the fastest turn rates in the industry in December 2006 were compact vehicle segments, with the compact premium CUV (28 days) and compact basic car (35 days) segments ranking one and two, respectively, in the industry on this measure. In addition, the turn rates for these two segments declined dramatically from December 2005 to December 2006, even though the industry’s turn rate climbed from 55 days to 67 days over the same time period. Seven of the 12 new models with the fastest turn rates in the industry in December—among more than 290 models—were compact vehicles.Segment loyalty of compact vehicle owners, particularly in the non-luxury sector, is increasing as well. In the fourth quarter of 2006, 56.4 percent of all owners of non-luxury compact vehicles traded for another one—up from 51 percent in the fourth quarter of 2005. Furthermore, the percentage of owners of both midsize and large non-luxury vehicles trading to a compact vehicle rose as well, from 20.8 percent to 25.8 percent among owners of midsize non-luxury vehicles and from 7.0 percent to 9.1 percent among large non-luxury vehicle drivers.Seven compact models were either introduced or confirmed for the U.S. market earlier this month at the 2007 North American International Auto Show in Detroit, including the restyled Ford Focus, the Nissan Rogue crossover, the Volvo XC60 concept and small crossover entries from Infiniti, Lexus, Cadillac and Audi in the pipeline. Volume in this segment is expected to quadruple, from 40,000 units in 2006 to 160,000 unit by 2008.
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