jd power online car buyers

J.D. Power and AssociatesJ.D. Power and Associates2002 New Autoshopper.com2002 New Autoshopper.comSMSM

© 2002 J.D. Power and Associates. All Rights Reserved

Steve WittenSenior DirectorJ.D. Power and Associates

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• Introduction Summary of Key Terms Objectives Methodology

• Study Highlights

• Industry Overview

• Automotive Internet Users

• Questions

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Summary of Key TermsSegments• Non-Internet User (NIU)

– Has no Internet access

• Non-Internet Shopper (NIS) – Accesses Internet but does not research online

• Non-Automotive Internet User (Non-AIU)– Non-Internet Shopper + Non-Internet User

• Automotive Internet User (AIU) – Researches vehicle online

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Summary of Key Terms (continued)

Types of Web Sites

• Independent/3rd party– Yahoo! Autos, Autobytel, etc.

• Manufacturer– Toyota.com, Ford.com, etc.

• Dealership– Individual dealer Web sites

• Newspaper– LATimes.com, NYTimes.com, etc.

• Chat rooms/Bulletin boards

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Objectives• Automotive information sought and found

by consumers

• Internet Impact on vehicle selection, purchase and finance decision

• Types of Web sites visited

• Demographic profile by segment

• Internet’s role as a referral service

Understanding the Role of the Internet

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Methodology• Retail purchasers and lessees of new 2002 and

2003 MY cars and light trucks

• Registered January and February 2002

• Randomly drawn national sample obtained from R.L. Polk and Co.

• Average return target of 138 per model

• Weighted to reflect retail sales mix during the sample period

• Mailout = 116,317; Returns = 27,383; Response Rate = 24%

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Study Highlights

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Study Highlights• The percentage of new-vehicle buyers, across all

brands, who use the Internet to research and/or purchase their automobile online has leveled off at 60% - consistent with last year's figures.

• Four percent (4%) of all new-vehicle purchases are made through online buying services - also consistent with 2001 figures.

• The average automotive Internet user (AIU) visits nearly 7 different automotive Web sites and spends 4.75 hours online.

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Study Highlights (continued)

• Independent third-party Web sites are visited by 82% of AIUs, approximately equal with 2001 (83%).

• Manufacturer Web sites are gaining in popularity among AIUs--- 76% of AIUs visit a manufacturer site; dealership-site visitation is also up in 2002.

• Autobytel.com continues to generate more online sales than any other site, though its market share has declined in recent years.

• The use of bulletin boards and chat rooms by AIUs has dropped from 2001 levels (12% from 17%).

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• Kelley Blue Book (kbb.com) tops the list for the fifth straight year as the most frequently visited automotive Web site

• Edmunds.com is rated as the most useful Web site for the second year in a row.

• Online financing of vehicles declined in 2002 (0% financing likely played a role).

• AIUs continue to be younger, more affluent, and far less brand-loyal than Non-AIUs.

• AIUs invest more time in the shopping process, are more distrustful of dealers, and are more price sensitive than Non-AIUs.

Study Highlights (continued)

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Industry Overview

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AIUs Remain Younger, More Educated, with Higher Incomes

AIU NIS NIU

Age (median) 45 50 58

Income (median) $81,300 $75,300 $54,100

Education(% College Grad)

58% 43% 25%

% Small City orMetropolitan 74% 69% 61%

Demographic Profile

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The Top 5 & Bottom 5 Makes in AIU RateThe Top 5 & Bottom 5 Makes in AIU Rate

Based to Total New-Vehicle BuyersBased to total respondents

81%

81%

78%

52%

51%

41%

39%

82%

82%

41%

Audi

Acura

Porsche

BMW

Volkswagen

Dodge

Mercury

Lincoln

Cadillac

Buick

Industry Average 60%

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Luxury Makes Appealing to Younger Buyers have Highest AIU RatesLuxury Makes Appealing to Younger Buyers have Highest AIU Rates

Based to Total New-Vehicle BuyersBased to total respondents

81%

81%

77%

75%

72%

71%

70%

68%

66%

41%

41%

82%

82%

71%

Acura

Audi

Porsche

BMW

Saab

Volvo

Infiniti

Land Rover

Jaguar

Luxury Average

Lexus

Mercedes-Benz

Lincoln

Cadillac

34%

24%

47%

23%

13%

23%

25%

34%

63%

37%

23%

31%

77%

73%

% Change from 1999

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Highest AIU Rates of Non-Luxury Makes

Based to total respondentsMakes with less than 30 respondents not shown

78%

76%

71%

70%

69%

68%

67%

65%

64%

61%

60%

60%

59%

Volkswagen

Subaru

Isuzu

Mazda

Honda

Toyota

Nissan

Hyundai

Suzuki

Jeep

Mitsubishi

GMC

Non-Luxury Average

% Change from 1999

31%

20%

32%

54%

32%

42%

45%

74%

60%

25%

49%

67%

50%

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59%

56%

55%

54%

54%

54%

53%

52%

52%

51%

39%

Non-Luxury Average

Chrysler

Pontiac

Kia

Saturn

Ford

Oldsmobile

Chevrolet

Dodge

Mercury

Buick

AIU Rates of Non-Luxury Makes (Continued)

