Tl Cars Online 09 10

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<ul><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 1/32</p><p>Automotive the way we see it</p><p>Cars Online 09/10</p><p>Understanding Consumer Buying Behavior</p><p>in a Volatile Market</p></li><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 2/32</p><p>Contents</p><p>Introduction 2</p><p>Executive Summary 3</p><p>Developing Markets: Buying Trends Evolve Rapidly 5</p><p>How Consumers Buy: Target Your Marketing Mix 8</p><p>Green Vehicles: A Force for the Future 11</p><p>The Role of the Web: Consumer Usage Pattern Emerges 14</p><p>Online Buying: No Hassles, No Negotiations 17</p><p>Customer Interaction: Loyalty and Satisfaction Rates Improve 20</p><p> Aftersales/Servicing: Focusing on the Post-Sale Experience 24</p><p>Conclusion and Recommendations 27</p></li><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 3/32</p><p>This years report focuses on bothmature and developing markets. Theresearch involved more than 3,000consumers in Brazil, China, France,Germany, India, Russia, the United</p><p>Kingdom and the United Sates.</p><p>In this edition we take a deeper lookat top-of-mind issues such as onlinebuying of vehicles andparts/accessories, alternative-fuelvehicles and aftersales/servicing. Inaddition, we asked consumers tothink about the biggest changes theyexpect to make in how they shop forand buy vehicles in the coming years.Their responses provide valuableinsight into consumer expectations</p><p>about the future of the vehicle buyingprocess. Look for their direct quotesthroughout the report.</p><p>We hope that the findings ofCarsOnline 09/10 will provide automotivemanufacturers and dealers withinsights into changing consumerdynamics in both mature anddeveloping markets, and will help theindustry gain a better understandingof consumer buying behavior in</p><p>todays turbulent climate.</p><p>Mergers and acquisitions. Bankruptcyfilings. Government intervention.</p><p>Vehicle scrapping and rebateprograms. The past 12 months havebrought fundamental changes to the</p><p>automotive industry around the globe.</p><p>Last year ushered in an unprecedentedglobal downturn that originated in2007. What started as a financialcrisis soon expanded into the largereconomy, affecting mature anddeveloping markets alike. Theautomotive industry has been one ofthe hardest-hit sectors. The downturnhas led most automotive businesses toput in place initiatives aimed at short-term survival and mid-term stability</p><p>with the focus largely on cost cuttingand cash preservation. Tomorrowswinners, however, will shift theirfocus to longer-term prosperity withthe emphasis on future differentiationand competitive advantage.</p><p>To achieve this objective and regaintheir footing, automotive companiesmust have a deep understanding ofconsumer buying behavior. CarsOnline 09/10 Capgeminis 11th</p><p>annual global automotive study aims to provide insight into howconsumers shop for vehicles, whatleads them to buy and what they arereally looking for from the full vehiclelifecycle experience.</p><p>Cars Online 09/10 2</p><p> Automotive the way we see it</p><p>Introduction</p><p>I believe the whole car industry will soon look verydifferent. Those companies owned by the government andunions will be bust. Those that listen to the public and</p><p>offer value, fair prices and the right features willprosper.</p><p>U.S. consumer</p></li><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 4/32</p><p>With vehicle sales suffering in mostmarkets today and automotivecompanies focused on cost cuttingand cash preservation, its easy to takeyour eye off the consumer. But, in a</p><p>climate characterized by volatility,consumer insight is more importantthan ever as buying behavior patternsevolve rapidly. How do car buyersresearch vehicles? What types of carsare they looking for? What triggersthem to buy? Where and how dothey want to buy? How do they wantto communicate with manufacturersand dealers?</p><p>Capgeminis Cars Online research aimsto answer these questions and more to</p><p>provide insight that can helpautomotive companies respond fasterand more effectively to changingconsumer needs and demands.</p><p>Key Findings</p><p>The research uncovered a number ofkey findings:</p><p>1 Usage of the web as a keyinformation source during thevehicle buying process has become</p><p>pervasive across most markets.Almost 90% of consumers today usethe Internet to research vehicles, upfrom 61% in 2005. A clear onlineusage pattern has emerged, withconsumers turning initially to searchengines, which jumped up the list ofinformation sources this year; then tomanufacturer and dealer sites forfactual information about vehicles,prices and availability; and finally toconsumer-to-consumer tools likediscussion sites for qualitativeinformation and opinions.</p><p>The ability to interact online and holdreal-time discussions with automotive</p><p>environment as the primary reason:26%, up from 19% the previous year.This trend was particularly evident inthe U.S.