Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Car buying is a stressful process according to most car shoppers
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- Figure 1: Attitudes toward car purchasing – Buying a car is stressful, by gender, March 2017
- Many are worried they will overpay for their next vehicle
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- Figure 2: Attitudes toward car purchasing – Price, by age, March 2017
- Multiple shopping resources used in purchase process
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- Figure 3: Shopping resources, March 2017
- The opportunities
- Shoppers know the body style, but not the brand of their next vehicle
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- Figure 4: Pre-purchase decisions, March 2017
- Third-party site users cross-shop multiple platforms
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- Figure 5: Shopping resources, by third-party sites, March 2017
- Younger shoppers open to alternative buying processes
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- Figure 6: Attitudes toward car purchasing, by age, March 2017
- What it means
The Market – What You Need to Know
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- New vehicle sales look stagnant for 2017
- Larger vehicles continue to sell
- Off-lease vehicles flood used car market
- Low gas prices expected to stay low
Market Size and Forecast
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- Overall automotive market plateaus before forecasted growth
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- Figure 7: Total US unit sales and fan chart forecast of new and used light vehicles, 2011-21
- Figure 8: Total US unit sales and forecast of new and used light vehicles, 2011-21
Market Breakdown
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- Consumer preference shifts from light cars to light trucks
- Used car market will continue to grow
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- Figure 9: Total U.S. unit sales and forecast of new and used light vehicles, by segment, 2011-21
- Figure 10: Total U.S. unit sales of new and used light vehicles, by segment, 2014 and 2016
Market Factors
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- Federal Reserve interest rate hike could slow sales
- Average national gas prices remain below $2.50
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- Figure 11: US gasoline and diesel retail prices, January 2007-April 2017
- Consumer confidence remains high
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- Figure 12: Consumer Sentiment Index, January 2007-March 2017
- Age of vehicles on the road
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- Figure 13: Average age of vehicles, 1996-2016
- Used car market will face influx of off-lease vehicles
Key Players – What You Need to Know
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- Carvana planning to go public
- Beepi shutters operations
- Tesla challenging long-established franchise dealer sales model
What’s Working?
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- CarMax’s sales process attractive to used car shoppers
- Third-party advertising sites provide a neutral platform for consumers
- Carvana applies for initial public offering
What’s Struggling?
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- Beepi shutters operations
- Kelley Blue Book’s email marketing
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- Figure 14: Third-party advertising email marketing competitive landscape, January 2016-December 2016
- Figure 15: Third-party advertising email marketing inbox rate, read rate, and volume, January 2016-December 2016
What’s Next?
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- Tesla challenges the franchise dealership model
- Start-ups continue quest to sell cars online
The Consumer – What You Need to Know
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- English speaking Millennial Hispanics show highest purchase intent
- Shoppers know what body style, but not the brand of their next vehicle
- More car shoppers classified as Adversarial Shoppers
Purchase Intent
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- Nearly three in 10 consumers plan to buy within the year
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- Figure 16: Purchase intent, March 2017
- Purchase intent trending down
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- Figure 17: Purchase intent, July 2016-March 2017
- Two in 10 consumers younger than 35 plan to buy within six months
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- Figure 18: Purchase intent, by age, March 2017
- Millennial Hispanics show high intent in near future
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- Figure 19: Purchase intent, by Hispanic origin and generation, March 2017
Trade-in Intent
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- Half of buyers with a vehicle in the household intend to trade in
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- Figure 20: Trade-in intent, March 2017
- Six in 10 fathers considering a trade-in
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- Figure 21: Trade-in intent, by gender and parental status, March 2017
Type of Purchase
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- Majority of consumers remain aspirational for their next vehicle
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- Figure 22: Purchase type, March 2017
- Age and income are main factors in purchase type
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- Figure 23: Purchase type, by age and household income, March 2017
Pre-purchase Decisions
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- Car shoppers likely to buy from a dealer and know the body style
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- Figure 24: Pre-purchase decisions, March 2017
- As purchase nears, brand preference comes to mind
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- Figure 25: Pre-purchase decisions, by purchase intent, March 2017
- Men are likely to be sole decision maker for the next vehicle purchase
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- Figure 26: Pre-purchase decisions, by gender and relationship status, March 2017
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- Figure 27: Volkswagen 2017 Spring Three And Easy Event | "Coffee", March 2017
Purchase Reasons
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- Desire for a newer vehicle tops reasons for purchase
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- Figure 28: Purchase reasons, March 2017
- Younger car shoppers want a vehicle that is more fun to drive
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- Figure 29: Purchase reasons, by age, March 2017
- Parents need a larger vehicle for the kids
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- Figure 30: Purchase reasons, by parental status, March 2017
Research Topics
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- Car performance features tops research topics
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- Figure 31: Research topics, March 2017
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- Figure 32: Research topics, by nets, March 2017
- CPO shoppers do more research
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- Figure 33: Research topics, by purchase type, March 2017
- Women more likely than men to research safety features
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- Figure 34: Research topics, by gender, March 2017
- Research topics – TURF analysis
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- Figure 35: TURF Analysis – Vehicle research, March 2017
Shopping Resources
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- Most shoppers are using or plan to use a dealer or manufacturer’s site
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- Figure 36: Shopping resources, March 2017
- Online buying sites used exclusively by younger consumers
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- Figure 37: Shopping resources, by age, March 2017
- Third-party site users cross-shop multiple sites
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- Figure 38: Shopping resources, by third-party sites, March 2017
- Cars.com and KBB top third-party sites for English-speaking Hispanics
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- Figure 39: Shopping resources, by Hispanic origin, March 2017
- Shopping resources – Correspondence analysis
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- Figure 40: Correspondence analysis – Shopping resources, March 2017
Research Methods
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- Test-driving is the top method for researching
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- Figure 41: Research methods, March 2017
- More consumers use an app or watch online videos closer to purchase
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- Figure 42: Research methods, by purchase intent, March 2017
- Consumer reviews top professional reviews
Attitudes toward Car Purchasing
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- Nearly eight in 10 consumers will consider maintenance costs
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- Figure 43: Attitudes toward car purchasing, March 2017
- Millennials don’t trust car salespeople
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- Figure 44: Attitudes toward car purchasing, by generation, March 2017
- Younger car shoppers regardless of gender worry about overpaying
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- Figure 45: Attitudes towards car purchasing, by gender and age, March 2017
Car Purchasing Process Cluster Analysis
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- Car shoppers classified into three different segments
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- Figure 46: Car purchasing process segments, March 2017
- Adversarial Shoppers
- Characteristics
- Opportunities
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- Figure 47: Profile of Adversarial Shoppers, March 2017
- Empowered Shoppers
- Characteristics
- Opportunities
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- Figure 48: Profile of Empowered Shoppers, March 2017
- Unconventional Shoppers
- Characteristics
- Opportunities
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- Figure 49: Profile of Unconventional Shoppers, March 2017
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
- Methodology – TURF analysis
- Methodology – Correspondence analysis
Appendix – The Market
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- Figure 50: Total US unit sales of total used light vehicles and CPO light vehicles, 2011-16
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