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New Cars - US - October 2012

“Consumers who put off buying a vehicle during the recession are now, in the post-recession era, feeling the need to purchase. With used car prices high, and gas prices peaking about $4 per gallon in some markets, new cars are an attractive and realistic option for many. In particular, consumers are responding by choosing smaller, lighter and more fuel-efficient cars and crossover utility vehicles that correspond to their immediate and long-term budgets.”

– Bill Patterson, analyst

Some questions answered in this report include:

  • What effect does the fuel economy have on the decision to buy a new car?
  • To what extent is pent-up demand forcing consumers to buy?
  • Whichnew car segment is currently the most popular choice for consumers and why?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                      • The market
                        • Figure 1: Fan chart forecast of U.S. unit sales of new cars, 2007-17
                      • Market factors
                        • Rising fuel prices forcing consumers to consider more fuel-efficient vehicles
                          • Figure 2: U.S. regular conventional retail gasoline prices, October 2002-12
                        • Recession caused consumers to hold onto cars longer, creating pent-up demand
                            • Figure 3: Average age of cars, light trucks on the road, 1995-2011
                          • Consumers driving fewer miles, seeking alternates to driving
                            • Figure 4: Consumer vehicle miles traveled, all U.S. roads and streets, 1998-2011
                          • Segmentation
                            • Unit sales of cars surpassing light truck unit sales in 2012
                              • Smaller, midsize cars growing more than luxury, large cars
                                • SUV/CUVs control more than 60% of light truck market
                                  • Figure 5: Unit sales of new cars and light trucks, cars vs. light trucks, 2007-17
                                • The consumer
                                  • Majority of households owning midsized cars, followed by small cars
                                    • Figure 6: Small, midsized, full-sized car ownership or lease, by car segment, June 2012
                                  • One third of respondents intending to buy a car are looking to mid-size cars
                                    • Figure 7: Type of new vehicle consumers intending to buy, by gender, June 2012
                                  • 40% of respondent households considering purchase/lease of new, not used vehicles
                                    • Figure 8: Anticipated age of vehicle to purchase next, by gender, June 2012
                                  • Respondents aged 18-34 most likely to purchase within six months
                                    • Figure 9: When new car will be purchased, by age - all vs. 18-34 year olds, June 2012
                                  • Affordability top reason for not buying new
                                    • Figure 10: Reasons for not purchasing new cars, by age - 18-24 vs.65+, June 2012
                                  • Better fuel economy top reason that is motivating purchasing
                                    • Figure 11: Reasons for purchasing new cars, by gender, June 2012
                                  • Asian respondents more likely than white, black, Hispanic to purchase new
                                    • Figure 12: Anticipated age of proposed vehicle purchase, by race/Hispanic origin, June 2012
                                  • What we think
                                  • Issues in the Market

                                      • Fuel economy becoming primary factor in consumer decision to buy
                                        • Pent-up demand hitting threshold, forcing consumers to buy
                                          • Consumers turning to lighter, smaller cars, crossover utility vehicles
                                          • Insights and Opportunities

                                            • Expanding customer interaction through real-time technology
                                              • Car rental programs give consumers chance to test drive vehicles
                                                • Emphasizing the vehicle’s personality quirks to draw in consumers
                                                  • Creating opportunities for kids to help groom future buyers
                                                  • Trend Application

                                                      • Inspire trend: Minimize Me
                                                        • Inspire trend: The Unfairer Sex
                                                          • Inspire 2015 trends
                                                            • Old Gold
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • New car market unit sales in 2014 will represent greatest peak in 7 years
                                                                    • Figure 13: Total U.S. unit sales and forecast of new cars, 2007-17
                                                                  • Fan chart forecast
                                                                      • Figure 14: Fan chart forecast of U.S. unit sales of new cars, 2007-17
                                                                  • Market Drivers

                                                                    • Escalating fuel prices forcing consumers to smaller, midsize vehicles
                                                                        • Figure 15: U.S. regular conventional retail gasoline prices, by first week in October, 2002-12
                                                                      • Consumers holding onto cars, trucks longer creating pent-up demand
                                                                          • Figure 16: Average age of cars, light trucks and total light vehicles, 1995-2011
                                                                        • Declines in vehicle use reflects consumer hesitation at gas pump
                                                                            • Figure 17: Consumer vehicle miles traveled, all U.S. roads and streets, 1998-2011
                                                                          • New fuel efficiency standards to serve consumer demand at gas pump
                                                                            • Consumer sentiment rising, but lower than prerecession levels
                                                                            • Segment Performance—Overview