</p><p>4 Improvements in brand anddealer loyalty and overallsatisfaction with the buying processbode well for the industry. Withplenty of bad news for automotivecompanies these days, our researchuncovered a bit of good news. Morethan two-thirds of respondents saidthey were likely to purchase the samemake/brand as their current vehicle,up from 61% last year. Similarly,dealer loyalty also rose, with 63% ofconsumers saying they were likely to</p><p>purchase from the same dealer wherethey bought their current car, up from59% the year before.</p><p>Satisfaction with the overall buyingprocess was also up somewhat.However, consumer approval wasmore muted in the mature markets,demonstrating that there is still workto be done to improve the customerexperience in the U.S. and WesternEurope.</p><p>5 Developing markets show earlysigns of trending toward maturemarkets, as consumers in the BRICcountries become more familiarwith buying cars. For example, thisyear the gap between the factors thatimpact vehicle decisions in mature vs.developing markets was muchsmaller. Greater convergence willlikely still take a number of years, andmarket differences will remain forsome time. For instance, maturemarkets increasingly look forinformation online, whereasdeveloping markets are still keen toget information from more traditional</p><p>3</p><p>Executive Summary</p><p>experts or other consumers in-marketis an important trend, which grewstrongly this year. Traditionalinformation sources such as TVadvertising remain important in</p><p>developing countries, however, andshould be part of the marketing mix.</p><p>2 Consumers want to buy vehiclesand parts and accessoriesonline as they look for lower pricesand an alternative to the traditionaldealer model. Nearly 40% ofrespondents said they would like tobuy a car over the Internet (thecomplete end-to-end process) and halfwould buy parts and accessories.</p><p>While lower price is the leading</p><p>reason, many respondents said theysimply did not want to negotiate priceor interact with the dealer in person.Consumers seem to be polarized intheir desire to negotiate: about one-quarter wanted the ability to negotiatea better deal, but another one-quarterfelt this was something they preferredto avoid.</p><p>3 Green vehicle ownershipcontinues to rise asenvironmental concerns grow.Consumers indicate a growingconfidence in their understanding ofso-called green vehicles. Thisincreased knowledge is influencingbuying decisions. In this years study,41% of consumers said they currentlyown a fuel-efficient or alternative-fuelvehicle, up from 36% the year before.</p><p>Another 30% said they plan to buy afuel-efficient or alternative-fuel vehicle.</p><p>Interestingly, the reasons behind thesebuying decisions are evolving. Whilefuel economy remains the leadingdriver, a growing number ofrespondents named impact on the</p></li><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 5/32Cars Online 09/10 4</p><p> Automotive the way we see it</p><p>sources such as TV advertising andtrade shows. And mature marketsfocus on permanent value whenchoosing a vehicle, whereasdeveloping markets show greater</p><p>interest in more transactionalmarketing such as cash-back bonuses.</p><p>Now is the time for automotivecompanies to focus attention onproviding a positive customerexperience in developing countrieswhile loyalty and satisfaction levelsremain higher than in maturemarkets.</p><p>6</p><p>As the duration of the vehiclebuying cycle contracts,</p><p>automotive companies have lesstime to influence purchases.Consumers today can quickly andeasily get vast amounts of informationabout the vehicles they are interestedin, resulting in a shrinking buyingcycle. What used to take six months isnow likely to take only four, withshowroom visits coming ever closer tothe point of purchase. More than two-thirds of respondents begin theresearch process two to four months</p><p>before they plan to buy and 60% visitthe showroom for the first time withintwo months of purchase.</p><p>Connecting with shoppers during theresearch period and providing themwith the right tools and information iscritical in influencing buyingdecisions. By the time they visit theshowroom it is often too late.</p><p>7</p><p>Consumers want the car buyingprocess to be easier and faster.</p><p>A number of indicators point to agrowing desire for improved ease andspeed of transaction. For example,more consumers expect a dealer or</p><p>Many of the formalities of car purchases will soon be a</p><p>thing of the past. The selection and purchase process willbe faster, easier and nicer.</p><p>Russian consumermanufacturer to respond to an onlineinquiry within four hours. In China,consumers are even more demanding,with more than half expecting aresponse within an hour. In addition,</p><p>almost one-quarter of respondentspoint to ease and speed of transactionas the key reason for buying a vehicleonline, and 30% say it is the drivingfactor behind their desire to purchaseparts and accessories over the web. Itis important to note that most of thesefactors leading to consumerfrustration seem to be down to poorbasic management and are in theindustrys own hands to resolve.</p><p>8Less than half of consumers</p><p>with cars still in-warranty havetheir vehicles serviced at thepurchasing dealership. Thisrepresents a significant missedaftersales opportunity for dealers.</p><p>And it may also impact repurchasedecisions, as consumers tend to bemore likely to buy their next vehiclefrom the servicing dealer rather thanthe prior purchasing dealer.