Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- U.S. unit car sales increased in 2010 for the first time since 2000
- Mintel forecasts that dealership sales will likely increase 21% in 2010
- Dealerships are shrinking, especially among those selling less inventory
- The average U.S. dealership sold 10% fewer vehicles in 2009
- New vehicle registrations dropped 33% in 2009 from previous year
- Consumers are holding onto cars longer, creating pent-up demand for new
- Spouse or partners help influence car buying
- Test drives are more important than ever in determining buying
- A third of respondents purchased new since recession
- Average spend on new vehicles: $27K
- Midsize sedans, small cars purchased during recession
- Consumers may still be hesitant to purchase new following recession
- Two thirds of respondents connect domestic cars with U.S. economy
Insights and Opportunities
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- Dealerships should offer prepaid gift cards as a brand marketing tool
- Dealerships should take advantage of Cyber Monday promotions
- Integrate technology integration more seamlessly into sales platform
- Develop buyer relationships that are designed for the long, not short term
Inspire Insights
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- Trend: Simplicity and Convenience
- Dealerships will benefit by allowing convenience to start from home
Market Size and Forecast
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- Key points
- U.S. sales reach 11.6 million units, the first year-to-year increase since 2000
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- Figure 1: Total U.S. vehicle sales, by units, 2005-10
- Dealership revenues plummeted 17% in 2008 but recovery started in 2010
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- Figure 2: Total sales at new car dealerships, at current prices, 2005-10
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- Figure 3: Total sales at new car dealerships, at inflation-adjusted prices, 2005-10
Market Drivers
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- New vehicle registrations dropped 33% in 2009 from previous year
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- Figure 4: Total number of U.S. motor vehicles in use, new vehicle registrations, scrappage and licensed drivers, 1991-2009
- Consumers are holding onto cars longer, creating pent-up demand for new
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- Figure 5: Median age of automobiles and light trucks in operation in the U.S., 1990-2008
- Cut-rate financing, shorter loan terms trending to help generate sales
- Persistent unemployment drives consumers to consider low financing
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- Figure 6: U.S. unemployment rate, by month, July 2008-October 2010
- Disposable income remains limited in many households
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- Figure 7: Real disposable personal income, January 2007-January 2010
- Consumer debt declining in 2010
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- Figure 8: Consumer debt, Q1 1999-Q1 2010
New Car Dealerships
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- Key points
- Total U.S. new car dealerships fall 11% between 2008 and 2010
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- Figure 9: Number of dealerships selling new cars, 1990-2010
- Total number of new car franchises drop 9% between 2009 and 2010
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- Figure 10: Number of car and light truck franchises in the U.S., 2009 and 2010
- California boasts the highest number of new car dealerships
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- Figure 11: Number of new car dealerships, by state, 2010
- The average U.S. dealership sold 10% fewer vehicles in 2009
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- Figure 12: Number of new vehicles sold and average selling price, 1997-2009
Top U.S. Dealership Groups
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- Key points
- AutoNation
- Penske Automotive Group
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- Figure 13: Top 20 dealership groups in the U.S., by the total number of new vehicle units, 2009
Online Car Buying
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- Key points
- The internet now an essential element of the car-buying process
- eBay Motors aiming to increase new vehicle inventory
- Industry still experimenting with selling new vehicles online
- GM tried but failed in partnership with eBay Motors
- Ford taking online sales to the UK
- AutoNation expanding online effort in three states
- Kia partners with eBay in the attempt to increase U.S. brand awareness
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- Figure 14: Kia Motors/eBay Motors ad, November 2010
- Volkswagen raising Jetta profile through luxury goods retailer promotion
Dealership Qualities
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- Kentucky Toyota-Scion dealership creates community destination
- Dealership uses naming rights of city park to bring vehicles to people
Innovation and Innovators
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- Phone app allows users to connect with automaker before, after purchase
- Ford steers test drives of new F-150 pick-up to buyer homes
- Corvette enthusiasts enticed by opportunity to participate in engine build
- Nissan invites ‘Mommy Bloggers’ to test drive updated minivan
- Partnership with truck company brings messaging to the streets
Marketing Strategies
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- Strategy: Test drives as a VIP exclusive event