Based to total respondentsMakes with less than 30 respondents not shown

% Change from 1999

50%

33%

42%

60%

28%

59%

45%

77%

40%

69%

76%

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Highest Rate of AIUs by Model

*Caution: Small SampleModels with less than 30 respondents not shownBased to total respondents

Volkswagen EuroVan* 88%

Toyota Highlander 87%

Mazda MPV* 86%

Toyota Sequoia* 86%

Isuzu Axiom* 86%

Audi A4 86%

Subaru Impreza 85%

BMW Z3* 85%

Acura MDX 85%

Acura TL 84%

Honda S2000 84%

Lexus IS 300* 84%

Porsche Boxster* 84%

BMW 3 Series 83%

Volkswagen GTI* 83%

Ford Crown Victoria* 38%

Chevrolet Malibu 38%

Cadillac Seville* 37%

Oldsmobile Intrigue 37%

Buick Regal 36%

Mercury Grand Marquis 36%

Buick LeSabre 35%

Chevrolet Prizm 34%

Dodge Neon 34%

Cadillac DeVille 33%

Buick Park Avenue33% Lincoln

Continental* 30% Lincoln

Town Car 30%

Cadillac Eldorado* 28%

Buick Century* 24%

Top 15 Model in AIUs Bottom Model 15 in AIUs

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Automotive Internet Users

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KBB is the Most Frequently Visited Site

2%6%

9%

9%

9%

10%

11%

12%

12%

13%

14%

19%

19%

20%

21%

26%44%

Audi

Volkswagen

Cars.com

Car & Driver Online

Microsoft CarPoint

NADA.com

AOL Autos

AutoTrader.com

Autobytel.com

Honda

Chevrolet

Yahoo! Autos

Toyota

Consumer Reports Online

Ford

Edmunds.com

Kelley Blue Book (kbb.com)

MeanUsefulness1

7.6

7.9

7.2

7.5

7.3

6.7

7.4

7.5

6.0

6.6

6.3

6.9

7.0

6.8

6.7

7.3

7.2

Based to AIUs1Based to those visiting each individual site. Based on a 10-point scale, where 1 is Unacceptable, 10 is Outstanding, and 5 is Average

Percent of AIU Visiting Site

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Usefulness Rating by Web Site Category for AIUs1

Based to AIUs1Based to those visiting each individual site. Based on a 10-point scale, where 1 is Unacceptable, 10 is Outstanding, and 5 is Average.2Sub component of Independent Site Category (weighted mean)*Caution: Small Sample, #N/A: Insufficient Sample

5.7

6.3

5.8

6.5

6.5

7.3

7.4

6.0

6.3

6.4

7.1

7.4

5.4

4 5 6 7 8

Newspaper Web Site

Dealership Web Sites

Chat Room/BulletinBoard Web Sites

Lead Generator WebSite

Portal Web Site

Research Web Site

Manufacturer Web Site

Euro-LuxuryAIUsLuxury AIUs

2

2

2

#N/A

*

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Usefulness Rating by Web Site Category for AIUs1

Based to AIUs1Based to those visiting each individual site. Based on a 10-point scale, where 1 is Unacceptable, 10 is Outstanding, and 5 is Average2Sub component of Independent Site Category (weighted mean)*Caution: Small Sample

5.4

5.5

6.4

6.4

6.5

7.3

7.4

5.4

6.2

6.4

6.5

7.3

7.6

5.5

4 5 6 7 8

Newspaper Web Site

Chat Room/BulletinBoard Web Sites

Dealership Web Sites

Portal Web Site

Lead Generator WebSite

Manufacturer WebSite

Research Web Site

Non-Luxury AIUs

Total AIUs

2

2

2

*

*

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GM BuyPower, Edmunds, and Saturn Rate as the Most Useful Web Sites

Based to AIUs1Based to those visiting each individual site. Based on a 10-point scale, where 1 is Unacceptable, 10 is Outstanding, and 5 is Average*Caution: Small Sample

7.2

7.3

7.5

7.5

7.5

7.6

7.6

7.6

7.7

7.9

7.9

8.3

6 7 8 9

Audi

Volkswagen

Jeep

Lincoln

Mercedes-Benz

kbb.com

BMW

Acura

Isuzu*

Saturn

Edmunds.com

GM BuyPower*

Web Site Usefulness (Top 10)

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The Majority of AIU’s Pre-Negotiation Occurs Over the Phone:

Dealer May Not Realize the Lead Dealer May Not Realize the Lead Occurred from the InternetOccurred from the Internet

1Based to total respondents2Based to those respondents who pre-negotiated by telephone or e-mail. Multiple responses allowed.