</p><p>While this topline review provides a</p><p>summary of key findings from thisyears Cars Online study, the sectionsthat follow offer more in-depth dataand analysis focused on key topicssuch as buying behavior patterns, webusage, online buying, customerinteraction and aftersales/servicingexpectations.</p><p>About the Study</p><p>Capgemini worked with SmartRevenue,</p><p>a Ridgefield, Connecticut-based</p><p>research firm, to conduct the survey for</p><p>Cars Online 09/10. All analysis and</p><p>interpretation of the data has been</p><p>made by Capgemini in collaboration</p><p>with the Car Internet Research Program</p><p>(CIRP) of the University of Ottawa,</p><p>Canada. In total, more than 3,000</p><p>consumers were surveyed in eight</p><p>countries: Brazil, China, France,</p><p>Germany, India, Russia, the United</p><p>Kingdom and the United States.</p><p>The composition of the consumer</p><p>sample in each country was based on</p><p>projectable national samples</p><p>representative of the population in termsof region, age and gender. All</p><p>consumers surveyed were in-market</p><p>(24% plan to buy or lease a vehicle</p><p>within three months; 29% in four to six</p><p>months; 11% in seven to nine months;</p><p>and 36% in 10 to 12 months).</p></li><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 6/325</p><p>Developing Markets: Buying Trends</p><p>Evolve RapidlyDeveloping markets are not alike in every respect, as our research identifiesvariances in buying behavior from one country to another.</p><p>Dont Call Them Emerging</p><p>On a recent visit to a large Chineseautomotive manufacturer, wediscussed the market and its potential.During the conversation, a company</p><p>executive took issue with the termemerging, often used to describe theChinese market. He noted that giventhe size and growth of the automotivebusiness in his country, emerginghardly seemed accurate anymore.</p><p>We took his point. This year we referto the BRIC countries as developingmarkets, because as the Chineseexecutive pointed out, these marketshave already emerged.</p><p>In this years study we again trackconsumer buying behavior in thedeveloping markets of Brazil, Russia,India and China. The findings fromthe four BRIC countries offer a glimpseof how these dynamic and growingautomotive markets are evolving.</p><p>The developing markets have seenstrong vehicle sales growth in recentyears. However, just like the maturemarkets, they have suffered somewhatin the past 12 months. For example,</p><p>according to the Association ofEuropean Businesses, Russian carsales fell by 49% in the first half of2009, and a similar drop is projectedfor the second half of the year. InBrazil, ANFAVEA (the BrazilianNational Association of Motor VehicleManufacturers) expects car sales to fallthis year for the first time since 2003.1</p><p>The picture is brighter in China andIndia. Nevertheless, the potential forsignificant long-term growth remainsstrong in all four markets.</p><p>Following are some of the key trendsnoted in the developing regions.</p><p>Additional variances by market arediscussed throughout the full report.</p><p>Signs of Convergence Appear</p><p>This year we found early signs ofconvergence in Russia, Brazil andIndia as consumers in these marketsbecome more familiar with buyingcars. As a result, some of the trends</p><p>are beginning to move closer towardthose in the mature markets. We haveseen a similar rationalization in Chinain recent years too.</p><p>For example, this year the gapbetween the factors that impactvehicle decisions in mature vs.developing markets was muchsmaller. Last year, consumers in theBRIC countries tended to rate all ofthe factors as more important thandid respondents in mature markets.This year, the numbers were much</p><p>1 April car sales in Brazil fall 13.7% from the previous</p><p>month,</p><p>sales-in-brazil-fall-13.7-from-the-previous-month,</p><p>May 8, 2009</p></li><li><p>8/8/2019 Tl Cars Online 09 10</p><p> 7/32Cars Online 09/10 6</p><p> Automotive the way we see it</p><p>closer to those in the mature markets,with the exception of short-termfactors such as low financing andcash-back incentives, which are stillmore important in developing</p><p>countries than in mature markets.</p><p>Customer loyalty and online buyingtrends also show signs of convergence,with slight declines in some of thedeveloping markets as they begin tomove closer to the levels typicallyseen in the mature markets.</p><p>The shift toward convergence isparticularly pronounced in Russia,where many vehicle buying patternsresemble those in western markets, a</p><p>trend that was apparent last year aswell. For example, Russian consumersare more likely than those in the otherdeveloping markets to rely on web-based information sources and less soon traditional sources such as TVadvertising and auto shows. This patternmirrors consumer behavior in themature markets, particularly the U.S.</p><p>A similar trend is apparent in the typeof vehicle consumers plan to buy.</p><p>Russian respondents are more likelythan their counterparts in the otherBRIC countries to want to buy a usedvehicle, no doubt helped by recentgovernment tax changes. About one-quarter said they plan to buy a usedcar, which is about the same as thenumber in the U.S. The stronger usedcar market in both the...</p></li></ul>