US Car Purchasing Process Market Report 2023

Overview

• What you need to know
• This Report looks at the following areas
• Definition
• Market context

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

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

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

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”

The Car Consumer – Fast Facts

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
• • 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

Research Approach

• Multichannel approach provides the greatest reach
  • Figure 30: Research approach for next vehicle, by generation, 2023
• • 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

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

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
• • 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
• • Figure 43: Perceptions of vehicle retailers – Trustworthy, by gender, 2023

Evolution of Dealerships

• Consumers across generations hold varying wants
  • Figure 44: Dealership experiences, by generation, 2023
• • 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

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

Appendix – Data Sources and Abbreviations

• Data sources
• Sales data
• Forecast
• Consumer survey data
• Abbreviations and terms
• Abbreviations

Appendix – The Consumer

• • Figure 54: Time spent researching, by generation, 2023