                                                                              • Key points
                                                                                • Unit sales of cars, trucks evenly split new vehicle market share in 2011
                                                                                    • Figure 18: Total U.S. unit sales and market share of cars and light trucks, 2009, 2011 and 2013
                                                                                    • Figure 19: Unit sales and forecast of new cars and light trucks, by segment, 2007-17
                                                                                • Segment Performance—Cars

                                                                                  • Key points
                                                                                    • Unit sales of cars estimated to grow 23% in 2012
                                                                                      • Figure 20: Total U.S. unit sales and forecast of new cars, 2007-17
                                                                                    • Midsize cars showing greatest growth in unit sales over 12-month period
                                                                                      • Figure 21: Total U.S. unit sales of new car segments, 12-month total for August 2012 and August 2011
                                                                                    • Majority of top 20 cars sold over 12 months are small, the rest midsize
                                                                                      • Figure 22: Top 20 new car unit sales and market share, by 12-month totals for August 2012 and August 2011
                                                                                  • Segment Performance—Light Trucks

                                                                                    • Key points
                                                                                      • Light truck unit sales estimated to grow 12% in 2012
                                                                                        • Figure 23: Total U.S. unit sales and forecast of new light trucks, 2007-17
                                                                                      • SUV/CUVs control more than 60% of light truck market
                                                                                          • Figure 24: Total U.S. unit sales of light truck segments, 12-month total for August 2012 and August 2011
                                                                                        • Half of segment’s top 20 best-selling vehicles are CUVs
                                                                                            • Figure 25: Top 20 new light truck unit sales and market share, by 12-month totals for August 2012 and August 2011
                                                                                        • Innovation and Innovators

                                                                                          • VW partners with makeup celebrity to discourage distracted driving
                                                                                            • Chrysler launches industry’s first in-car wireless recharging system
                                                                                              • Nissan introduces system to alert drivers of low, high tire pressure
                                                                                                • Ford develops system that forecasts traffic congestion
                                                                                                  • GM introduces industry’s first front-center air bag
                                                                                                    • Michigan dealership group encourages social media test drives
                                                                                                    • Brand Research

                                                                                                      • Brand map
                                                                                                          • Figure 26: Attitudes toward and usage of brands in the car sector, August 2012
                                                                                                        • Brand attitudes
                                                                                                          • Figure 27: Attitudes by car brand, August 2012
                                                                                                        • Brand personality
                                                                                                            • Figure 28: Car brand personality – macro image, August 2012
                                                                                                            • Figure 29: Car brand personality – micro image, August 2012
                                                                                                          • Brand experience
                                                                                                            • Figure 30: Car brand usage, august 2012
                                                                                                            • Figure 31: Satisfaction with various car brands, August 2012
                                                                                                            • Figure 32: Consideration of car brands, August 2012
                                                                                                            • Figure 33: Consumer perceptions of current car brand performance, August 2012
                                                                                                            • Figure 34: Car brand recommendation—Net Promoter Score, August 2012
                                                                                                          • Brand index
                                                                                                            • Figure 35: Car brand index, August 2012
                                                                                                            • Figure 36: Car brand index vs. recommendation, August 2012
                                                                                                          • Target group analysis
                                                                                                            • Figure 37: Target groups, August 2012
                                                                                                            • Figure 38: Car brand usage, by target groups, August 2012
                                                                                                          • Group One—Conformists
                                                                                                            • Group Two—Simply the Best
                                                                                                              • Group Three—Shelf Stalkers
                                                                                                                • Group Four—Habitual Shoppers
                                                                                                                  • Group Five—Individualists
                                                                                                                  • Marketing Strategies

                                                                                                                    • Strategy: Allow users to reimagine vehicle via Batman franchise
                                                                                                                      • Strategy: Targeting young buyers through talent contest
                                                                                                                        • Strategy: Launching website to build community among owners
                                                                                                                          • Strategy: Zombie-inspired novelty cars used to target young buyers
                                                                                                                            • Strategy: Emphasizing trust in exchange, no-haggling promotions
                                                                                                                              • Strategy: Position the vehicle’s fuel efficiency against the competition
                                                                                                                                • Figure 43: Chevrolet Cruze Amazing Car TV ad, July 2012
                                                                                                                              • Strategy: Shaping driver testimonial as impromptu press conference
                                                                                                                                • Figure 44: Classic Funny Quirky Ford TV ad, November 2011
                                                                                                                              • Strategy: Creating a striking visual to emphasize fuel efficiency
                                                                                                                                • Figure 45: “Legendary” Toyota TV ad, September 2012
                                                                                                                              • Strategy: Emphasizing male component of vehicle through comedy, action
                                                                                                                                • Figure 46: “Back and Better” Volkswagen Beetle ad, February 2012
                                                                                                                            • New Vehicle Ownership/Lease