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- Figure 15: West Herr Ford direct mail ad, 2011
- Strategy: Turning the test drive experience into a family event
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- Figure 16: General Motors Mark of Excellence Test Drive Experience direct mail ad, 2011
- Strategy: Marketing trade-in process as upgrading your lifestyle
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- Figure 17: General Motors Mark of Excellence Test Drive Experience direct mail ad, 2011
- Ford shows how swapping your ride can help you in the long run
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- Figure 18: Ford ad, 2011
- Chevrolet suggests consumers “switch” to their vehicles
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- Figure 19: Chevrolet ad, 2011
- Strategy: Providing all the information buyers need at their fingertips
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- Figure 20: Bankston Ford ad, 2011
Participation in New Vehicle Purchasing
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- Key points
- A third of respondents purchased new over the last three years
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- Figure 21: Participation in new vehicle purchasing, by gender, age, household income and race and Hispanic origin, September-October 2010
When New Vehicle Purchasing Took Place
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- Key points
- Recession incentives motivated car buying during troubled times
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- Figure 22: When last new vehicle was bought, in past 3 years, by gender, September-October 2010
- Recession purchasing highest among middle-aged consumers
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- Figure 23: When last new vehicle was bought, in past 3 years, by age, September-October 2010
Future New Vehicle Purchasing
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- Key points
- Consumers may still be hesitant to purchase new following recession
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- Figure 24: When next vehicle purchase is planned, by gender, April-June 2010
- Those aged 18-24 are most likely to purchase within the year
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- Figure 25: When next vehicle purchase is planned, by age, April-June 2010
- Higher-income households most likely to purchase within the year
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- Figure 26: When next vehicle purchase is planned, by household income, April-June 2010
Amount Spent On New Vehicle Purchase or Lease
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- Key points
- Respondents spending an average of $27K on new vehicles
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- Figure 27: Amount spent on most recent vehicle purchase/lease, by gender, April-June 2010
Type of New Vehicle Purchased
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- Key points
- Midsize sedans and small cars bought during recession
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- Figure 28: Type of new vehicle purchased, by gender, September-October 2010
- Those aged 25-34 purchased SUVs more than older peers
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- Figure 29: Type of new vehicle purchased, by age, September-October 2010
- Crossover SUVs allowing taste of luxury for middle-income households
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- Figure 30: Type of new vehicle purchased, by household income, September-October 2010
Where New Vehicles Are Purchased
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- Key points
- Brand dealerships dominating outlet where respondents purchased new
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- Figure 31: Where new vehicles are purchased, by gender, September-October 2010
- Dealership groups rated highest among those aged 25-34
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- Figure 32: Where new vehicles are purchased, by age, September-October 2010
- Dealership groups rated highest by those from lowest-earning households
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- Figure 33: Where new vehicles are purchased, by household income, September-October 2010
How New Vehicles Are Researched
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- Key points
- Automaker sites first stop for respondents in researching vehicles
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- Figure 34: Where new vehicles are researched, by gender, September-October 2010
- Under-45s rate automaker websites higher than older peers
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- Figure 35: Where new vehicles are researched, by age, September-October 2010
- Respondents from higher-income households researching more
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- Figure 36: Where new vehicles are researched, by household income, September-October 2010
Who Influences New Vehicle Purchase
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- Key points
- Majority of purchase decisions made with help from spouse or partner
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- Figure 37: Who influences new vehicle purchases, by gender, September-October 2010
- Respondents aged 25-34 more influenced by friends than older age groups
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- Figure 38: Who influences new vehicle purchases, by age, September-October 2010
- Children most influential in $100K+ households
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- Figure 39: Who influences new vehicle purchases, by household income, September-October 2010
