Table of Contents
Introduction and Abbreviations
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- Introduction
- Other relevant reports
- Definition
- Abbreviations & terms
- Abbreviations
- Terms
Executive Summary
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- Average U.S. household owns 2.2 vehicles
- More registered vehicles than licensed drivers
- Income
- Internet breeds empowered consumers
- Transparent marketplace gives buyers a perceived advantage
- Rise of the no-haggle sales strategy
- Auto industry spends big on advertising, shifts some spending toward non-traditional techniques
- Targeting Echo Boomers
- Employee pricing and other incentives drive sales, train buyers to be price-sensitive
- Extended warranties promote quality, drive sales
- Reasons for buying a vehicle
- Younger car owners more influenced by financing offers
- Shopping across multiple segments, makes and nameplates
- Foreign or domestic?
- Sources of information
- No-haggle sales experience preferred
- Good idea to shop around
Market Background
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- Introduction
- U.S. sales history and trends
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- Figure 1: Total U.S. value sales of automobiles, at current and constant prices, 1999-2004
- Figure 2: Graph: Total U.S. value sales of automobiles, at current and constant prices, 1999-2004
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- Figure 3: Total U.S. new and used unit sales, 1999-2004
- Figure 4: Graph: Total U.S. new and used unit sales, 1999-2004
- Figure 5: Graph: Total U.S. new and used unit sales and new lease originations, 1999-2004
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- Figure 6: Volume sales of all cars, by new and used, 2002 & 2004
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- Figure 7: Total U.S. new and used value sales, 1999-2004
- Figure 8: Value sales of all cars, by new and used, 2002 & 2004
- Average price of new and used vehicles
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- Figure 9: Average price of new and used vehicles, 1999-2004
- Figure 10: Graph: Average price of new and used vehicles, 1999-2004
- Manufacturer certified pre-owned vehicles
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- Figure 11: Total U.S. number of manufacturer certified used unit sales, 2001-2004
- Used casual (private party) sales
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- Figure 12: Total U.S. number of used casual sales, 1999-2004
- Figure 13: Total U.S. value of used casual sales, 1999-2004
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- Figure 14: Average price of used-casual vehicles, 1999-2004
- Leasing trends
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- Figure 15: Total U.S. number of new retail leases written, 1999-2004
- Number of nameplates on the rise
- Type and number of vehicles owned
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- Figure 16: Type and number of vehicles owned/leased, January-September 2004
- Type of car driven most often and how long owned
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- Figure 17: Type of vehicle driven most often, June 2005
- Duration of ownership
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- Figure 18: How long type of vehicle driven most often has been owned, June 2005
- Scrappage rates
Market Drivers
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- Demographics
- Age
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- Figure 19: American population projections, by age, 2000-2010
- Number of licensed drivers
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- Figure 20: Number of licensed drivers, by age and gender, 2000
- Vehicle ownership by age
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- Figure 21: Type and number of vehicles owned/leased, by age, January-September 2004
- Type of primary vehicle driven, by age
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- Figure 22: Type of vehicle driven most often, June 2005
- Younger Americans see cars as a means of self-expression
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- Figure 23: Attitudes about car’s appearance, by age, January-September 2004
- Economic conditions
- Rise in energy costs slows sales of used vehicles
- Income
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- Figure 24: Number of households per income group, 2000 and 2003
- Median household income
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- Figure 25: Median household income, 1990-2003
- Figure 26: Graph: Median household income, 1990-2003
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- Figure 27: Median household income, by age of householder, 2003
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- Figure 28: Type and number of vehicles owned/leased, by household income, January-September 2004
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- Figure 29: Type of vehicle driven most often, by household income, June 2005
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- Figure 30: How long type of vehicle driven most often has been owned, by income, June 2005
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- Figure 31: Type of vehicle driven most often, by household size, June 2005
- Figure 32: Graph: Type of vehicle driven most often, by household size, June 2005
- Race/ethnicity
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- Figure 33: U.S. population, by race and Hispanic origin, 2000-2010
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- Figure 34: Type and number of vehicles owned/leased, by race/ethnicity, January-September 2004
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- Figure 35: Ownership of loan products, spring 2004
- The Internet breeds empowered consumers
- Broadband penetration
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- Figure 36: U.S. broadband household projections, 2000-2010
- The role of the Internet in the car-buying process
- Customer segmentation informs site design
- The role of third party and branded sites
Advertising and Promotion
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- Introduction
- Traditional media
- Measured spending
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- Figure 37: Automakers’ measured U.S. new- and pre-owned- vehicle ad spend, 2003-2004
- Trends
- Non-traditional advertising and promotion heat up
- Mobile marketing begins to grow
- Ford launches product placement blitz on TV shows and video games
- Targeting Echo Boomers and the need to be unique (Scion/Toyota)
- Other automakers targeting Echo Boomers
- More migration to face-to-face marketing
- VW: co-branding lifestyles
- Reaching out to Hispanic consumers
- Pay less now…
- …or pay less later
- Dealers need to differentiate themselves
- Incentives
- New-vehicle shoppers reject newly launched models due to lack of incentives
- Increased shopping across multiple segments, concern over gas mileage hurt SUV sales
- Extended warranties promote quality, drive sales
- Discounts spur short-term sales; quality drives long-term satisfaction
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- Figure 38: American Customer Satisfaction Index, April 1-June 30, 2005
- Customer Relationship Management
- OEMs and dealers lack coordination
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- Figure 39: Comparison of exclusive dealerships and multiple nameplate dealerships in the U.S., April 2005
- Figure 40: Graph: exclusive dealerships in the U.S., April 2005
Retailing Trends
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- Introduction
- Trends
- The growing influence of the Internet: price transparency, consumer control
- Rise of the no-haggle sales strategy
- OEMs try to gain more control over dealers
- Dealer consolidation
- Dealer profiles
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- Figure 41: Revenue for leading retailers of cars and light trucks, 2002-2004
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- Figure 42: Retail sales units for leading retailers of cars and light trucks, 2002-2004
- AutoNation
- United AutoGroup
- Sonic Automotive
- VT Inc.
