Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
- The issues
- Sales face headwinds, stagnating growth
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- Figure 1: Total US unit sales and fan chart forecast of new passenger cars and new light trucks, 2013-23
- Abandon car! Shoppers flee to crossover/SUV category
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- Figure 2: Passenger car and light truck sales as a percentage of the market, 2014-18*
- Dealerships need to differentiate themselves among younger shoppers
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- Figure 3: Attitudes toward new vehicles, by age, April 2018
- The opportunities
- New vehicle purchase consideration remains high
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- Figure 4: Purchase type, April 2018
- Repairs, technology, and perks can convert used car shoppers
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- Figure 5: New vehicle factors, by purchase type, April 2018
- Millennials remain dominant car-buying demographic
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- Figure 6: Purchase intent, by generation, April 2018
- What it means
The Market – What You Need to Know
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- New vehicle sales stable but flat for near future
- Crossovers sap sales from passenger car segment
- Rising interest rates will increase costs for shoppers
- Trade disputes could turn on hazard lights for the auto industry
- Mobility services provide consumers options besides a personal vehicle
Market Size and Forecast
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- New vehicle sales stagnant for near future
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- Figure 7: Total US unit sales and fan chart forecast of new passenger cars and new light trucks, 2013-23
- Figure 8: Total US unit sales and fan chart forecast of new passenger cars and new light trucks, 2013-23
Market Breakdown
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- Crossovers and SUVs drawing shoppers away from sedans and coupes
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- Figure 9: Passenger car and light truck sales as a percentage of the market, 2014-18*
- Leasing penetration drops slightly year over year
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- Figure 10: Leasing as a percentage of new vehicle sales, Q1 2017-Q1 2018
Market Perspective
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- Emerging mobility options may inhibit new vehicle purchases
- Subscription services provide a flexible alternative to vehicle ownership
Market Factors
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- Increasing interest rates increase borrowing costs for car shoppers
- Improving credit scores show higher quality shoppers are in the market
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- Figure 11: Average Q1 new credit scores, 2014-18
- Figure 12: Credit score change in past year, May 2018
- Gas prices close to $3 per gallon
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- Figure 13: US gasoline and diesel retail prices, January 2007-July 2018
- Trade disputes cause uncertainty in the market
Key Players – What You Need to Know
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- Toyota jumps Chevy for second spot
- Ford remains the top brand in the US
- JoyDrive brings the new car buying process online
New Vehicle Sales by Brand
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- Ford tops US sales as a brand, GM tops US sales as manufacturer
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- Figure 14: New vehicle sales, by brand, 2016-17
- Figure 15: New vehicle sales, by manufacturer, 2016-17
What’s Working?
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- Crossovers dominate sales landscape
- Ford top US brand on strength of F-Series
- Toyota grows to take second sales position
What’s Struggling?
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- Passenger car sales suffer amid crossover craze
What’s Next?
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- JoyDrive brings the new car buying experience online
- Ford bringing back the Bronco and Ranger
- Brands planning wave of electrified models
The Consumer – What You Need to Know
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- New purchase consideration remains high
- Millennials driving force behind new vehicle purchases
- Reliability is the most appealing factor behind buying new
- Younger shoppers less likely to differentiate dealerships
Vehicles in the Household & Purchase Intent
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- Vehicle ownership remains ubiquitous in US
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- Figure 16: Number of vehicles in the household, April 2018
- Sedans found in more than half of US households
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- Figure 17: Types of vehicles in the household, April 2018
- Rural residents nearly twice as likely to have a pickup truck
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- Figure 18: Types of vehicles in the household, by area, April 2018
- Consumer lifestyles determine the types of cars in the household
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- Figure 19: Types of vehicles in the household, by recreational item ownership, April 2018
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- Figure 20: Toyota Tundra online mobile ad, March 2018
Purchase Intent
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- More than half of consumers plan on buying within three years
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- Figure 21: Purchase intent, April 2018
- Consumer purchase intent remains steady
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- Figure 22: Purchase intent, July 2016-April 2018
- Major life events accelerate purchase intent
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- Figure 23: Purchase intent, by major life events, April 2018
