Power Information Network Reports: Midsize Utility Vehicle Segment Shows Signs of Weakening

WESTLAKE VILLAGE, Calif.: 21 June 2006 —The midsize utility segment, which includes some of the auto industry’s most popular models, is increasingly showing signs of considerable weakness, as it has been since the beginning of the year, according to real-time retail transaction data from the Power Information Network (PIN), a division of J.D. Power and Associates. To better reflect consumer demand for new vehicles, PIN data includes retail transactions only and does not include fleet sales.

The midsize utility segment, which is made up of traditional (non-crossover) midsize SUVs, currently records the second-highest days-to-turn rate among the 26 segments tracked by J.D. Power and Associates and PIN. Vehicles in the segment that were sold in May sat on dealership lots an average of 73 days. Full-size vans sold in May were on dealer lots an average of 80 days before they were sold, while vehicles in the compact basic car segment, with one of the quickest average days-to-turn rates in May, spent just 35 days on the lot.

The days-to-turn rate for the midsize utility segment is up from 67 at the start of 2006, despite the fact that the overall industry rate was 57 in both January and May.

While some models in the segment, such as the Honda Pilot (46 days to turn), Toyota 4Runner (56) and Jeep Commander (56), are turning quicker than the industry average, others, such as the Mitsubishi Endeavor (140), Dodge Durango (118) and Kia Sorento (105), are moving much slower.

“In addition to midsize utility vehicles sitting longer on dealer lots, we’re also seeing declining segment loyalty, or fewer owners returning to the segment when they purchase or lease their next vehicle,” said Tom Libby, senior director of industry analysis at PIN. “The percentage of midsize utility owners who trade for another midsize utility has declined from 29.2 percent in January to 24.5 percent in May.”

The percentage of midsize utility vehicle owners who trade up to a large utility vehicle has declined as well, dropping from 10.5 percent in January to 7.4 percent in May. In contrast, the percentage of midsize utility vehicle owners trading to midsize conventional sedans has jumped from 7.1 percent in January to 10.7 percent in May. In addition, the percentages of midsize utility vehicle owners switching to other segments have climbed since the beginning of the year in the compact basic car (from .2% to .6%), compact conventional car (5.6% to 8.5%) and compact crossover utility vehicle (7.8% to 9.2%) segments.

“Concern about the midsize utility segment has been rising for some time, due in no small measure to skyrocketing gasoline prices,” said Bob Schnorbus, chief economist of global forecasting at J.D. Power and Associates. “However, the segment also has been buffeted by a pull-back in incentives and a flood of new models in other segments. As gasoline prices remain high, with little offset from incentives, consumers can be expected to adjust their buying preferences.”

Schnorbus also notes that other factors influencing new-vehicle purchase decisions, including income, family size and lifestyle, are helping to limit the negative impact of gasoline prices on sales.

About Power Information Network (PIN)

PIN’s automotive solutions are based on the collection and analysis of daily new- and used-vehicle retail transaction information from more than 10,000 automotive dealership franchises in North America. PIN’s industry-leading automotive solutions incorporate consumer demand and sales information to improve business for automotive dealers, manufacturers, lenders, and other companies in the industry. Additional information is available at www.powerinfonet.com

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 290 offices in 38 countries. Sales in 2005 were $6.0 billion. Additional information is available at http://www.mcgraw-hill.com.