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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- The market
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- Figure 1: U.S. unit sales of new vs. used vehicles, 2007-12
- Market factors
- Release of pent-up demand creates short-term boost in new car sales
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- Figure 2: Total new vehicles sold, new cars vs. light trucks, 2007-12
- Aging US car parc will impact sales of new and used cars
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- Figure 3: Average age of cars, light trucks and total light vehicles, 1995-2011
- Total U.S. new car dealership network grows for first time in seven years
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- Figure 4: Number of dealerships selling new cars, 2003-12
- Key player
- Top 10 automakers account for 92% of 2012 new vehicle sales
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- Figure 5: Largest automotive original equipment manufacturers in the U.S., by new car market share, 2012
- CPO sales seen as important profit center for dealers and carmakers
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- Figure 6: Largest automotive certified pre-owned retailers in the U.S., by CPO market share, 2012
- The consumer
- The average shopper expects to spend five and a half weeks shopping
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- Figure 7: How much time expected to spend shopping for car, November 2012
- New car shoppers and used car shoppers expect to visit different online resources
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- Figure 8: Online sources expected to visit while car buying, by new/used (non-CPO)/CPO vehicle ownership, November 2012
- One in five Millennials expects to use a smartphone or tablet app the next time they shop for a car
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- Figure 9: Online sources expected to use while car buying, by generation, November 2012
- Two thirds of respondents say car buying is “stressful”
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- Figure 10: Car buying habits and sentiments, November 2012
- Minorities more interested in car dealers aesthetic and convenience features
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- Figure 11: Importance of selected dealership attributes and services, by race/Hispanic origin, November 2012
- What we think
Issues in the Market
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- Aging Baby Boomer population will change the car buying landscape
- Car dealerships almost universally distained by car buyers
Insights and Opportunities
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- Community car sharing could foster incremental sales for dealers and automakers
- Lessons from emerging economies and making car purchase an exercise in credit building
Trend Application
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- Trend: Totophobia
- Trend: Experience is All
- 2015 Trends
- Access Anything, Anywhere
Market Size
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- Key points
- U.S. vehicle sales reach 14.5 million units, the highest volumes since 2007
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- Figure 12: U.S. unit sales of new cars and light trucks, 2007-12
Market Segmentation
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- Key points
- New cars vs. trucks
- Passenger cars make up majority of light vehicle sales for first time since 2009
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- Figure 13: U.S. unit sales of new cars vs. light trucks, 2007-12
- Slow growth of crossovers and full-size pickup trucks diminish role of light trucks
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- Figure 14: U.S. unit sales of new light trucks, 2007-12
- Passenger car sales see strong gains as more buyers flock to midsize and compact cars
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- Figure 15: U.S. unit sales of new cars, 2007-12
- New vs. used
- New cars increase as a proportion of market as tight used car market creates pricing pressure
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- Figure 16: U.S. unit sales of new vs. used vehicles, 2007-12
- Figure 17: U.S. average vehicle selling price, 2006-11
- CPO sales seen as important profit generator for dealers and carmakers
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- Figure 18: U.S. unit sales of CPO vehicles, 2007-12
Market Drivers
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- Key points
- Improving macroeconomic conditions to positively impact auto sales
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- Figure 19: Average credit score of new vs. used car buyers, 2007-12
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- Figure 20: University of Michigan Consumer Sentiment, 2007-13
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- Figure 21: Housing Starts vs. Light truck sales, 2000-12
- Market uncertainty fuels pent-up demand
- Aging U.S. car parc provides challenges for new car sales growth
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- Figure 22: Average age of cars, light trucks and total light vehicles, 1995-2011
- Cash for Clunkers tightens supply of used vehicles
- Increased product cadence will boost new car demand
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- Figure 23: Average new car showroom age and replacement rate, 2007-16
- Higher taxes may impede short term growth of consumer spending
Competitive Context
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- Key points
- Declines in vehicle use
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- Figure 24: Consumer vehicle miles traveled, all U.S. roads and streets, 1998-2012
- Increased urbanization cuts into automobile dependency
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- Figure 25: Most often form of transit used for work commute, by type of metro area, 2009
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- Figure 26: Attitudes to transportation by type of commuter, 2009
- Car sharing a potential disruptive force to automobile ownership
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- Figure 27: Car use, by trip purpose, average distance and time, 2009
Leading Manufacturers
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- Key points
- Manufacturer overview
- Top 10 automakers account for 92% of 2012 vehicle sales and 93.4% of the new car dealers
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- Figure 28: Largest automotive original equipment manufacturers in the U.S., by new car market share, 2012
- A note on the manufacturer and dealers relationship
- Manufacturer profiles
- General Motors Company
- Overview
- Sales and market share
- Service, parts and CPO programs
- Innovation
- Captive lending
- Ford Motor Company
- Overview
- Sales and market share
- Service, parts and CPO programs
- Captive lending
- Toyota Motor Sales USA, Inc.