- Millennials are the dominant car buying generation
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- Figure 24: Purchase intent, by generation, April 2018
- English-speaking Hispanic Millennials show highest immediate intent
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- Figure 25: Purchase intent, by Hispanic origin and generation, April 2018
- Fathers plan further ahead for the next household vehicle
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- Figure 26: Purchase intent, by gender and parental status, April 2018
Next Vehicle Purchase
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- New vs used
- Car shoppers aspire to purchase their next car new
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- Figure 27: Purchase type, April 2018
- Household income is the main factor behind new vs used decision
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- Figure 28: Purchase type, by household income, April 2018
- Vehicle types considered
- Consideration between sedans and SUVs nearly level
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- Figure 29: Vehicle types considered, April 2018
- Shoppers are more likely to return to the same vehicle category
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- Figure 30: Vehicle types considered, by types of vehicles in the household, April 2018
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- Figure 31: Ford Lauderdale Nissan buy back direct email, August 2018
- Vehicle Replacement Plans
- Nearly 80% of car shoppers plan to replace a current vehicle in the household
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- Figure 32: Vehicle replacement plan, April 2018
- Majority of shoppers replacing a vehicle plan to trade in a current one
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- Figure 33: Replacement reasons, April 2018
- More than a quarter of households with teenagers look to add a car
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- Figure 34: Chevrolet eNewsletter email, August 2018
- Figure 35: Vehicle replacement plan, by presence of children by age in the household, April 2018
- Younger shoppers more likely to get a car for themselves
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- Figure 36: Vehicle replacement plans, by age, April 2018
- Figure 37: Purchase type, by replacement vehicle plans, April 2018
- Payment plans
- One in 10 shoppers plan on leasing their next vehicle
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- Figure 38: Payment plan, April 2018
- Figure 39: Payment plan, by household income, April 2018
- Half of shoppers planning to lease have a lease about to end
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- Figure 40: Replacement reasons, by payment plan, April 2018
New Vehicle Factors
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- Car shoppers like the reliability a new vehicle brings
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- Figure 41: New vehicle factors, April 2018
- Dealership perks could convince used car shoppers to go new
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- Figure 42: New vehicle factors, by purchase type, April 2018
- Reliability and new vehicle warranty appealing to eight in 10 new car shoppers
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- Figure 43: TURF analysis – New car attributes, April 2018
Brands Considered
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- Toyota top brand considered among new car shoppers
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- Figure 44: Brands considered for new, April 2018
- Jeep over indexes among younger car shoppers
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- Figure 45: Brands considered for new, April 2018
Attitudes toward New Cars
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- Research is an important part of the consumer purchasing process
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- Figure 46: Attitudes toward new vehicles, part 1, April 2018
- Half agree “made in America” is “American” regardless of the brand
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- Figure 47: Attitudes toward new vehicles, part 2, April 2018
- Younger shoppers less likely to differentiate dealerships of the same brand
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- Figure 48: Attitudes toward new vehicles, by age, April 2018
- Parents more willing to pay new car prices
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- Figure 49: Attitudes toward new cars, by parental status, April 2018
Cluster Analysis
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- Figure 50: Cluster groups, April 2018
- City Shoppers
- Characteristics
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- Figure 51: Profile of City Shoppers, April 2018
- Opportunities
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- Figure 52: Purchase intent, by cluster groups, April 2018
- Figure 53: Purchase type, by cluster groups, April 2018
- Budget GenXers
- Characteristics
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- Figure 54: Profile of Budget GenXers, April 2018
- Opportunities
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- Figure 55: Brands considered, by cluster groups, April 2018
- Empty Suburbanesters
- Characteristics
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- Figure 56: Attitudes toward new cars, by cluster groups, April 2018
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- Figure 57: Profile of Empty Suburbanesters, April 2018
- Opportunities
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- Figure 58: Vehicle types considered, by cluster groups, April 2018
- Figure 59: Brands considered, by cluster groups, April 2018
- Rural Retirees
- Characteristics
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- Figure 60: Profile of Rural Retirees, April 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
TURF Analysis
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- Methodology
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