Key Industry Stat(s) of the Week

‍Cars.com has identified 6 trends that will drive the automotive retail industry in the 2nd half of 2020.  (Source: Cars.com, Pandemic Spurs New Ways to Buy and Sell Cars Digitally).

Key takeaways:

1. Digital retailing in retail automotive I here to stay  →  71% of car shoppers want to complete some, if not all, of a car purchase online

• ‍ODC Tip: As more and more Americans get comfortable and used to car shopping online, it is more important than ever to reach these consumers on the open web where they are doing their online car research and shopping.  This should make programmatic campaigns that leverage our audiences for behavioral targeting and utilize contextual targeting to reach consumers with your ad in real-time while they’re doing their research/shopping critical to your digital advertising mix.

2. 30% of US car shoppers want at-home test-driving from dealerships.

3. COVID-19 could help rejuvenate interest in sedans as many Americans, who live in major cities and previously relied on public transportation or ride sharing services, are looking for cheaper vehicles to help them get out of their homes safely.  Cars.com found a 14% increase in consumers searching for sedans on their site.

4. Cars.com also found interest in used vehicles is increasing, with search volume on cars.com increasing by 4.5% → inventory issues with new vehicles plays a factor as well

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New research from IHS Markit has found that the average age of light vehicles, in operation in the US, is up to ~12 years (11.9 years to be exact) -- the volume of vehicles that are between 6 and 11 years old is expected to expand.

• As the average age of vehicles increases slightly (and especially in vehicles aged 6-11 years), dealer service plans and warranties will be expiring → good news for dealerships looking to increase their service and repair booking appointments and fixed ops revenue.  (Source: IHS Markit, Average Age of Cars and Light Trucks in the U.S. Approaches 12 Years)

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U.S. Retail Auto Market Continues to Climb Back in July

• Toyota (-19%), Honda (-11%), and Kia (-1.7%) posted their smallest U.S. sales decline in July since the pandemic started in March, with July sales actually rising with Mazda (+3.4%), Volvo (+10%), and Hyundai (+1).  (Source: Automotive News, Toyota, Honda, Kia rally continues; Hyundai posts 1st gain since Feb.)

Video Content Playing a Larger Role in Vehicle Shopping

• A study by Google has found that over 75% of U.S. auto shoppers say that online video has influenced their shopping habits or purchases, 92% of car buyers do research online before they buy, and 64% of car shoppers who watch online videos during their car research and purchase say new video formats such as 360-degree video would convince them to buy a car without a test drive.  (Source: Think with Google, Auto Video Shopping Statistics)

Dodge and Porsche Lead the Way in J.D. Power’s 2020 Automotive Performance, Execution, and Layout (APEAL) Study

• Porsche earns the highest ranking overall for both luxury and mass market, and Dodge ranks highest in mass market segment, followed by Ram, GMC, and Ford.  (Source: J.D. Power, Most Owners Satisfied with New Vehicles; Some Truly Love them Despite their Flaws)
• Hyundai Motor Group had the most model-level awards with 5, followed by BMG AG and Nissan Motor Co. with 4 each.

Demand for Used Vehicles Increasing

• Inventory issues with new vehicles at dealerships plus a decrease in interest rates for used car loan have seen US demand for used vehicles increase → as evidenced by June’s used vehicle sales in the U.S. beating their forecast by 17%.  (Source: CBT News, Used Vehicle Demand in the US is Shaking Up Inventories)

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Source: Oracle