- Overview
- Sales and market share
- Service, parts and CPO programs
- Captive financing
- Environmentalism
- Chrysler Group, LLC
- Overview
- Sales and market share
- Service, parts and CPO programs
- Captive lending
- American Honda Motor Co. Inc.
- Overview
- Sales and market share
- Service, parts and CPO programs
- Commitment to American jobs
- Captive lending
- Nissan North America Inc.
- Overview
- Sales, service and market share
- Captive lending
Car Dealerships
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- Key points
- Dealership overview
- Auto retailing is a highly competitive and fragmented market
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- Figure 29: Top 20 dealership groups in the U.S., by total number of new vehicles sold, 2012
- Total U.S. new car dealership network grows for first time since 2005
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- Figure 30: Number of dealerships selling new cars, 2003-12
- Major dealership profiles
- CarMax
- AutoNation
- Sonic Automotive
Automotive Websites
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- Key points
- Automotive websites overview
- Vast majority expect to use the internet next time they shop for a car
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- Figure 31: Online sources expected to visit while car buying, by gender, November 2012
- One in five say internet is an important resource for deciding what car to purchase or lease
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- Figure 32: Sources of information used when buying a vehicle—purchased new, by education, April 2011-June 2012
- Third-party websites provide consumers a unified location for local new/used car inventory
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- Figure 33: New & Used vehicle buyers time spent online, by type of website, 2011
- Figure 34: Top 8 car buying websites, by unique visitors a month, May 2011-April 2012
- Major automotive website profiles
- AutoTrader.com
- Cars.com
- Edmunds.com
Innovations and Innovators
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- Tred.com aims to take the hassles out of test-driving
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- Figure 35: tred.com online teaser, January 2013
- CarWOO! helps truncate the car buying process through reverse dealer auctioning
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- Figure 36: CarWOO!’s homepage, January 2013
- Lincoln adds a personal touch through complimentary concierge service
Marketing Strategies
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- Key points
- Strategy: Use racing-, shooter-video games to promote vehicle launches
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- Figure 37: 2014 Chevrolet Corvette C7 in Gran Turismo 5
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- Figure 38: Jeep Tough Game, TV ad, November 2012
- Strategy: Use crowdsourcing to explore and develop unique vehicle features
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- Figure 39: Dodge Dart Registry
- Figure 40: Dodge how to change buying cars forever, TV ad, January 2013
- Strategy: Add a “human face” to automotive regional ads
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- Figure 41: Chevy Under the Blue Arch
- Figure 42: Chevy Under the Blue Arch Truck Month, TV ad, November 2012
- Strategy: Use visually interesting special effects to highlight new styling direction
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- Figure 43: Toyota Avalon New Formula, TV ad, January 2013
- Strategy: Emphasize a passion for cars as an expertise in car buying
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- Figure 44: edmunds.com ask the car people, TV ad, July 2012
- Strategy: Show new car shoppers that you’re listening to their complaints
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- Figure 45: Toyota RAV4 wish granted, TV ad, January, 2013
Vehicle ownership and spend
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- Key points
- Midsize cars and SUVs/CUVs most popular vehicle segments
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- Figure 46: Vehicle ownership, type of vehicle by new, used, leased, or CPO, November 2012
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- Figure 47: Vehicle ownership, type of vehicle, by age, November 2012
- Household ownership dominated by Chevrolet, Ford, Toyota, and Honda, but regional variances are prevalent
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- Figure 48: Make of vehicle owned in household, domestic vs. foreign, by region, April 2011-June 2012
- Average car purchase at $19,000
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- Figure 49: Amount spent on vehicle purchase – Most recently acquired, by age, April 2011-June 2012
- The average household owns about two cars
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- Figure 50: Number of vehicles owned in the household, by household income, April 2011-June 2012
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- Figure 51: Number of vehicles owned in the household, by household size, April 2011-June 2012
- Nearly a quarter of respondents expect to shop for a car within the next year
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- Figure 52: When will next vehicle be bought, by whether the most recently acquired vehicle in household is owned or leased, April 2011-June 2012
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- Figure 53: Expectations of major breakdown in the next 12 months, by whether the most recently acquired vehicle in household is owned or leased, April 2011-June 2012
Attitudes towards haggling for a car
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- Key points
