TORONTO -

A pair of Japanese brands has swept the top honors yet again in ALG’s Canadian Residual Value Awards, which were revealed Thursday.
For the second straight year, the top overall award for mainstream brands went to Subaru, while Infiniti took top honors in the luxury category for the third consecutive year.

This is the third year of the Canadian Residual Value Awards.

Subaru vehicles also fared well in the individual segment awards, as the brand was represented in four categories. BMW models won four segments, as well.

Toyota notched three category wins and Nissan/Infiniti and Honda/Acura each took three, as well. Volkswagen and Mazda each were honored in one segment award.

As most likely know, the awards spotlight the vehicles in 19 segments that are expected to hold their original price the strongest. ALG also honors two overall brands for residual strength — one on the mainstream side of the market and one on the luxury side.

ALG, a subsidiary of DealerTrack Holdings, determines the winners after examining the vehicles in such criteria as segment competition, historical vehicle performance and industry trends. ALG considered 2011 model-year units for this year’s awards.

“A key indicator of a brand’s health and a significant contributor to driving increased profitability for a brand is high residual value,” stated Raj Sundaram, senior vice president, solutions group, ALG. “Our overall winners and market segment honorees are perfect examples of brands that are committed to delivering real value to dealers and customers.”

ALG Stresses Importance of Residuals for Dealers

In an interview with Auto Remarketing Canada, Eric Lyman, director of residual value solutions at ALG, emphasized the importance for dealers in understanding residuals and where their respective brands stand.

He stressed that it “clearly plays a part in the lease payment.” A stronger residual allows for consumer to get into a lease more easily. Stronger residuals also mean a stronger return on investment for shoppers.

Dealers would be wise to know “certainly how it impacts the lease payment,” Lyman noted.

They also “should certainly know their brand’s standing with respect to residual values,” he added. “It’s a way of reflecting the health of the brand the used market.

“It kind of gives dealers an opportunity to see at a high level where their brand stacks up against competitive brands,” Lyman noted.
 

He stressed that having a grasp on residual helps a dealer understand the “baggage or advantage” their respective brand carries, and get an idea of what buyers will be willing to pay.

So what specifically, has stood out with Subaru and Infiniti?

At Subaru, the automaker has shifted its “go-to-market strategy.” The brand has revised it to become more “value-oriented.”

“In recent years, Subaru has taken an approach of offering highly contented vehicles with all-wheel drive at a price competitive with two-wheel drive models (particularly top tier mainstream brands like Honda and Toyota),” Lyman shared. “This offers consumers a compelling choice, especially in the Canadian market where AWD is a key selling point not offered by many of the competitors.”

He stressed that the “all-wheel strategy certainly plays well in Canada.”

“Given the climate in Canada, the all-wheel drive that’s standard on all their vehicles … certainly drives up some interest and demand for the brand, as well,” Lyman noted.

The automaker has also had a bevy of new product releases, which tends to help them fare better when it comes to residual values.

“ALG data shows that vehicles retain higher values earlier on in their life cycle and that values erode as the vehicle ages in the new/used market. This is of course a general rule, and there are exceptions to this phenomenon,” he explained. “Thus, all new vehicles have a positive impact on residual values and Subaru is benefiting from the recent launch of all new products like the Legacy, Outback and the relatively new Forester.”

Sundaram noted: “Subaru continues to grow its sales and market share in Canada, with its lineup of reliable all-wheel drive vehicles. Subaru’s brand loyalty has been on the rise, and the company has been careful to match is supply with consumer demand, keeping its forecast retention above that of other mainstream brands.”

With regard to Infiniti, Lyman touted the brand’s new products and offering value against their rivals.

“The Infiniti brand does a great job at pricing their vehicles in line with consumer perception and consumer demand,” Lyman shared. He added: “They don’t have to rely as much on incentive pricing to drive products.”

Sundaram noted: “Infiniti’s top ranking among luxury brands category is a testament to the significant appeal and strong value of its models. Infiniti has become known for meeting high ideals in both performance and luxury, and it offers buyers an excellent alternative to the traditional European luxury brands.”

Brands Offer Reaction

Continuing along, Infiniti and Subaru both chimed in with reaction to having won ALG’s awards.

Beginning with Infiniti, in addition to it claiming the overall luxury honor, its QX56 model won the luxury full-size utility category.

“When we launched the fully redesigned QX56 last year we knew we had raised the bar in full-size luxury driving and this award confirms we have a standout in the segment,” shared Infiniti Canada director Wendy Durward.

“And Infiniti has now been awarded best luxury brand for three consecutive years confirming that our exceptional lineup provides not only exhilarating performance, but class-leading residual value,” she added.

As far as Subaru, it took honors in the following segments in addition being recognized as the top mainstream brand:

Compact: Subaru Impreza
Midsize: Subaru Legacy
Sporty: Subaru Impreza WRX/STI
Midsize Utility: Subaru Outback

“Subaru is delighted to receive this outstanding recognition from ALG, and to be named Best Mainstream Brand for the second time is further proof of what Subaru owners already know — that a Subaru is excellent value for the money,” pointed out Subaru Canada chairman, president and chief executive officer Shiro Ohta.

“This adds yet another level of confidence for people who might be considering Subaru ownership,” Ohta added.

Other Brands Make Strides

Moving along, ALG also highlighted some of the success experienced by other brands in value retention. On the mainstream side, Lyman pointed out that Buick climbed four spots from 2010, making it the biggest improver.

For luxury makes, Volvo and Lincoln have made a lot of progress, as well.

Acura was the runner-up on the luxury side behind Infiniti. It was followed by BMW at No. 3, then Audi and Volvo in spots four and five, respectively. For mainstream brands, Honda was the runner-up and Nissan, Toyota and Volkswagen were Nos. 3-5, respectively. Mazda was sixth and Mitsubishi was seventh.

ALG emphasized on its website that “Only brands above the industry average were ranked.”

Aside from the Infiniti division claiming to luxury honors and a segment award, the Nissan division captured two segment awards: the Rogue for best compact utility and the GT-R for best luxury sports car. The GT-R has won its segment in each of the three years of the Canadian Residual Value Awards and the Rogue has been honored in two of the three (2009 and 2011).

“The Rogue and GT-R are two very different vehicles which reflect the innovation and value that’s offered across the Nissan lineup, from those looking for fun and functionality to brute power and performance,” said Nissan Canada director of marketing Judy Wheeler. “The recognition from ALG is a great proof point to consumers on the long-term value provided by Nissan.”

More information can be found at https://www.alg.com/ResidualValueAwardsCA.

The summarized list of winners is as follows:

Mainstream Brand: Subaru
Luxury Brand: Infiniti

Segment Winners
Sub Compact: Honda Fit
Compact: Subaru Impreza
Midsize: Subaru Legacy
Full-size: Toyota Avalon
Sporty: Subaru Impreza WRX/STI
Alt-Fuel: Volkswagen Jetta TDI
MPV: Honda Odyssey
Compact Utility: Nissan Rogue
Midsize Utility: Subaru Outback
Fullsize Utility: Mazda CX-9
Midsize Pickup: Toyota Tacoma
Fullsize Pickup: Toyota Tundra
Near Luxury: BMW 1 Series
Luxury: BMW 5 Series
Luxury Sportscar: Nissan GT-R
Luxury Alt-Fuel: BMW 335d
Luxury Compact Utility: Acura RDX
Luxury Midsize Utility: BMW X5
Luxury Full-size Utility: Infiniti QX56