What Influences New Vehicle Purchase
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- Key points
- Test drives dominating influence for respondents when purchasing car
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- Figure 40: What influences new vehicle purchases, by gender, September-October 2010
- Test drives rated highest by those aged 25-44
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- Figure 41: What influences new vehicle purchases, by age, September-October 2010
- Higher-income households interested in test drives
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- Figure 42: What influences new vehicle purchases, by household income, September-October 2010
Attitudes Toward Trade-In Process
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- Key points
- Female respondents feel less satisfied regarding trade-in price than men
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- Figure 43: Attitudes towards trade-in process, by gender, September-October 2010
- 25-34 year olds most likely to feel ‘ripped off’
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- Figure 44: Attitudes towards trade-in process, by age, September-October 2010
Attitudes Toward New Car Purchasing
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- Key points
- Two thirds of respondents connect domestic cars with U.S. economy
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- Figure 45: Consumer attitudes towards new car purchasing, by gender, September-October 2010
- 25-34 year olds most likely to purchase to ditch clunker costs
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- Figure 46: Consumer attitudes towards new car purchasing, by age, September-October 2010
Impact of Race and Hispanic Origin
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- Key points
- White respondents purchasing SUVs more than Hispanics
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- Figure 47: Type of new vehicle purchased—white vs. Hispanic, September-October 2010
- Asian respondents most likely to purchase new within the single year
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- Figure 48: When consumers plan to make their next vehicle purchase, by race and Hispanic origin, April-June 2010
- Neighborhood lots used more by Hispanic respondents than by whites
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- Figure 49: Where new vehicles are purchased—white vs. Hispanic, September-October 2010
- Hispanics less inclined to use automaker sites than whites
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- Figure 50: Where new vehicles are researched—white vs. Hispanic, September-October 2010
- White respondents more likely to seek advice from spouse or partner
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- Figure 51: Who influences new vehicle purchases—white vs. Hispanic, September-October 2010
- White respondents more likely than Hispanics to be influenced by test drives
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- Figure 52: What influences new vehicle purchases—white vs. Hispanic, September-October 2010
- Hybrid technology more essential for Hispanic respondents than whites
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- Figure 53: Consumer attitudes towards new car purchasing—white vs. Hispanic, September-October 2010
Cluster Analysis
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- Brandies
- Demographics
- Characteristics
- Opportunity
- Improvisers
- Demographics
- Characteristics
- Opportunity
- Indies
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 54: Car buying clusters, September-October 2010
- Figure 55: Type of vehicle consumers purchase, by car buying clusters, September-October 2010
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- Figure 56: How consumers research car buying, by car buying clusters, September-October 2010
- Figure 57: Factors that influence vehicle purchasing, by car buying clusters, September-October 2010
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- Figure 58: Attitudes towards car buying, by car buying clusters, September-October 2010
- Cluster demographics
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- Figure 59: Car buying clusters, by gender, September-October 2010
- Figure 60: Car buying clusters, by age, September-October 2010
- Figure 61: Car buying clusters, by household income, September-October 2010
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- Figure 62: Car buying clusters, by race, September-October 2010
- Figure 63: Car buying clusters, by Hispanic origin, September-October 2010
- Cluster methodology
Appendix: Other Useful Consumer Tables
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- Participation in new vehicle purchasing and household income
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- Figure 64: Participation in new vehicle purchasing, by household income, September-October 2010
- Attitudes towards new car purchasing and household income
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- Figure 65: Consumer attitudes towards new car purchasing, by household income, September-October 2010
- Participation in new vehicle purchasing by race and Hispanic origin
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- Figure 66: Participation in new vehicle purchasing, by race and Hispanic origin, September-October 2010
- Attitudes towards trade-in process by race and Hispanic origin
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- Figure 67: Attitudes towards trade-in process, by race and Hispanic origin, September-October 2010
Appendix: Trade Associations
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