Programme Framework

Marketing
Customer Needs & Selling

Technology

Finance
Outline of Costs & Profits

New Technologies

System

BTO System Key Issues

The Profitable 3DayCar

Measures & Roles

Environment

Organisation
Consumer New Car Buying

What the Customer Wants

New Car Buyer Behaviour Quantifying Key Stages & Activities in the Consumer Buying Process
Year End Conference, December 2000 Simon Elias

Contents

Research context & aims Method & response Results Conclusions

Consumer New Car Buying

Research Context

Managing demand Understanding influences on timing of

purchase decisions Validate current positions on consumer behaviour
complement qualitative research data triangulation

First major independent quantitative survey in this area

Consumer New Car Buying

Methodology

Self-completion questionnaire
13 questions prize draw incentive

c 3000 distributed to recent new

car buyers
12 months to October 2000

Selected ARM programme

dealers & 3DayCar sponsors
Consumer New Car Buying

Research Topics

Lead time expectations & experience Information sources Alternative specifications / service level Time of order placement, collection Time & lags between the key stages in the
buying process
decision to order, order to collection
inducements received for accepting alternatives

Consumer New Car Buying

Response

Excellent response rate 1,030 replies received & analysed Representative of UK new cars buyers
sex, age, car ownership, region

Good statistical base & validity

Consumer New Car Buying

Response: Brands Covered

Volume Citroen Fiat Ford Mazda Peugeot Toyota Rover Vauxhall VW Specialist: Alfa Romeo Audi BMW Jaguar Land Rover Lexus

Consumer New Car Buying

Respondent Region Profile

S ample
40 35 30 25

U K total drivers *

20 15 10 5 0 L on /S /S E W ales /S W es t Mids / E A n glia N E n glan d S c otlan d

Base: all respondents

* Lex/RAC Report on Motoring 1999

Consumer New Car Buying

Information Sources Used

indicate all sources used
Brochure Dealer sales staff Car magazine Friend, relative Newspaper ads TV ads TV programme WWW Which? Car shows
0 10 20 30 40 50 60 70

1 4 3 2
Rank the 3 most important

Base: all respondents

% of respondents

Consumer New Car Buying

Analysis

Age & Buying Information Sources

Norm

TV ads Car shows Which? Dealer sales staff WWW Newspaper ads Brochure Friend, relative TV programme Car magazine
20 40 60 80 100 120 140 160 180

55+ 35-55 25-35 u25

Index: 100 = Norm

Analysis

Sex & Buying Information Sources

Norm

T V ads C ar s hows W hic h? Dealer s ales s taff WWW News paper ads B roc hure F riend, relative T V programme C ar magazine
0 20 40 60 80 100 120

m ale fem ale

In dex: 100 = N orm

Length of Time from Initial Decision to Buy to Placing Order

11% < 2 weeks 20% 2 weeks - 1 mth 1 mth - 3 mths 25% >3 months

44%

Base: all respondents

Consumer New Car Buying

Analysis

Volume Brand & Length of Time from Decision to Order

VW Vauxhall T oyota R over P eugeot Mazda F ord F iat C itroen

0
Base: all respondents

more th an 3 mon th s 1 mon th to 3 mon th s 2 w eeks to 1 mon th les s th an 2 w eeks

Norm

20

40

60

80

100

120

140

160

180

In dex: 100 = Norm

Analysis

Specialist Brand & Length of Time from Decision to Order

Norm

L exus

L and R over

J aguar

B MW

Audi

Alfa R omeo

more th an 3 mon th s 1 mon th to 3 mon th s 2 w eeks to 1 mon th les s th an 2 w eeks

