Automobile Purchase Process - US - April 2008

Table of Contents

• Scopes and Themes
• What you need to know
• Definition
• Data sources
• Sales data
• Consumer survey data
• Abbreviations and terms
• Executive Summary
• Economic concerns drag down the market
• Detroit 3 continue to cede share to imports
• Rising gas prices drive focus on fuel economy
• Internet reshaping interaction between dealers and buyers
• Dealers learn how to acquire and handle sales leads
• Dealers use Internet to adjust pricing daily
• Empty-nester Boomers represent outsized share of car spending
• Household income determines receptivity to marketing
• Advertising stays green and shifts to the Internet
• Market Size and Forecast
  • Figure 1: Total U.S. sales and forecast of new and used vehicles to individuals, 2002-12
  • Figure 2: Total U.S. sales and forecast of new and used vehicles to companies and individuals, 2003-07
• Competitive Context
• Big 3 spend on incentives to slow declining share
  • Figure 3: Average incentive paid per vehicle by leading car and truck manufacturers, 2005-07
• Financing charges on decline once again
  • Figure 4: Total U.S. finance charges for new and used vehicles to individuals, 2002-06
• Symbolic Prius dominates hybrids
  • Figure 5: Unit sales of hybrid cars and trucks, 2006-07
• Crossovers are the future of SUVs
• Segment Performance
• Rising fuel costs put focus back on cars in 2005
  • Figure 6: U.S. sales of new and used vehicles to individuals, by segment, 2002-07
  • Figure 7: U.S. indexed sales of new and used vehicles to individuals, by segment, 2002-07
• Segment Performance--New Trucks
• Drop in new truck spending stemmed by CUVs
  • Figure 8: U.S. sales of new trucks to individuals, by segment, 2002-07
• Segment Performance--Used Trucks
• Used truck spending grows as new trucks abandoned
  • Figure 9: U.S. sales of used trucks to individuals, by segment, 2002-07
• Segment Performance--New Cars
• New car spending rebounds but snagged by recession
  • Figure 10: U.S. sales of new cars to individuals, by segment, 2002-07
• Segment Performance--Used Cars
• Used car spending much lower than used trucks
  • Figure 11: U.S. sales of used cars to individuals, by segment, 2002-07
• Retailing Trends
• Key points
• Top dealerships stay strong
  • Figure 12: Top ten dealership groups in the U.S., 2007
• Import dealerships grow as total dealerships shrink
  • Figure 13: Number of American brand and foreign brand dealerships, 2007-08
• No-haggle pricing works
• Internet sales groups are commonplace
• Sales leads from third-party sites on decline
• Market Drivers
• Older boomers hold outsized share of car spend
  • Figure 14: U.S. population and projections and spending on vehicles, by age, 2002-12
• Consumers pull back in poor economic climate
• Elevated gas prices to continue
• Leading Companies
• Key points
• Domestic nameplates continue share erosion
• Japanese imports rise even higher
  • Figure 15: Market share by new vehicle volume of leading car and truck manufacturers, 2003-07
  • Figure 16: New vehicle unit sales of leading car and truck manufacturers, 2005 and 2007
• Brand Qualities
• Toyota: the ascendant American brand
• Hyundai aims higher with thoughtful campaign
• Lower luxury brands set sights on younger buyers
• Innovation and Innovators
• Honda and Mazda go hydrogen
• Scion successfully positioned for Gen Y buyers
• Third-party sales leads are scored and bought
• Used dealers use web-based intelligence to price to sell
• Advertising and Promotion
• Manufacturer advertising
  • Figure 17: Media expenditures of selected automobile brands, 2005-06
• Saving gas and saving lives
• Internet advertising continues to evolve
• Dealer advertising
  • Figure 18: Estimated advertising expenditures of dealerships, by number of new units sold, 2006
  • Figure 19: Graph: Estimated advertising expenditures by dealerships, by media type, 2006
• Dealers jump on board the Internet
