Topic: industry insights
Before the COVID-19 pandemic hit, car dealers were already facing questions about what the future of the industry would look like. With consumers’ preferences changing and advancements in digital retailing strategies continuing to be made, many have been at least starting to think about tactics like online financing and home delivery. But the current health crisis has accelerated many of these trends, and today’s dealers must adapt to a new normal.
Like most businesses across the country, dealers have been taking proactive steps to ensure consumers’ safety at the dealership, rearranging showroom layouts to support social distancing, increasing cleaning measures, and more. According to CarGurus COVID-19 Sentiment Study, among current prospective buyers, top expectations for dealer visits to purchase or service a vehicle include:
Whether it’s due to a vehicle breaking down, a new commute, a growing family, or any number of reasons, a vehicle purchase is essential for many. That’s held true even during the current health crisis: 71% of those planning to buy this year cited the purchase as necessary, according to the CarGurus COVID-19 Sentiment Study in April. However, months later and our follow-up study found that about half (47%) of car shoppers aren’t as confident in their ability to afford a vehicle as a result of the pandemic.
As a result of consumers’ dwindling confidence, demand for financing is increasing. Before the pandemic, 47% of car buyers planned to finance their purchase. Now, 56% plan to or have already done so. Additionally, around one-third of those considering financing lost confidence in their ability to get approved (31%) and the financing rate they’d expect (34%).
As consumers emerge from lockdown, change travel plans, and reconsider what mobility will look like in the long-term, vehicles are becoming even more vital to everyday life, according to our latest COVID-19 Sentiment Study in Canada. In fact, nearly a third of those surveyed said they expect to use their car more going forward than before the pandemic.
In the near-term, 45% of respondents say they see their car as an escape or for fun. Additionally, 50% say they expect to use their car for more road trips or longer drives, while 73% of those planning to travel this year say they intend to drive, rather than fly, for at least one trip.
A month into the second half of the year, there are still questions about what recovery will look like for the auto industry. Our June COVID-19 Sentiment Study provided a glimpse into the new normal of car shopping — and the industry has taken note. Below are recent news stories that feature CarGurus’ latest data.
At CarGurus, we’re always looking for ways to share more industry insights with our valued dealers. Today, our Director of Automotive Industry Analysis, George Augustaitis, dives into the economic factors that could lead to Canada’s car shoppers buying more used vehicles.
“I didn’t think customers were going to buy a used car sight unseen. I really didn’t. I thought, there’s no way that’s going to happen. I’m happy to say I was wrong. And it’s not just a small trend, it’s a big trend.”
Last week, one of our Gurus, Audrey, had the chance to attend Google’s Think Auto 2019. The event was packed with interesting insights and takeaways for those in the automotive industry. One interesting topic that came up was the idea that changing customer desires and technological disruption are pushing the Canadian automotive industry to a competitive tipping point. In other words, to win in today’s market, dealers need to make data their competitive advantage.
At CarGurus, we’re always looking for ways to share more industry insights with our valued dealers. Today, our Director of Automotive Industry and Economic Analysis, George Augustaitis, takes a look at the ZEV landscape in Canada.
The Chevrolet Bolt and Nissan Leaf are poised to lead EV market in Canada
The Chevrolet Bolt and Nissan Leaf brands are both primed to take advantage of the new federal ZEV credit in Canada. Both vehicles are produced in the US and the days’ worth of supply for both vehicles is over 100. As of April 2019, Chevrolet Bolt had 191-days’ worth of supply and the Nissan Leaf had 128, meaning the US is well stocked and both OEMs can focus on shipping inventory to meet demand in Canada created by the ZEV federal program. This creates the fundamental base that will allow the brands to act quickly and take advantage of early demand of the ZEV program.
Every year, Canadian consumers change their shopping behaviour with the speed of a finely-tuned CASCAR champion. How do dealers reach and capture this constantly evolving market?
Like their counterparts in other parts of the world, Canadian consumers are time-starved and impatient. Whether their day includes a commute on the 401 or Granville Street, their time is short and their attention span is shrinking. According to the National Post, the average Canadian consumer has an attention span of just eight seconds, even less than a goldfish. The culprit? Portable devices.
The proof is evident in Canadian consumer visits to dealerships, which are now at 1.9, according to Google Think Auto. They’re spending even more time online, checking dealer websites, third-party reviews, OEM websites, and social media like Facebook, Twitter, and YouTube. Google also notes that 84 per cent intend to do more online research to further reduce their dealer visits next time they’re purchasing.
As Canadian car consumers continue their infatuation with the internet, dealers are sharpening their digital marketing tools to meet the expectations of these demanding consumers.
Leading the charge are the millennials, and with good reason. By 2020, it’s estimated that 40% of new car buyers will be millennials. And 88% of current millennials already use the internet to research a new car purchase.
Automakers have already felt the impact of this cohort. Millennials are less interested in test drives, preferring to do their research on social media and dedicated websites before they even step into a dealership. At that point, they’ve pretty much made up their mind.
But it’s not just millennials. An Ipsos survey for Canadian Black Book found that car buyers make only an average of two dealership visits. That’s a steep decline when compared with the half a dozen visits buyers made barely a decade ago.