                                                                                                                              • Key points
                                                                                                                                • Majority of households own midsized cars, followed by small cars
                                                                                                                                  • Figure 47: Small, midsized, full-sized car ownership or lease, June 2012
                                                                                                                                • More households with SUVs/CUVs than trucks
                                                                                                                                  • Figure 48: SUV/CUV, truck, van, minivan ownership or lease, June 2012
                                                                                                                                • Small car, midsized car ownership highest among youngest respondents
                                                                                                                                  • Figure 49: Small, midsized, full-sized car ownership or lease, by age, June 2012
                                                                                                                                  • Figure 50: SUV/CUV, truck, van, minivan ownership or lease, by age, June 2012
                                                                                                                                • SUV/CUV ownership, leasing highest among wealthiest households
                                                                                                                                  • Figure 51: Small, midsized, full-sized car ownership or lease, by household income, June 2012
                                                                                                                                  • Figure 52: SUV/CUV, truck, van, minivan ownership or lease, by household income, June 2012
                                                                                                                              • Anticipated Age of Vehicle to Purchase Next

                                                                                                                                • Key points
                                                                                                                                  • About 40% of respondents say next vehicle will be new
                                                                                                                                    • Figure 53: Anticipated age of vehicle to purchase next, by gender, June 2012
                                                                                                                                  • Preference for purchasing new increases with age
                                                                                                                                    • Figure 54: Anticipated age of vehicle to purchase next, by age, June 2012
                                                                                                                                  • Respondents from $50K+ households most likely to consider purchasing new
                                                                                                                                    • Figure 55: Anticipated age of vehicle to purchase next, by household income, June 2012
                                                                                                                                  • About half of married respondents considering purchasing new vehicle
                                                                                                                                    • Figure 56: Anticipated age of vehicle to purchase next, by marital/relationship status, June 2012
                                                                                                                                  • Suburban respondents most likely to consider purchasing, leasing new
                                                                                                                                    • Figure 57: Anticipated age of vehicle to purchase next, by urban status, June 2012
                                                                                                                                • When New Car Will Be Purchased

                                                                                                                                  • Key points
                                                                                                                                    • One third of respondents planning to purchase in two years or more
                                                                                                                                      • Figure 58: When new car will be purchased, by gender, June 2012
                                                                                                                                    • Those aged 18-34 most likely to plan purchasing sooner than later
                                                                                                                                      • Figure 59: When new car will be purchased, by age, June 2012
                                                                                                                                    • Waiting to purchase two years or more relatively even among all earners
                                                                                                                                      • Figure 60: When new car will be purchased, by household income, June 2012
                                                                                                                                    • Millennial respondents most likely to say they will purchase less than a year
                                                                                                                                      • Figure 61: When new car will be purchased, by generation, June 2012
                                                                                                                                  • Type of New Vehicle Intending to Buy

                                                                                                                                    • Key points
                                                                                                                                      • One third of respondents intend to purchase midsized cars
                                                                                                                                        • Figure 62: Type of new vehicle intending to buy, by gender, June 2012
                                                                                                                                      • Small cars appeal most to youngest respondents
                                                                                                                                        • Figure 63: Type of new vehicle intending to buy, by age, June 2012
                                                                                                                                      • Highest earners least likely to intend to purchase small cars
                                                                                                                                        • Figure 64: Type of new vehicle intending to buy, by household income, June 2012
                                                                                                                                      • Small-car preference dominated by urban respondents
                                                                                                                                        • Figure 65: Type of new vehicle intending to buy, by urban status, June 2012
                                                                                                                                    • Reasons For Not Purchasing New Cars

                                                                                                                                      • Key points
                                                                                                                                        • More than one third of respondents say they can’t afford buying new
                                                                                                                                          • Figure 66: Reasons for not purchasing new cars, by gender, June 2012
                                                                                                                                        • More than half of those 18-24 most likely to say they can’t afford buying new
                                                                                                                                          • Figure 67: Reasons for not purchasing new cars, by age, June 2012
                                                                                                                                        • Inability to afford reaches to middle/upper-income households
                                                                                                                                          • Figure 68: Reasons for not purchasing new cars, by household income, June 2012
                                                                                                                                        • Affordability greatest obstacle for urban, rural respondents
                                                                                                                                          • Figure 69: Reasons for not purchasing new cars, by urban status, June 2012
                                                                                                                                      • How Consumers Research Vehicles

