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Car Buying - US - February 2013

Published By :

Mintel

Published Date : Feb 2013

Category :

Parts & Suppliers

No. of Pages : 166 Pages


The aging of one of the country’s largest generations, Baby Boomers, will have a lasting impact on the automotive market, especially because Millennials and Generation X are not taking to automobiles or the open road in as great as numbers as Boomers did. The silver lining here is that Boomers are not their father\'s generation. They expect to continue driving long into their later years. The challenge here is for automakers to develop models that cater to the specific needs of this aging population, without alienating them or younger cohorts.
TABLE OF CONTENT

SCOPE AND THEMES
What you need to know 
Definition 
Data sources 
Sales data 
Consumer survey data 
Advertising creative 
Abbreviations and terms 
Abbreviations 
Terms 

EXECUTIVE SUMMARY
The market 
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 
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 
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
Figure 4: Number of dealerships selling new cars, 2003-12 
Key player 
Top 10 automakers account for 92% of 2012 new vehicle sales 
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 
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 
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 
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 
Figure 9: Online sources expected to use while car buying, by generation, November 2012 
Two thirds of respondents say car buying is “stressful” 
Figure 10: Car buying habits and sentiments, November 2012 
Minorities more interested in car dealers aesthetic and convenience features 
Figure 11: Importance of selected dealership attributes and services, by race/Hispanic origin, November 2012 
What we think

ISSUES IN THE MARKET
Aging Baby Boomer population will change the car buying landscape 
Car dealerships almost universally distained by car buyers 

INSIGHTS AND OPPORTUNITIES
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
Trend: Totophobia 
Trend: Experience is All 
2015 Trends 
Access Anything, Anywhere 

MARKET SIZE
Key points 
U.S. vehicle sales reach 14.5 million units, the highest volumes since 2007 
Figure 12: U.S. unit sales of new cars and light trucks, 2007-12 

MARKET SEGMENTATION
Key points 
New cars vs. trucks 
Passenger cars make up majority of light vehicle sales for first time since 2009 
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
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
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 
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 
Figure 18: U.S. unit sales of CPO vehicles, 2007-12 

MARKET DRIVERS
Key points 
Improving macroeconomic conditions to positively impact auto sales 
Figure 19: Average credit score of new vs. used car buyers, 2007-12 
Figure 20: University of Michigan Consumer Sentiment, 2007-13 
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
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 
Figure 23: Average new car showroom age and replacement rate, 2007-16 
Higher taxes may impede short term growth of consumer spending 

COMPETITIVE CONTEXT
Key points 
Declines in vehicle use 
Figure 24: Consumer vehicle miles traveled, all U.S. roads and streets, 1998-2012 
Increased urbanization cuts into automobile dependency 
Figure 25: Most often form of transit used for work commute, by metro area, 2009 
Figure 26: Attitudes to transportation by type of commuter, 2009 
Car sharing a potential disruptive force to automobile ownership 
Figure 27: Car use, by trip purpose, average distance and time, 2009 

LEADING MANUFACTURERS
Key points 

MANUFACTURER OVERVIEW
Top 10 automakers account for 92% of 2012 vehicle sales and 93.4% of the new car dealers 
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
Key points 
DEALERSHIP OVERVIEW
Auto retailing is a highly competitive and fragmented market 
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 
Figure 30: Number of dealerships selling new cars, 2003-12 

MAJOR DEALERSHIP PROFILES
CarMax 
AutoNation 
Sonic Automotive 

AUTOMOTIVE WEBSITES
Key points 

AUTOMOTIVE WEBSITES OVERVIEW
Vast majority expect to use the internet next time they shop for a car 
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 
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 
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
Tred.com aims to take the hassles out of test-driving 
Figure 35: tred.com online teaser, January 2013 
CarWOO! helps truncate the car buying process through reverse dealer auctioning 
Figure 36: CarWOO!’s homepage, January 2013 
Lincoln adds a personal touch through complimentary concierge service 

MARKETING STRATEGIES
Key points 
Strategy: Use racing-, shooter-video games to promote vehicle launches 
Figure 37: 2014 Chevrolet Corvette C7 in Gran Turismo 5 
Figure 38: Jeep Tough Game, TV ad, November 2012 
Strategy: Use crowdsourcing to explore and develop unique vehicle features 
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 
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
Figure 43: Toyota Avalon New Formula, TV ad, January 2013 
Strategy: Emphasize a passion for cars as an expertise in car buying 
Figure 44: edmunds.com ask the car people, TV ad, July 2012 
Strategy: Show new car shoppers that you’re listening to their complaints 
Figure 45: Toyota RAV4 wish granted, TV ad, January, 2013 

