“Despite ongoing economic and automotive market challenges, consumers still indicate an interest in purchasing a car. Although this may be aspirational for some, it is essential for retailers to maintain a strong presence across all channels to capture the interest of potential buyers. Looking ahead, dealerships must adapt their sales strategies and offerings to meet the evolving needs of consumers, prioritizing comfort and convenience in the purchasing process.”
– Gabe Sanchez, Automotive Analyst
This Report looks at the following areas
- The impact of current economic influences and automotive market conditions on the car purchasing process
- Consumers’ research approach when shopping for a car
- Perceptions of vehicle retailers
- How consumers view the future of car buying and the dealership experience
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Overview
- What you need to know
- This Report looks at the following areas
- Definition
- Market context
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Executive Summary
- Top Takeaways
- Consumer trends
- Despite economic and automotive market conditions, consumers are still interested in purchasing cars
- Figure 1: vehicle purchase time frame, by generation, 2023
- Auto brands and retailers need to leverage omnichannel strategies to best reach consumers
- Figure 2: Research approach for next vehicle, by generation, 2023
- Information must be readily available across sources
- Figure 3: Types of information researched, by generation, 2023
- Vehicle retailers must continue efforts to improve perceptions
- Figure 4: Perceptions of vehicle retailers, 2023
- Consumers call for various evolutions to the dealership experience
- Figure 5: Dealership expectations, by generation, 2023
- Competitive strategies
- CarMax provides upfront financing, added personalization
- Figure 6: CarMax highlights pre-qualification feature
- Mercedes-Benz rethinks its showrooms
- Figure 7: Mercedes-Benz explores showroom design
- Local dealers highlight NIL deals
- Figure 8: Will Levis partnered with local dealership Paul Miller Ford
- Hyundai leverages TikTok trends
- Figure 9: Hyundai launches a choose-your-own adventure campaign titled “Choose Yours”
- Market predictions
- Figure 10: Total US unit sales and forecast of new and used vehicles, 2017-27
- Figure 11: Automotive industry outlook, 2023-28
- Opportunities
- Consumers’ research approach highlights the need for an omnichannel presence
- Evolve the role of dealerships
- Align with the offerings of online car shopping
- Reach multicultural consumers through CPO programs, flexible subscriptions
- Appeal to parents’ need for convenience
- Drive comfortability, trust among female consumers
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Market Size and Forecast
- Economic influences and supply chain disruptions threaten sales
- Figure 12: Total US unit sales and forecast of new and used vehicles, 2017-27
- Figure 13: Total US unit sales and forecast of new and used vehicles, 2017-27
- Economic influences and supply chain disruptions threaten sales
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Market Drivers
- Consumer confidence edges up but remains suppressed
- Figure 14: Consumer Sentiment Index and unemployment, 2000-23
- Prices of new and used vehicles present barriers, especially for emerging consumer segments
- Figure 15: Consumer Price Index, new vehicles and used vehicles – Seasonally adjusted, 2018-23
- Emerging consumer segments present opportunities for auto brands and retailers
- Figure 16: Population, by generation, 2017-27
- Figure 17: Population by race and Hispanic origin, 2017-27
- Current gas prices could push consumers away from purchasing a vehicle
- Figure 18: US gasoline and diesel retail prices, 2007-23
- Electric vehicle tax credits present opportunity
- Consumer confidence edges up but remains suppressed
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Competitive Strategies and Market Opportunities
- CarMax showcases upfront financing info
- The opportunity: Transparency and personalization at the dreaded financing stage
- Figure 19: CarMax highlights pre-qualification feature
- Online shopping drives Mercedes-Benz to rethink its showrooms
- The opportunity: Explore omnichannel formats
- Figure 20: Mercedes-Benz explores showroom design
- Dealers leverage NIL deals
- The opportunity: Leverage NIL deals to drive appeal locally
- Figure 21: Will Levis partnered with local dealership Paul Miller Ford
- Figure 22: CJ Stroud featured on Sarchione Auto Gallery social media channels
- Hyundai leverages TikTok to reach emerging consumer segments
- The opportunity: Find creative ways to leverage social media