                                                                                                                                        • Key points
                                                                                                                                          • Family, friends top preference for buyers when researching new vehicles
                                                                                                                                              • Figure 70: Information sources considered useful when deciding on a new vehicle, by gender, June 2012
                                                                                                                                            • Younger respondents more reliant on family, friends
                                                                                                                                                • Figure 71: Information sources considered useful when deciding on a new vehicle, by age, June 2012
                                                                                                                                              • Auto shows stand out for lowest-income households
                                                                                                                                                  • Figure 72: Information sources considered useful when deciding on a new vehicle, by household income, June 2012
                                                                                                                                              • Reasons For Purchasing New Vehicles

                                                                                                                                                • Key points
                                                                                                                                                  • Better fuel economy most preferred reason that motivates purchasing
                                                                                                                                                    • Figure 73: Reasons likely to motivate the purchase of a new vehicle, by gender, June 2012
                                                                                                                                                  • New technology, safety, style preferred most by youngest respondents
                                                                                                                                                    • Figure 74: Reasons likely to motivate the purchase of a new vehicle, by age, June 2012
                                                                                                                                                  • Technology motivates respondents from wealthiest households
                                                                                                                                                    • Figure 75: Reasons likely to motivate the purchase of a new vehicle, by household income, June 2012
                                                                                                                                                  • Better fuel economy top motivation for parents with children 18+
                                                                                                                                                    • Figure 76: Reasons likely to motivate the purchase of a new vehicle, by parents and age of children, June 2012
                                                                                                                                                • Impact of Gas Prices on Purchasing

                                                                                                                                                  • Key points
                                                                                                                                                    • About 45% of respondents say gas prices are not a factor in buying new
                                                                                                                                                      • Figure 77: Impact of gas prices on purchasing, by gender, June 2012
                                                                                                                                                    • Respondents aged 45+ most likely to not be concerned about gas
                                                                                                                                                      • Figure 78: Impact of gas prices on purchasing, by age, June 2012
                                                                                                                                                    • Gas prices least likely to impact buying by wealthiest households
                                                                                                                                                      • Figure 79: Impact of gas prices on purchasing, by household income, June 2012
                                                                                                                                                    • Urban dwellers less concerned about gas prices in buying
                                                                                                                                                      • Figure 80: Impact of gas prices on purchasing, by urban area, June 2012
                                                                                                                                                  • Features Impacting New Vehicle Purchasing

                                                                                                                                                    • Key points
                                                                                                                                                      • Fuel efficiency top attribute in vehicle buying, leasing decision
                                                                                                                                                        • Figure 81: Features impacting new vehicle purchasing, by gender, June 2012
                                                                                                                                                      • Infotainment systems resonate for wealthiest homes
                                                                                                                                                        • Figure 82: Features impacting new vehicle purchasing, by household income, June 2012
                                                                                                                                                      • Number of seats, cargo room most important for parents of young kids
                                                                                                                                                        • Figure 83: Features impacting new vehicle purchasing, by parents with children and age, June 2012
                                                                                                                                                    • How Last Vehicle Was Paid For

                                                                                                                                                      • Key points
                                                                                                                                                        • One third paying for new, used, leased vehicle in cash
                                                                                                                                                          • Figure 84: How last vehicle was paid for, by gender, January 2011-March 2012
                                                                                                                                                        • Middle-age respondents, favor cash and bank loans
                                                                                                                                                          • Figure 85: How last vehicle was paid for, by age, January 2011-March 2012
                                                                                                                                                        • Respondents from lowest-earning households most likely to pay in cash
                                                                                                                                                          • Figure 86: How last vehicle was paid for, by household income, January 2011-March 2012
                                                                                                                                                      • Impact of Race and Hispanic Origin