VEHICLE OWNERSHIP AND SPEND
Key points 
Midsize cars and SUVs/CUVs most popular vehicle segments 
Figure 46: Vehicle ownership, type of vehicle by new, used, leased, or CPO, November 2012 
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 
Figure 48: Make of vehicle owned in household, domestic vs. foreign, by region, April 2011-June 2012 
Average car purchase at $19,000 
Figure 49: Amount spent on vehicle purchase – Most recently acquired, by age, April 2011-June 2012 
The average household owns about two cars 
Figure 50: Number of vehicles owned in the household, by household income, April 2011-June 2012 
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 
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 
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
Key points 
Younger households see greater benefit from haggling with dealership 
Figure 54: Attitudes towards haggling on price for a car, by age, November 2012 
Necessity for haggling falls as income rises 
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 
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
Key points 
Women expect to spend more time shopping for their next vehicle 
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 
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 
Figure 60: Length of time expected to spend shopping for car, by age, November 2012 

ONLINE CAR SHOPPING RESOURCES EXPECTED TO VISIT
Key points 
Grouping classification 
Average consumer expects to visit three types of online resources the next time they car shop 
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 
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 
Figure 63: Online sources expected to visit while car buying, by household income, November 2012 
Single person households visit more types of online resources 
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 
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 
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
Key points 
Younger consumers more interested in convenience features from car dealers 
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 
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 
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 
Figure 71: Importance of selected dealership attributes and services, by vehicle ownership, November 2012 

CAR BUYING HABITS AND SENTIMENTS
Key points 
Grouping classification 
Most women say buying a car is “stressful” 
Figure 72: Car buying habits and sentiments, by gender, November 2012 
Millennials see importance in researching not just vehicle models but car dealerships
Figure 73: Car buying habits and sentiments, by generation, November 2012 

IMPACT OF RACE AND HISPANIC ORIGIN
Key points 
Asian Americans disproportionately buy Japanese makes. Blacks prefer domestic makes 
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 
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 
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 
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 
Figure 79: Car buying habits and sentiments, by race/Hispanic origin, November 2012 

CLUSTER ANALYSIS
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 
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 
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 
Figure 85: Target clusters, by demographic, November 2012 
Cluster methodology 

APPENDIX: OTHER USEFUL CONSUMER TABLES
Vehicle ownership 
Figure 86: Vehicle ownership, by household income, November 2012 
Figure 87: Make of vehicle owned in household, domestic vs. foreign, by household income, April 2011-June
2012 
Figure 88: Whether the vehicle in household is owned or leased—Most recently acquired, by race and
household income, April 2011-June 2012 
Figure 89: Whether the vehicle in household is owned or leased – Most recently acquired, by Hispanic origin
and household income, April 2011-June 2012 
Figure 90: Whether the vehicle in household is owned or leased—Most recently acquired, by education, April
2011-June 2012
Figure 91: Whether the vehicle in household is owned or leased—Most recently acquired, by region, April
2011-June 2012
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 
Figure 93: Sources of information used when buying a vehicle—Purchased new, by education, April 2011-
June 2012 
Online sources used when car buying 
Figure 94: Online sources expected to visit while car buying, by gender, November 2012 
Figure 95: Online sources expected to visit while car buying, by age, November 2012 
Figure 96: Online sources expected to visit while car buying, by gender and marital status, November 2012 
Figure 97: Online sources expected to visit while car buying, by education, November 2012 
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 
Figure 99: How much time expected to spend shopping for car, by education, November 2012 
Attitudes towards haggling for a car 
Figure 100: Attitudes towards haggling on price for a car, by generation, November 2012
Figure 101: Attitudes towards haggling on price for a car, by vehicle ownership, November 2012 
Attitudes to dealership features and accommodations 
Figure 102: Importance of selected dealership attributes and services, November 2012 
Figure 103: Importance of selected dealership attributes and services, by age, November 2012 
Car buying habits and sentiments 
Figure 104: Car buying habits and sentiments, November 2012
Figure 105: Car buying habits and sentiments, by age, November 2012 
Figure 106: Car buying habits and sentiments, by household income, November 2012 
Figure 107: Car buying habits and sentiments, by online sources expected to visit while car buying, November
2012 
Figure 108: Car buying habits and sentiments, by online sources expected to visit while car buying, November
2012 
Figure 109: Car buying habits and sentiments, by online sources expected to visit while car buying, November
2012 

APPENDIX: TRADE ASSOCIATIONS

APPENDIX: RESEARCH METHODOLOGY

CONSUMER RESEARCH
Primary Data Analysis 
Sampling 
Global Market Insite (GMI) 
Secondary Data Analysis 
Experian Simmons National Consumer Studies 
Statistical Forecasting 
Statistical modelling 
Qualitative insight 
The Mintel fan chart 
Weather analogy 

APPENDIX: WHAT IS MINTEL?
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