- Younger households see greater benefit from haggling with dealership
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- Figure 54: Attitudes towards haggling on price for a car, by age, November 2012
- Necessity for haggling falls as income rises
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- Figure 55: Attitudes towards haggling on price for a car, by household income, November 2012
- Larger households, and households with young children see haggling as necessary and beneficial
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- Figure 56: Attitudes towards haggling on price for a car, by number of people in household, November 2012
- Figure 57: Attitudes towards haggling on price for a car, by presence of children in household, November 2012
Time expected to spend shopping for car
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- Key points
- Women expect to spend more time shopping for their next vehicle
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- Figure 58: Length of time expected to spend shopping for car, by gender, November 2012
- Higher income householders spend the longest time shopping for a car
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- Figure 59: Length of time expected to spend shopping for car, by household income, November 2012
- Younger and middle-aged respondents expect to spend the longest time shopping for their next car
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- Figure 60: Length of time expected to spend shopping for car, by age, November 2012
Online car shopping resources expected to visit
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- Key points
- Grouping classification
- Average consumer expects to visit three types of online resources the next time they car shop
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- Figure 61: Online sources expected to visit while car buying, by new/used/CPO vehicle ownership, November 2012
- More men than women plan to visit a classified ad website when they car shop
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- Figure 62: Online sources expected to visit while car buying, by gender, November 2012
- Car manufacturer and dealer websites more likely visited by those with higher incomes
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- Figure 63: Online sources expected to visit while car buying, by household income, November 2012
- Single person households visit more types of online resources
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- Figure 64: Online sources expected to visit while car buying, by marital/relationship status, November 2012
- One in five Millennials expect to use a smartphone or tablet app the next time they shop for a car
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- Figure 65: Online sources expected to visit while car buying, by generation, November 2012
- People who take longer to shop for a car more likely to visit auto sites
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- Figure 66: Online sources expected to visit while car buying, by length of time expected to spend shopping for car, November 2012
Dealership Features and Accommodations
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- Key points
- Younger consumers more interested in convenience features from car dealers
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- Figure 67: Importance of selected dealership attributes and services, by gender, November 2012
- Figure 68: Importance of selected dealership attributes and services, by gender and age, November 2012
- Top earners looking for exclusivity and style from car dealers
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- Figure 69: Importance of selected dealership attributes and services, by household income, November 2012
- Swing and WWII Generation more interested in dealers that are integral members of area community
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- Figure 70: Importance of selected dealership attributes and services, by generation, November 2012
- New car owners expected to be more loyal than used car owners
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- Figure 71: Importance of selected dealership attributes and services, by vehicle ownership, November 2012
Car buying habits and sentiments
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- Key points
- Grouping classification
- Most women say buying a car is “stressful”
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- Figure 72: Car buying habits and sentiments, by gender, November 2012
- Millennials see importance in researching not just vehicle models but car dealerships
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- Figure 73: Car buying habits and sentiments, by generation, November 2012
Impact of Race and Hispanic Origin
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- Key points
- Asian Americans disproportionately buy Japanese makes. Blacks prefer domestic makes
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- Figure 74: Make of vehicle owned in household, domestic vs. foreign, by race/Hispanic origin, April 2011-June 2012
- Blacks, Asian and Hispanics aged 35+ more likely to purchase vehicles costing $40K-49.9K
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- Figure 75: Amount spent on most recently acquired vehicle, by race/ethnicity and age, April 2011-June 2012
- Figure 76: Amount spent on most recently acquired vehicle, by Hispanic origin and age, April 2011-June 2012
- Hispanics and Asians most likely to view haggling as necessary and beneficial
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- Figure 77: Attitudes towards haggling on price for a car, by race/Hispanic origin, November 2012
