Table of Contents
Executive Summary
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- The issues
- Car sales continue strength and reach prerecession levels
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- Figure 1: Total US sales and fan chart forecast of market, at current prices, 2010-20
- Replacement of old vehicle drives demand but trend is waning
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- Figure 2: Average age of passenger cars and light trucks, 2002-15
- Falling gas prices alter car buying demands
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- Figure 3: All grades all formulations retail gasoline prices, dollars per gallon, 2000-16
- The opportunities
- Over one third plan to purchase soon
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- Figure 4: Future purchasing plans, all, December 2016
- Technology shaping new demand for vehicles
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- Figure 5: Purchase reasons, all, December 2014 versus 2015
- Large vehicles making a strong comeback
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- Figure 6: Dodge Ram online ad, 2015
- Figure 7: Type of vehicle for next purchase, by age, December 2014 versus December 2015
- What it means
The Market – What You Need to Know
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- Car sales remain strong and reaching prerecession levels
- Used cars command higher share of market
- Vehicle age remains at record high, with possible signs of reversing
- Ongoing economic strength bodes well for car sales
- Falling gas prices shifts landscape
- Technology playing key role in the car buying process
- Vehicle financing rates incredibly low, for now
Market Size and Forecast
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- Car sales remain strong and reaching prerecession levels
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- Figure 8: Total US unit sales of new and used light vehicles, 2010-15
- New cars drive growth while used car sales are flat
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- Figure 9: Total US unit sales of new and used light vehicles, by segment, 2010 and 2015
- Used cars command higher share of market despite new car expansion
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- Figure 10: Total US unit sales of new and used light vehicles, by segment, 2010 (inner ring) versus 2015 (outer ring)
- Market will conservatively grow in the upcoming years
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- Figure 11: Total US sales and fan chart forecast of market, at current prices, 2010-20
- Fan chart forecast methodology
Market Factors
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- Vehicle age remains at record high with possible signs of reversing
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- Figure 12: Average age of passenger cars and light trucks, 2002-14
- Ongoing economic strength bodes well for car sales
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- Figure 13: Personal income, 2002-15
- Falling gas prices alter car buying demands
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- Figure 14: All grades all formulations retail gasoline prices, dollars per gallon, 2000-16
- Technology playing key role in research and soon will in purchasing process
- Vehicle financing rates incredibly low, for now
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- Figure 15: Effective federal funds rate, 1990-2015
Key Players – What You Need to Know
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- Technology shaping demand and buying process
- Hybrids face challenge as gas prices plummet
- Online services will streamline process
What’s Working?
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- Technology shaping demand and buying process
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- Figure 16: Purchase reasons, all, December 2014 versus 2015
- Technology raises consumer confidence during buying process
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- Figure 17: TrueCar online ad, 2015
What’s Struggling?
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- Hybrids face challenge as gas prices plummet
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- Figure 18: US unit sales and forecast of hybrid and plug-in vehicles, 2010-20
- Figure 19: Tesla email ad, 2015
What’s Next?
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- Online services could streamline car buying process
The Consumer – What You Need to Know
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- Over one third plan to purchase very soon
- Many seek a vehicle with new and better technology
- Consumers waiting until vehicles break down
- In-person element remains crucial in car purchasing process
- Women now more involved in car buying process
- Large vehicles making a strong comeback
Future Purchasing Plans
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- Over one third plan to purchase very soon
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- Figure 20: Future purchasing plans, all, December 2016
- Men more likely to be planning near-term purchase
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- Figure 21: Future purchasing plans, by gender, December 2016
- Younger, more affluent consumers are near-term buyers
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- Figure 22: Future purchasing plans, by age and household income, December 2016
- Parents are in the market for a car
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- Figure 23: Future purchasing plans, by presence of children, December 2016
- Hispanics most likely to purchase in next year
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- Figure 24: Future purchasing plans, by race/Hispanic origin, December 2016
Purchase Reasons
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- Many seek a vehicle with new and better technology
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- Figure 25: Purchase reasons, all, December 2014 versus 2015
- Near-term buyers want additional car, new financing
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- Figure 26: Purchase reasons, plan on buying a car in next three years, December 2015
- Technology critical for younger male consumers
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- Figure 27: Purchase reasons, by gender and age, December 2015
- Desire for technology increases with income
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- Figure 28: Purchase reasons, by household income, December 2015
- Hispanics buying because they need additional vehicle and financing
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- Figure 29: Purchase reasons, by race/Hispanic origin, December 2015
Reasons for not Purchasing
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- Consumers waiting until vehicles break down
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- Figure 30: Reasons for not purchasing, all, December 2014 versus December 2015
- Those aged 45-54 driving older cars, waiting to buy
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- Figure 31: Reasons for not purchasing, by age, December 2015
- Opportunity for leasing to Black consumers
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- Figure 32: Reasons for not purchasing, by race/Hispanic origin, December 2015
Car Purchase Research
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- In-person element remains crucial in car purchasing process
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- Figure 33: Car purchase research, all, December 2015
- Opportunity to make test-driving more friendly for joint buyers
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- Figure 34: Car purchase research, all, December 2015
- Opportunity to make young women feel more comfortable in-person
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- Figure 35: Car purchase research, by gender and age, December 2015
- Professional car reviews attractive to affluent buyers
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- Figure 36: Car purchase research, by household income, December 2015
- Opportunity for more test-driving among multiculturals
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- Figure 37: Car purchase research, by race/Hispanic origin, December 2015
Purchase Responsibility
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- Many consumers buy independently
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- Figure 38: Purchase responsibility, all, December 2015
- Women now more involved in car buying process
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- Figure 39: Purchase responsibility, by gender, December 2015
- Car buying can represent independence for Millennials
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- Figure 40: Purchase responsibility, by generation, December 2015
- Parents, surprisingly, buy independently
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- Figure 41: Purchase responsibility, by generation, December 2015
- Blacks more likely to be buying independently
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- Figure 42: Purchase responsibility, by race/Hispanic origin, December 2015
Type of Vehicle for Next Purchase
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- SUV/Crossover most popular vehicle
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- Figure 43: Dodge online ad, 2016
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- Figure 44: Toyota print ad, 2016
- Figure 45: Chevrolet online ad, 2016
- Figure 46: Type of vehicle for next purchase, all, December 2015
- Large vehicles making a strong comeback
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- Figure 47: Type of vehicle for next purchase, by age, December 2014 versus December 2015
- Income plays a significant role in choice of vehicle type
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- Figure 48: Type of vehicle for next purchase, by household income, December 2015
- Majority of Blacks purchase midsize/large cars
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- Figure 49: Type of vehicle for next purchase, by race Hispanic/origin, December 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
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