0 20 40 60 80 100 120 140 160 180

Base: all respondents

In dex: 100 = N orm

Length of Time from Placing Order to Delivery of Car

3%

19% 40%

less than 2 weeks 2 weeks to 1 month 1 month to 3 months

38%

more than 3 months

Base: all respondents

Consumer New Car Buying

Analysis

Region & Length of Time from Placing Order to Delivery of Car

Norm
more than 3 months

Scotland

North

1 month to 3 months 2 weeks to 1 month

Midlands

less than 2 weeks

Wales, SWest

London/S/SE
0 20 40 60 80 100 120 140 160 180 200

Index: 100=Norm

Analysis
VW Vauxhall Toyota Rover Peugeot Mazda Ford Fiat Citroen
0

Volume Brand & Length of Time from OTD Norm

more than 3 months 1 month to 3 months 2 weeks to 1 month less than 2 weeks

20

40

60

80

100

120

140

160

180

200

Index: 100 = Norm

Analysis

Specialist Brand & Length of Time from OTD

Norm
more than 3 months 1 month to 3 months 2 weeks to 1 month less than 2 weeks

Lexus

Land Rover

Jaguar

BMW

Audi

Alfa Romeo

20

40

60

80

100

120

140

160

180

200

220

240

Index: 100 = Norm

Importance of Waiting Time to Final Car Choice

65% 65% very or very or quite quite important important
7% 27% 28% not at all important not very important quite important 38% very important

Base: all respondents

Consumer New Car Buying

Analysis

Age & Importance of Waiting Time to Final Car Choice

Norm

very important

quite important

55+ 36-55

not very important

25-35 u25

not at all important

50

100

150

Base: all respondents

Index: 100 = Norm

Analysis

Brand & Importance of Waiting Time to Final Car Choice

volume specialist

very important

quite important

not very important

not at all important

10

20

30

Base: all respondents

Volume Citroen Fiat Ford Mazda Peugeot Toyota Rover 40 Vauxhall VW

Specialist: Alfa Romeo Audi BMW Jaguar Land Rover

50 Lexus

Volvo

Alternative Specification Taken

eg when first preference not available, would take too long, offered alternative in stock

Were Were alternatives alternatives specifications specifications taken? taken?

Base: all respondents

Yes Yes 24% 24% No No 76% 76%

Consumer New Car Buying

Analysis
VW Vauxhall Toyota Rover Peugeot Mazda Lexus Land Rover Jaguar Ford Fiat Citroen BMW Audi Alfa Romeo
20

Brand & Alternative Specification Taken

Norm

40

60

80

100

120

140

160

180

Base: all those taking alternative spec

Index: 100 = Norm

Analysis

Age, Sex & Alternative Specification Taken

Norm

55+

Sex
Females more likely to take alternative specification
INDEX Males: 94 Females: 109
20 40 60 80 100 120 140 160

36-55

25-35

<25

Index: 100 = Norm

Alternative Specification Taken

Mattered Index

Exterior options Body shape Interior options Engine size/type Colour, paint type
0
Base: all accepting alternative spec

88 122 98 110 105

10 20 30 40 50

% taking alternative spec

Consumer New Car Buying

Benefits Received for Accepting Alternative Specification Yes Yes 53.3% 53.3% No No 46.7% 46.7%
Consumer New Car Buying

(for taking alternative spec to (for taking alternative spec to preferred choice) preferred choice)

Were benefits Were benefits accepted? accepted?

Base: all those accepting alternative specification

Analysis
VW Vauxhall Toyota Rover Peugeot Mazda Lexus Land Rover Jaguar Ford Fiat Citroen BMW Audi Alfa Romeo
20

Brands & Benefits Received for Accepting Alternative Specification

Norm

40

60

80

100

120

140

160

180

Index: 100 = Norm

Benefits Received
for taking an alternative specification to preferred choice

After sales offer Good finance deal Better trade in price Spec upgrade New car discount
0
Base: all who received benefits due to alternative spec

10

15

20

25

30

35

40

% receiving benefit

Consumer New Car Buying

Day of Order & Collection

S u n day S atu rday F riday T h u rs day Wedn es day T u es day Mon day

Dealer survey: Dealer survey: Saturdays Saturdays lower (18%) lower (18%)

Dealer survey: Dealer survey: More on More on collections on collections on Saturday Saturday (29%) (29%)

Day of c ollec tion Day of order

0
Base: all respondents

10

15

20

25

30

35

% taking plac e on day

Consumer New Car Buying

Time of Day of Order & Collection

evening afternoon lunchtime morning
0
Base: all respondents

Time of collection Time of order

10

15

20

25

30

35

40

45

% taking place at time of day

Consumer New Car Buying

Number of Times Visited/Contacted Dealer

Average: Average: 3.5 times 3.5 times
4% 9% under 3 times 3 to 5 times 45% 5 to 7 times 42% more than 7 times
Base: all respondents