  • Figure 20: Internet adspend of dealer associations, 2007
• Television ads
• CarMax
  • Figure 21: CarMax Internet seminar, December 2007
  • Figure 22: CarMax ancient Rome, February 2008
• Autotrader
  • Figure 23: AutoTrader, September 2007
• Consumers--Owned and Leased Vehicles
• Demographics responsible for purchase or lease
  • Figure 24: Purchase incidence of car or truck in the past five years, March 2008
• Consumers--Who Buys New, Used, or Leases
  • Figure 25: Incidence of buying new, used or leasing, by age, March 2008
  • Figure 26: Incidence of buying new, used or leasing, by income, March 2008
• Consumers -- Vehicle Types Owned or Leased
  • Figure 27: Types of vehicles owned or leased, March 2008
• Consumers--Price Paid
  • Figure 28: Price of most recent vehicle bought or leased, March 2008
  • Figure 29: Price of most recent vehicle bought or leased, by age, March 2008
  • Figure 30: Composition of price tier buyers, by age, March 2008
  • Figure 31: Price of most recent vehicle bought or leased, by income, March 2008
• Consumers--Circumstances Prompting Purchase of Vehicle
  • Figure 32: Circumstances prompting purchase of vehicle, March 2008
  • Figure 33: Circumstances prompting purchase of vehicle, by income, March 2008
• Consumers--Types of Vehicles and Benefits that Determined Purchase
  • Figure 34: Types of vehicles and benefits that determined purchase, March 2008
  • Figure 35: Types of vehicles and benefits that determined purchase, by age, March 2008
  • Figure 36: Types of vehicles and benefits that determined purchase, by income, March 2008
• Consumers--Time Spent Researching Purchase
  • Figure 37: Time spent researching purchase, March 2008
  • Figure 38: Time spent researching purchase, by income, March 2008
• Consumers--Information Sources
  • Figure 39: Information sources, March 2008
  • Figure 40: Information sources, by gender, March 2008
  • Figure 41: Information sources, by age, March 2008
  • Figure 42: Information sources, by income, March 2008
• Consumers--Types of Websites Visited prior to Purchase
  • Figure 43: Types of websites visited prior to purchase, March 2008
  • Figure 44: Types of websites visited prior to purchase, by age, March 2008
  • Figure 45: Types of websites visited prior to purchase, by income, March 2008
• Consumers--How Internet Helped in Purchase
  • Figure 46: How Internet helped in purchase, March 2008
• Consumers--Views on Dealerships and Salespeople
  • Figure 47: Views on dealerships and salespeople, March 2008
• Consumers--Race and Ethnicity
  • Figure 48: Incidence of buying new, used or leasing, by race/ethnicity, March 2008
  • Figure 49: Price of most recent vehicle bought or leased, by race/ethnicity, March 2008
  • Figure 50: Types of vehicles and benefits that determined purchase, by race/ethnicity, March 2008
  • Figure 51: Information sources, by race/ethnicity, March 2008
  • Figure 52: Views on dealerships and salespeople, by race/ethnicity, March 2008
• Consumers--Method of Financing
• Trended
  • Figure 53: Method of financing for most recently acquired vehicle, 2002-07
• Financing by methods by age and income
  • Figure 54: Method of financing for most recently acquired vehicle, by age, May 2006-June 2007
  • Figure 55: Method of financing for most recently acquired vehicle, by income, May 2006-June 2007
• Appendix: Other Useful Consumer Tables
  • Figure 86: Circumstances prompting purchase of vehicle, by age, March 2008
  • Figure 87: Types of vehicles and benefits that determined purchase, by gender, March 2008
  • Figure 88: Views on dealerships and salespeople, by age, March 2008
  • Figure 89: Make and model, most recently owned or leased vehicle, May 2006-June 2007
  • Figure 90: Features in most popular makes, most recently owned or leased vehicle, May 2006-June 2007
  • Figure 91: Features in most widely owned luxury makes, most recently owned or leased vehicle, May 2006-June 2007
• Appendix: Trade Associations