Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
- The issues
- Car purchasing process remains a stressful endeavor for shoppers
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- Figure 1: Attitudes toward car purchasing, by gender and age, March 2018
- Older Millennials have trust issues with automotive sales
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- Figure 2: Attitudes toward car purchasing, by millennials vs non millennials, March 2018
- Purchase location remains undecided until moment of purchase
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- Figure 3: Pre-purchase decisions, by purchase intent, March 2018
- The opportunities
- Millennials show the highest purchase intent among generations
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- Figure 4: Purchase intent, by generation, March 2018
- Brands can conquest sales by winning on lifestyle
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- Figure 5: Pre-purchase decisions, March 2018
- More than four in 10 Millennial car shoppers would buy online
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- Figure 6: Attitudes toward car purchasing, by generation, March 2018
- What it means
The Market – What You Need to Know
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- Overall vehicle sales market forecasted for growth
- Interest rates set to increase multiple times
- Unemployment at record lows and consumer confidence remains high
- Gas prices slowing creeping back to $3 gallon levels
- Market sales continue to lean toward larger light trucks
Market Size and Forecast
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- Overall vehicle sales continue to grow
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- Figure 7: Total US unit sales and fan chart forecast of new and used light vehicles, at current prices, 2013-23
- Figure 8: Total US unit sales and forecast of new and used light vehicles, 2013-23
Market Breakdown
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- Used vehicle sales account for over two thirds of total vehicle sales
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- Figure 9: Total US unit sales and fan chart forecast of used cars and light trucks, at current prices, 2013-23
- Light trucks continue to gain market share over passenger cars through 2018
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- Figure 10: New vehicle sales, by vehicle class, January 2018-May 2018
Market Factors
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- Interest rates set to increase multiple times in 2018
- Gas prices creep closer to $3.00 per gallon
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- Figure 11: US gasoline and diesel retail prices, January 2007-May 2018
- Low unemployment paired with high consumer confidence
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- Figure 12: Consumer confidence and unemployment, 2000-April 2018
Key Players – What You Need to Know
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- CarGurus sent an estimated 2 billion emails in 2017
- Toyota has largest online ad presence among auto brands
- Carvana scales up but sees increasing losses
- Vehicle subscription services emerge as alternative to vehicle ownership
What’s Working?
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- CarGurus leads third-party sites in email marketing volume
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- Figure 13: Third-party automotive site email marketing performance, 2017
- Toyota leads manufacturers in online ad spend for 2017
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- Figure 14: Top 25 online ad spend, by auto brands, 2017
What’s Struggling?
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- Carvana’s losses pile on as it scales its business
- Vroom lays off staff, halts operations in two locations
What’s Next?
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- Subscription services provides new model for vehicle access
- Book by Cadillac
- Care by Volvo
- Porsche Passport
- Ford Canvas
- Flexdrive
The Consumer – What You Need to Know
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- Parents and Millennials show high immediate purchase intent
- Car shoppers aspire to purchase new over used
- Body style decided before branding in consumer journey
- Car shoppers agree the process is stressful
- Women more likely to consult outside help in shopping process
Purchase Intent
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- Consumer purchase intent remains stable
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- Figure 15: Purchase intent, March 2018
- Figure 16: Purchase intent, July 2016-March 2018
- Parents with one or two children have high immediate purchase intent
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- Figure 17: Number of children in the household, by vehicle purchase intent, March 2018
- Major life events also a primary driver behind a new vehicle purchase
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- Figure 18: Purchase intent, by major life events, March 2018
- Millennials show highest purchase intent among generations
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- Figure 19: Purchase intent, by generation, March 2018
Purchase Type
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- Majority of car shoppers considering buying new
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- Figure 20: Purchase type, March 2018
- Household income strong determinant of purchase type
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- Figure 21: Purchase type, by household income, March 2018
- Used vehicle consideration increases closer to purchase decision
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- Figure 22: Purchase type, by purchase intent, March 2018
Trade-in Intent
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- Nearly two thirds of car owners plan to trade in their vehicle