- Figure 23: Hyundai launches a choose-your-own adventure campaign titled “Choose Yours”
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The Car Consumer – Fast Facts
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Purchase Time Frame and Consideration
- Multicultural and younger consumers are the most interested in short-term purchasing
- Figure 24: Vehicle purchase time frame, by generation, 2023
- Figure 25: Vehicle type consideration, by generation, 2023
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- Figure 26: Vehicle purchase time frame, by race and Hispanic origin, 2023
- Figure 27: Vehicle type consideration, by race and Hispanic origin, 2023
- Parents pushed to purchase to accommodate their evolving needs
- Figure 28: vehicle purchase intent, by parental status, 2023
- Figure 29: vehicle type consideration, by parental status, 2023
- Multicultural and younger consumers are the most interested in short-term purchasing
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Research Approach
- Multichannel approach provides the greatest reach
- Figure 30: Research approach for next vehicle, by generation, 2023
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- Figure 31: TURF Analysis – Research Behaviors, 2023
- Female consumers emphasize in-person research, look to those they trust
- Figure 32: Outer highlights its neighborhood showroom program
- Figure 33: Research approach for next vehicle, by gender, 2023
- Parents leverage online research
- Figure 34: Research approach for next vehicle, by parental status, 2023
- Multichannel approach provides the greatest reach
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Types of Information Researched
- Consumers show a high degree of effort in their research
- Figure 35: Types of information researched, by generation, 2023
- Female consumers seek value, safety
- Figure 36: Mercedes-Benz highlights a commitment to equality though safety
- Figure 37: Types of information researched, by gender, 2023
- Multicultural consumers indicate a more limited degree of research
- Figure 38: Types of information researched, by race and Hispanic origin, 2023
- Consumers show a high degree of effort in their research
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Perceptions of Vehicle Retailers
- Perceptions drive consumers’ choice in vehicle retailers
- Figure 39: Perceptions of vehicle retailers, 2023
- Traditional retailers must evolve to meet Millennial consumers
- Figure 40: Perceptions of vehicle retailers – Convenient, by generation, 2023
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- Figure 41: Perceptions of vehicle retailers – Transparent, by generation, 2023
- Creating a trustworthy and comfortable purchasing experience is critical
- Figure 42: Perceptions of vehicle retailers – Intimidating, by gender, 2023
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- Figure 43: Perceptions of vehicle retailers – Trustworthy, by gender, 2023
- Perceptions drive consumers’ choice in vehicle retailers
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Evolution of Dealerships
- Consumers across generations hold varying wants
- Figure 44: Dealership experiences, by generation, 2023
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- Figure 45: Future dealership expectations, by generation, 2023
- Negative past experiences contribute to females’ desire for change
- Figure 46: Dealership experiences, by gender, 2023
- Figure 47: Future dealership expectations, by gender, 2023
- Parents seek a convenient dealership, purchasing experience
- Figure 48: Dealership experiences, by parental status, 2023
- Figure 49: Future dealership expectations, by parental status, 2023
- Consumers across generations hold varying wants
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Future of Car Buying
- Consumers expect the future of car buying to evolve
- Figure 50: Future of car buying – Convenience, by generation, 2023
- Multicultural consumers foresee convenient offerings
- Figure 51: Future of car buying – convenience, by gender, 2023
- Consumers expect automotive market shifts
- Figure 52: Future of car buying – Automotive outlook, by generation, 2023
- Female consumers are more critical of vehicle prices
- Figure 53: Future of car buying – Automotive outlook, by gender, 2023
- Consumers expect the future of car buying to evolve
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
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Appendix – The Consumer
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- Figure 54: Time spent researching, by generation, 2023
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