Marketing Research Group Fact Sheet: Automotive Marketing Trends
Key Insights:
• Automakers face two primary challenges: how to expand their focus beyond new vehicles to downstream services, parts and other products and how to build and sustain brands that appeal to customers on an emotional level Understanding the purchasing funnel and its bottlenecks throughout the life cycle will reduce churn and increase customer retention. Direct Mail is a strong media on its own or in combination with other media to provide information that consumers are seeking when making a vehicle purchase.
•
•
The research presented in this fact sheet was conducted by Canada Post except where noted.
downward trend however they predict a turnaround in the latter part of the decade.
The Automotive Industry:
Based on the most current Statistics Canada1 data, we know the following about the Canadian Automotive industry: • • New car sales have remained flat while sales of used, recreational motor vehicles and parts have increased by 1.1% Volume of new motor vehicles overall have declined by 5%. Based on origin of manufacture volumes have declined in North American by 5% and overseas by 6%. Average price per vehicle has increased by 3.2% in North America while overseas manufactured cars remained constant at 0.6%. Personal expenditures on transportation increased overall by 3.9% suggesting that consumers are keeping their car longer: o Personal expenditures on new and used motor vehicles have declined by 2.2%. Spending has increased on motor vehicle repairs and parts by 5.5% as well as fuels/lubricants by 11.7% and other auto related services by 6.2%. Purchased transportation has also increased by 7.7%.
Canadian Automotive Statistics
New Car and Used/Parts Dealers New Car Dealers Used, recreational & parts dealers Total Total Retail Sales $000,000 2003 2004 % Chg 68184 68141 -0.1% 14394 14559 1.1% 82578 82700 0.1% # Number of Vehicles 2003 2004 % Chg 1258862 1196451 -5.0% 367606 344408 -6.3% 1540859 -5.3% 1626468 $ Average Price per Vehicle 2003 2004 % Chg 31307 32301 3.2% 30147 30328 0.6% 31508 1.5% 31045 $ Millions of dollars 2003 2004 % Chg 42290 41352 -2.2% 13878 14643 5.5% 21691 24230 11.7% 7379 7840 6.2% 11850 12767 7.7% 97088 100832 3.9% 2004 442795 210866 213775 170216 144455 1182107 1534415 % Ttl 29% 14% 14% 11% 9% 77%
Sales of new motor vehicles by Mfg origin North American Manufactured vehicles Overseas manufactured vehicles Total Vehicles
• • •
Sales of new motor vehicles by Mfg origin North American Manufactured vehicles Overseas manufactured vehicles Total Vehicles Personal expenditure on Transportation New & Used (Net) motor vehicles Motor vehicle repairs & parts Motor fuels and lubricants Other auto related services Purchased transportation Total Top 5 Light Vehicle Sales (Number of) General Motors Daimler Chrysler Ford Toyota/Lexus Honda/Acura Total of Top 5 Total Light Vehicle Sales
o
o • •
5 Automotive manufacturers of light vehicles make up 77% of all sales Automotive Industries Association of Canada indicates that Canada is currently in a
June 2006 1/3
Market Research Group Fact Sheet: Automotive Marketing Trends
Roles Within the Automotive Industry:
• The communication process is organized around the dominant participants at each stage: o Automotive manufacturers (OEMs) focus on brand awareness in the early stages In the middle of the process, newspaper advertising is often intended to communicate financial incentives by dealers or dealer marketing groups Advertising agencies are service providers to the OEMs for creative strategy and media selection. Dealers dominate the final stages of the sales with OEM’s providing a supporting role
Suggested Media During the Purchasing Process2
• In choosing a car, consumers typically begin by considering several different models. The selection narrows as they move through the purchasing process where products are examined for purchasing requirements.
o
Aw areness Fam iliarity C onsideration S hort-listing
O ned w C urrently Purchase brand before ow n
B fit = est
o
A areness w
T V P t rin D irect M ail In et tern Sales Force
Reach is effective R each is m ore targeted Reach is highly targeted Reach is targeted yet lim ited
C onsideration
D elivers brand “personality” Explains brand benefits Sends detailed targeted m essages
Experience
Presents trial offer m essages Presents trial-offer m essages M include ay inducem ents
Loyalty
Reinforces brand im age Plays no significant role Explains benefits further Provides ongoing source of affinity
o
Provides rich source of C overcom final an e brand inform ation, barriers experience M oves to m intense ore sales focus C overcom an e specific purchase barriers
W o D W at? h oes h
B rand-basedco-ops– buyandplaceregional m arketingcollateral C ross-brand industryassociations
Engages in prospecting activities
O ffers possibility of personal relationship
The First Time Automotive Buyer3:
• The Iinternet is the most important informational tool for first-time car buyers (Nov. 2005, Ages 1830 across the U.S.) Internet Television Magazines Newspapers Radio 35.0% 8.2% 4.4% 3.6% 1.1%
D ealer M arketing G roups
D ealer A ssociations D ealers C onsum ers
A otive utom M anufacturers(O M E s)
A dvertising A gencies
B brand uild H closedeal –incentives elp R einforceloyalty
S erviceprovider toO M Es increativestrategy, m selection edia
R newvehicles etail P / service arts U vehicles sed
•
65% took out a loan when a new vehicle was purchased while 46% of used vehicle purchases decided on financing of some type. Of those taking out a loan, more than 57% were through their dealership while nearly 34% sought financing through their own financial institution.
June 2006 2/3
Market Research Group Fact Sheet: Automotive Marketing Trends
Online Automotive Facts4:
• • 70% of consumers use the web sometime during their automotive purchase Top reasons that U.S. new car buyers used the Internet as an information source for an automobile (July – Oct 2005): o o o • • Finding price information 58% Comparing different vehicles 55% Conducting general research 53%
o
60%+ of males over the age of 35 were more likely to do research on the net. % Adult Internet users who gathered automotive information online by household income: <$35K $35K - $75K >$75K 23.3% 28.1% 35.2%
o
Top 10 auto manufacturers spent only 2.5% of their total ad spending on the Internet. Approximately one out of four users researched cards, SUV’s, vans, or pickup trucks online5. o 29% of males versus 19% of females
_______________
Adapted from Statistics Canada, 2005 Market Research Handbook Catalogue no. 63-224-XIB, p.75, 192, 200,-209, CPC Study #05-161.
2 3 4 5
1
The McKinsey Quarterly:“Revving up auto branding, Exhibit 4” 2002. Polk Centre for Automotive Studies, Building the Pipeline, Dec.2005. eMarketer, NY, Gearing up for Greater Spending, Mar. 2006 eMarketer ,NY, Men and Cars: Inseparable Online Too, Mar. 2006
CONFIDENTIAL - DO NOT COPY. This material is the exclusive property of Canada Post Corporation and is for Canada Post INTERNAL use only. Any other use or reproduction of materials, in whole or in part, is strictly prohibited except with the written permission of an authorized representative of Canada Post Corporation.
June 2006 3/3