- Group 1 Automotive
- Asbury Automotive
- Hendrick Automotive
- Lithia Motors
- Staluppi
- Bill Heard Enterprises
- CarMax
- Online referral services and classifieds
- Autoshopper.com
- Autobytel.com
- CarsDirect.com
- Cars.com
- Autotrader.com
The Automobile Consumer
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- Introduction
- Exploration of the “Purchase Funnel”
- Awareness of need
- Reason for getting a new or used vehicle
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- Figure 43: Reason(s) for purchasing primary vehicle, June 2005
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- Figure 44: Reason(s) for purchasing primary vehicle, by type of primary vehicle, June 2005
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- Figure 45: Reason(s) for purchasing primary vehicle, by how long the vehicle has been owned, June 2005
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- Figure 46: Reason(s) for purchasing primary vehicle, by age, June 2005
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- Figure 47: Reason(s) for purchasing primary vehicle, by income, June 2005
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- Figure 48: Reason(s) for purchasing primary vehicle, by household size, June 2005
- Factors and influences on purchase decision
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- Figure 49: Factors and influences on vehicle purchase decision, June 2005
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- Figure 50: Factors and influences on vehicle purchase decision, by type of vehicle, June 2005
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- Figure 51: Factors and influences on vehicle purchase decision, by age, June 2005
- Foreign vs domestic cars
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- Figure 52: Preference for foreign or domestic brands, June 2005
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- Figure 53: Preference for foreign or domestic brands, by age, June 2005
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- Figure 54: Preference for foreign or domestic brands, by income, June 2005
- Opinions about foreign vs. domestic
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- Figure 55: Attitudes about foreign and domestic cars, by age, January-September 2004
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- Figure 56: Attitudes about foreign and domestic cars, by race/ethnicity, January-September 2004
- Information Processing
- Amount of time spent researching vehicle purchase and sources of information
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- Figure 57: Amount of time spent researching prior to purchase, June 2005
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- Figure 58: Amount of time spent researching prior to purchase, by age, June 2005
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- Figure 59: Amount of time spent researching prior to purchase, by income, June 2005
- Sources of information
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- Figure 60: Sources of information on vehicle purchase, June 2005
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- Figure 61: Sources of information on vehicle purchase, by type of primary vehicle, June 2005
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- Figure 62: Sources of information on vehicle purchase, by how long the vehicle has been owned, June 2005
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- Figure 63: Sources of information on vehicle purchase, by gender, June 2005
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- Figure 64: Sources of information on vehicle purchase, by age, June 2005
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- Figure 65: Sources of information on vehicle purchase, by income, June 2005
- Information sources for new, used and leased car buyers
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- Figure 66: Sources of information, new and used car buyers, January-September 2004
- Purchase phase
- Opinions about dealerships and the retail experience
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- Figure 67: Opinions about dealerships and sales staff, June 2005
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- Figure 68: Opinions about dealerships and sales staff, by type of primary vehicle, June 2005
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- Figure 69: Opinions about dealerships and sales staff, by how long the vehicle has been owned, June 2005
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- Figure 70: Opinions about dealerships and sales staff, by age, June 2005
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- Figure 71: Opinions about dealerships and sales staff, by region, June 2005
- Who comes along to shop and buy?
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- Figure 72: Companion for vehicle shopping and purchasing, by age, June 2005
- Financing method
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- Figure 73: Method of financing for most recently-acquired vehicle, by age, January-September 2004
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- Figure 74: Cash, dealer finance or bank loan method of financing for most recently-acquired vehicle, by household size and income, January-September 2004
- Post-purchase evaluation
- Post-purchase communications from dealer and car maker
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- Figure 75: Companion for vehicle shopping and purchasing, June 2005
Appendix: Trade Associations
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