- Minorities more interested in convenience features and financing options
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- Figure 78: Importance of selected dealership attributes and services, by race/Hispanic origin, November 2012
- Hispanic respondents worried about getting “ripped-off” by car dealers
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- Figure 79: Car buying habits and sentiments, by race/Hispanic origin, November 2012
Cluster Analysis
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- Loyal and Informed
- Demographics
- Characteristics
- Opportunity
- Frustrated and Lost
- Demographics
- Characteristics
- Opportunity
- Unstressed and Disengaged
- Demographics
- Characteristics
- Opportunity
- Environmental and Empowered
- Demographics
- Characteristics
- Opportunity
- Cluster characteristic pie graph
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- Figure 80: Target clusters, November 2012
- Figure 81: How much time expected to spend shopping for car, by target clusters, November 2012
- Figure 82: Online sources expected to visit while car buying, by target clusters, November 2012
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- Figure 83: Dealership features and accommodations that consumers want, by target clusters, November 2012
- Figure 84: Car buying habits and sentiments, by target clusters, November 2012
- Cluster demographic tables
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- Figure 85: Target clusters, by demographic, November 2012
- Cluster methodology
Appendix: Other Useful Consumer Tables
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- Vehicle ownership
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- Figure 86: Vehicle ownership, by household income, November 2012
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- Figure 87: Make of vehicle owned in household, domestic vs. foreign, by household income, April 2011-June 2012
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- Figure 88: Whether the vehicle in household is owned or leased—Most recently acquired, by race and household income, April 2011-June 2012
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- Figure 89: Whether the vehicle in household is owned or leased – Most recently acquired, by Hispanic origin and household income, April 2011-June 2012
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- Figure 90: Whether the vehicle in household is owned or leased—Most recently acquired, by education, April 2011-June 2012
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- Figure 91: Whether the vehicle in household is owned or leased—Most recently acquired, by region, April 2011-June 2012
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- Figure 92: Planned to buy next vehicle new or used, by whether the vehicle in household is owned or leased—Most recently acquired, April 2011-June 2012
- Primary sources of information used when buying a vehicle
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- Figure 93: Sources of information used when buying a vehicle—Purchased new, by education, April 2011-June 2012
- Online sources used when car buying
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- Figure 94: Online sources expected to visit while car buying, by gender, November 2012
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- Figure 95: Online sources expected to visit while car buying, by age, November 2012
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- Figure 96: Online sources expected to visit while car buying, by gender and marital status, November 2012
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- Figure 97: Online sources expected to visit while car buying, by education, November 2012
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- Figure 98: Online sources expected to visit while car buying, by attitudes towards haggling on price for a car, November 2012
- Time expected to spend shopping for car
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- Figure 99: How much time expected to spend shopping for car, by education, November 2012
- Attitudes towards haggling for a car
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- Figure 100: Attitudes towards haggling on price for a car, by generation, November 2012
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- Figure 101: Attitudes towards haggling on price for a car, by vehicle ownership, November 2012
- Attitudes to dealership features and accommodations
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- Figure 102: Importance of selected dealership attributes and services, November 2012
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- Figure 103: Importance of selected dealership attributes and services, by age, November 2012
- Car buying habits and sentiments
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- Figure 104: Car buying habits and sentiments, November 2012
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- Figure 105: Car buying habits and sentiments, by age, November 2012
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- Figure 106: Car buying habits and sentiments, by household income, November 2012
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- Figure 107: Car buying habits and sentiments, by online sources expected to visit while car buying, November 2012
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- Figure 108: Car buying habits and sentiments, by online sources expected to visit while car buying, November 2012
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- Figure 109: Car buying habits and sentiments, by online sources expected to visit while car buying, November 2012
Appendix: Trade Associations
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