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- Figure 23: Trade-in intent, March 2018
- Two-vehicle households most likely to plan to trade in
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- Figure 24: Trade-in intent, by household vehicles, March 2018
- Shoppers planning a trade-in are more likely to consider a new vehicle
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- Figure 25: Purchase type, by trade-in intent, March 2018
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- Figure 26: Mike Reed Chevrolet, retention email, May 2018
- Figure 27: Huston Chevrolet, direct mail, April 2018
Pre-purchase Decisions
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- Body style takes precedence over branding in decision process
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- Figure 28: Pre-purchase decisions, March 2018
- Older shoppers are more decisive when it comes to their next vehicle
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- Figure 29: Pre-purchase decisions, by age, March 2018
- Men more likely than women to know the brand of the next purchase
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- Figure 30: Pre-purchase decisions, by gender, March 2018
- Parents, especially moms, set monthly budgets
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- Figure 31: Pre-purchase decisions, by parental status, March 2018
- Figure 32: Pre-purchase decisions, by parental status by gender, March 2018
- Purchase location undetermined even late in car purchasing process
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- Figure 33: Pre-purchase decisions, by plan to purchase next vehicle, March 2018
Research Topics
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- Fuel efficiency tops consumer research topics
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- Figure 34: Research topics, March 2018
- Women and older men interested in safety features
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- Figure 35: Research topics, by age and gender, March 2018
- Those interested in cargo features likely know the body style of their next vehicle
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- Figure 36: Pre-purchase decisions, by research topics, March 2018
- Research Topics TURF Analysis
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- Figure 37: TURF analysis – Vehicle research, March 2018
Research Methods
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- Test drives remain the primary research method
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- Figure 38: Research methods, March 2018
- Women more likely than men to consult outside help
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- Figure 39: Research methods, by gender and age, March 2018
- Positive online reputation will help win Millennials
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- Figure 40: Research methods, by generation, March 2018
Vehicle Uses
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- Driving for commute, pleasure, and vacations top vehicle usage plans
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- Figure 41: Vehicle uses, March 2018
- More than a tenth of Millennials and iGens look to drive for a ride share service
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- Figure 42: Vehicle uses, by generation, March 2018
Attitudes toward Car Purchasing
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- Car shopping process leaves a lot to be desired
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- Figure 43: Attitudes toward car purchasing, part 1, March 2018
- Nearly half of car shoppers find salespeople untrustworthy
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- Figure 44: Attitudes toward car purchasing, part 2, March 2018
- Consumer mistrust increases closer to purchase point
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- Figure 45: Attitudes toward car purchasing, by purchase intent, March 2018
- Millennials most receptive to alternative car buying experiences
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- Figure 46: Attitudes toward car purchasing, by generation, March 2018
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- Figure 47: Attitudes toward car purchasing, by generation, March 2018
Cluster Analysis
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- Figure 48: Cluster analysis of attitudes toward car purchasing, March 2018
- Confident Shoppers
- Characteristics
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- Figure 49: Pre-purchase decisions, by cluster groups, March 2018
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- Figure 50: Profile of Confident Shoppers, March 2018
- Opportunities
- Alternative Shoppers
- Characteristics
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- Figure 51: Attitudes toward car purchasing, by cluster groups, March 2018
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- Figure 52: Profile of Alternative Shoppers, March 2018
- Opportunities
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- Figure 53: Attitudes toward car purchasing, by cluster groups, March 2018
- Figure 54: Purchase intent, by cluster groups, March 2018
- Cost-focused Shoppers
- Characteristics
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- Figure 55: Profile of Cost-focused Shoppers, March 2018
- Opportunities
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- Figure 56: Pre-purchase decisions, by cluster groups, March 2018
- Ambivalent Shoppers
- Characteristics
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- Figure 57: Profile of Ambivalent Shoppers, March 2018
- Opportunities
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Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 58: US new vehicle sales, by brand, 2017
- Figure 59: New vehicle US sales and forecast, 2013-23
- Figure 60: Total new vehicle US sales and fan chart forecast, 2013-23
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