                                                                                                                                                        • Key points
                                                                                                                                                          • White respondents most likely to own SUV/CUVs, trucks
                                                                                                                                                            • Figure 87: Small, midsized, full-sized car ownership or lease, by race/Hispanic origin, June 2012
                                                                                                                                                            • Figure 88: SUV/CUV, truck, van, minivan ownership or lease, by race/Hispanic origin, June 2012
                                                                                                                                                          • Asian respondents most likely to purchase new, not used, vehicle
                                                                                                                                                            • Figure 89: Anticipated age of vehicle to purchase next, by race/Hispanic origin, June 2012
                                                                                                                                                          • Black respondents more likely than others to purchase new within six months
                                                                                                                                                            • Figure 90: When new car will be purchased, by race/Hispanic origin, June 2012
                                                                                                                                                          • One third of black, white, Hispanics intend to buy midsized car
                                                                                                                                                            • Figure 91: Type of new vehicle intending to buy, by race/Hispanic origin, June 2012
                                                                                                                                                          • Half of black respondents cannot afford to buy a new vehicle
                                                                                                                                                            • Figure 92: Reasons for not purchasing new vehicles, by race/Hispanic origin, June 2012
                                                                                                                                                          • Articles/reviews most preferred by Asian respondents
                                                                                                                                                            • Figure 93: Information sources considered useful when deciding on a new vehicle, by race/Hispanic origin, June 2012
                                                                                                                                                          • Asian, Hispanic respondents more motivated by good financing
                                                                                                                                                            • Figure 94: Reasons likely to motivate the purchase of a new vehicle, by race/Hispanic origin, June 2012
                                                                                                                                                          • White respondent buying decisions least impacted by gas prices
                                                                                                                                                            • Figure 95: Impact of gas prices on purchasing, by race/Hispanic origin, June 2012
                                                                                                                                                          • Hispanics’ larger families reflected in preference for more seats
                                                                                                                                                            • Figure 96: Features impacting new vehicle purchasing, by race/Hispanic origin, June 2012
                                                                                                                                                          • Hispanic respondents most likely to pay for vehicle in cash
                                                                                                                                                            • Figure 97: How last vehicle was paid for, by race/Hispanic origin, January 2011-March 2012
                                                                                                                                                        • Appendix—Other Useful Tables

                                                                                                                                                          • Anticipated age of proposed vehicle purchase
                                                                                                                                                            • Figure 98: Anticipated age of vehicle to purchase next, by region, June 2012
                                                                                                                                                          • Type of new vehicle intending to buy
                                                                                                                                                            • Figure 99: Type of new vehicle intending to buy, by marital status, June 2012
                                                                                                                                                            • Figure 100: Type of new vehicle intending to buy, by region, June 2012
                                                                                                                                                          • Impact of gas prices on purchasing new cars
                                                                                                                                                            • Figure 101: Impact of gas prices on purchasing new cars, by region, June 2012
                                                                                                                                                          • Features impacting new vehicle purchasing
                                                                                                                                                            • Figure 102: Features impacting new vehicle purchasing, by age, June 2012
                                                                                                                                                            • Figure 103: Features impacting new vehicle purchasing, by region, June 2012
                                                                                                                                                        • Appendix – Brand Research

                                                                                                                                                            • Figure 104: Brand usage, August 2012
                                                                                                                                                            • Figure 105: Brand commitment, August 2012
                                                                                                                                                            • Figure 106: Brand momentum, August 2012
                                                                                                                                                            • Figure 107: Brand diversity, August 2012
                                                                                                                                                            • Figure 108: Brand satisfaction, August 2012
                                                                                                                                                            • Figure 109: Brand recommendation, August 2012
                                                                                                                                                            • Figure 110: Brand attitude, August 2012
                                                                                                                                                            • Figure 111: Brand image – macro image, August 2012
                                                                                                                                                            • Figure 112: Brand image – micro image, August 2012
                                                                                                                                                            • Figure 113: Profile of target groups, by demographics, August 2012
                                                                                                                                                            • Figure 114: Psychographic segmentation, by target groups, August 2012
                                                                                                                                                            • Figure 115: Brand usage, by target groups, August 2012
                                                                                                                                                          • Brand index
                                                                                                                                                            • Figure 116: Brand index, August 2012
                                                                                                                                                        • Appendix—Trade Associations

                                                                                                                                                          Companies Covered

                                                                                                                                                          • American Honda Motor Co., Inc.
                                                                                                                                                          • BMW of North America, LLC
                                                                                                                                                          • Digg Inc
                                                                                                                                                          • Facebook, Inc.
                                                                                                                                                          • Ford Motor Company (USA)
                                                                                                                                                          • Hyundai Motor America
                                                                                                                                                          • Kia Motors America, Inc.
                                                                                                                                                          • Nissan North America, Inc.
                                                                                                                                                          • Toyota Motor Corporation USA
                                                                                                                                                          • Twitter, Inc.
                                                                                                                                                          • Volkswagen AG
                                                                                                                                                          • Volkswagen of America, Inc.
                                                                                                                                                          • YouTube, Inc.

                                                                                                                                                          New Cars - US - October 2012

                                                                                                                                                          £3,199.84 (Excl.Tax)