Consumer New Car Buying

Ideal Length of Time from Order to Delivery

5%
Cumulative Cumulative 1 week: 1 week: 19% 19% 2 weeks: 2 weeks: 61% 61% 3 weeks: 3 weeks: 83% 83% 4 weeks: 4 weeks: 95% 95%
Base: all respondents

12%

19%

up to 1 week 1 to 2 weeks

22% 42%

2 to 3 weeks 3 to 4 weeks 4 to 6 weeks

Consumer New Car Buying

Analysis

Ideal Length of Time OTD: Customer v Dealer Opinion

Dealer Opinion
up to 1 week
19% 5%

Customer
17%

1 to 2 weeks
22% 42%

39%

22%

2 to 3 weeks
34%

4 + weeks

61% v 27%

Source: 3DayCar Dealer Survey, 12/1999

Consumer New Car Buying

Analysis

Age & Ideal OTD Time

Norm

4 to 6 weeks 3 to 4 weeks 2 to 3 weeks 1 to 2 weeks up to 1 week

0 20 40 60 80 100 120 140 160 180

over 55 36 to 55 25 to 35 under 25

Index: 100=Norm

Analysis

Age & Ideal OTD Time

84% of Under 25s thought the ideal time is

2 weeks or less
58% of over 55s 62% of 36-55s 54% of 26-35s <25: 25-35: 36-55: >55:

Average OTD wait:

10.5 days 19.7 days 20.1 days 18.6 days
Consumer New Car Buying

Analysis
VW Vauxhall T oyota R over P eugeot Mazda L exus L and R over J aguar F ord F iat C itroen B MW Audi Alfa R omeo
20

Brand & Ideal OTD Time - 1

Norm

2 to 3 w eeks 1 to 2 w eeks up to 1 w eek

40

60

80

100

120

140

160

180

200

220

240

Index: 100 = Norm

Analysis
VW Vauxhall T oyota R over P eugeot Mazda L exus L and R over J aguar F ord F iat C itroen B MW Audi Alfa R omeo
20

Brand & Ideal OTD Time - 2

Norm

4 to 6 w eeks 3 to 4 w eeks

40

60

80

100

120

140

160

180

200

220

240

260

In dex: 100 = Norm

Analysis

Region & Ideal OTD Time

Norm

Scotland

North South divide

North

4 to 6 w eeks 3 to 4 w eeks

Mids, E Ang

2 to 3 w eeks 1 to 2 w eeks up to 1 w eek

Wales,SWest

Lon/S/SEast
20 40 60 80 100 120 140 160 180 200

Index: 100=Norm

Summary & Conclusions

Robust sample for analysis Surprisingly short time spent on making

the purchase decision

Waiting time is important to choice of car Present system is an almost 2 week car
system for almost half of buyers
but driven from stock higher than anecdotal evidence

general shift in consumer behaviour?

Consumer New Car Buying

Summary & Conclusions

Significant regional variations Young motorists

dist centres, brands bought, congestion, expectations? significant difference in behaviour & expectations will impact future overall market behaviour natural 3DayCar consumers?

OTD time matters

ideal time much less than industry thinks contrast with dealers survey

Consumer New Car Buying

Summary & Conclusions

Alternatives & benefits received

significant - quarter of all buyers accept alternative one eighth receive benefits which are lost margins, profitability etc

Timing of orders & delivery bias towards

weekends
Fridays for collection Saturdays for order supports dealer research

Consumer New Car Buying

Summary & Conclusions

Differences between men & women

females less willing to wait reference growth in female motorists & change in

Information Sources
Dealer still critical Friend, Brochure, Magazine 4 different sources of information nb growth of internet now nearly 20%

relative influence & role

Consumer New Car Buying

Summary & Conclusions

Research suggests that the consumer

demand for a 3DayCar would be strong

Latent potential ready to exploit.

Consumer New Car Buying

What the Customer Wants

New Car Buyer Behaviour Quantifying Key Stages & Activities in the Consumer Buying Process