79% 21%AIUs YES

Pre-Visit Negotiation1 Negotiation Method2

YES

39%

85%

Phone

E-Mail

Phone

Phone

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2.2%1.9%

7.3%

30.0%

22.4%

15.3%

9.0%

12.0%

13 orMore

Weeks

9 to 12Weeks

5 to 8Weeks

3 to 4Weeks

1 Day to2 Weeks

1 Day to1 Week

2 Weeks 3 orMore

Weeks

Before Visiting First DealerBefore Visiting First Dealer After Visiting First DealerAfter Visiting First Dealer

89% of AIUs Go Online Before Visiting a Dealership…89% of AIUs Go Online Before Visiting a Dealership…59% Go Online 3 weeks, or more, before visiting a dealership59% Go Online 3 weeks, or more, before visiting a dealership

Based to AIUs

When Auto Shoppers First Go Online When Auto Shoppers First Go Online

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Vehicle Options and Pricing Information are the Most Important Information Found OnlineVehicle Options and Pricing Information are the Most Important Information Found Online

5.7

6.3

6.8

6.9

7.3

7.5

7.7

7.7

7.7

7.8

8.1

8.1

8.2

8.4

8.5

8.7

Referral w/Best Price

Local Dealer Info

Dealer Inventory Info

Monthly Payment Calculator

Road Tests and Reviews

Trade-In Values

Safety Info

Photograph of Exterior

Side-By-Side Comparison

True Market Price

Vehicle Specs

Discount Info

Reliability Ratings

MSRP Calculator

Dealer Cost/Invoice

Options and Features

1Based on a 10-point scale, where 1 is Not at all Important, 10 is Extremely Important, and 5 is Average

Importance Rating of Online Information (Top 16)

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40%

17%

19%

69%

32%

60%

75%

73%

25%

60% 8%

6%

0

7%

8%

0% 20% 40% 60% 80% 100%

Online DealerReferral*

DiscountInformation

Dealer Invoice

Options andFeatures

Most HelpfulOverall

% Trust Most for Info

AIUs Trust Manufacturers for Accurate Option Info and Independents for Pricing Information

Based to AIUs *Online dealer referral does not include dealer sites1Based on a 10-point scale, where 1 is Not at all Important, 10 is Extremely Important, and 5 is Average

Manufacturer Site Independent Site Dealer Site

8.7

8.5

8.1

5.7

ImportanceRating1

Internet's Impact on Car Buying Decisions

4%

5%

4%

3%

4%

3%

3%

4%

3%

9%

11%

9%

7%

8%

7%

12%

8%

9%

20%

21%

33%

32%

33%

32%

32%

31%

31%

28%

33%

37%

37%

37%

37%

43%

36%

40%

Chevrolet

Ford

Honda

Nissan

Toyota

Nissan

Subaru

Toyota

All AIUs

% Big Impact

Fair Price

Make/Model

Dealer

Lender

Based to AIUs

60%55%

54%52%52%52%52%

50%

49%48%

46%46%

45%44%

41%39%39%

38%37%37%37%

36%36%36%

50%

Hyundai

Kia

Jeep

Subaru

Honda

Mitsubishi

Chevrolet

Suzuki*

Pontiac

Volkswagen

Nissan

Ford

Saturn

Dodge

Toyota

Acura

Mercury

Porsche

Land Rover

Mercedes-Benz

Lexus

Infiniti

GMC

Jaguar

AudiBased to AIUs

% of Web Site Visitors% of Web Site VisitorsThat Purchased MakeThat Purchased Make

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41%

39%

38%

37%

37%

37%

36%

36%

33%

33%

29%

22%

34%

Acura

Porsche

Land Rover

Mercedes-Benz

Lexus

Infiniti

Jaguar

Audi

BMW

Cadillac

Volvo

Saab

Lincoln

Based to AIUs

% of Site Visitors Purchasing Make % of Site Visitors Purchasing Make (Top 10 Luxury(Top 10 Luxury))

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Well Over Half of Visitors Who Rated the Well Over Half of Visitors Who Rated the Web Site 8 or Higher Purchased the MakeWeb Site 8 or Higher Purchased the Make

0%

10%

20%

30%

40%

50%

60%

70%

1 to 5* 6 or 7* 8 or 9 10*

Web Site Rating by Car Buyer

% P

urc

ha

se

Ma

ke

Based to Volkswagen Web site visitors*Caution: Small Sample

Web Site’s Influence on Purchase

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There is Interest in Online Vehicle LoansThere is Interest in Online Vehicle Loans

21%

26%

20%

20%

24%

22%

15%

0% 5% 10% 15% 20% 25% 30%

Chrysler

BMW

Ford

Honda

Nissan

Toyota

General Motors

% Definitely/Probably Will Use Online Lender

Based to AIUs*Caution: Small SampleModels with less than 30 respondents not shown

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High Interest in Online Vehicle Loans for Their Next PurchaseHigh Interest in Online Vehicle Loans for Their Next Purchase

23%

23%

26%

20%

20%

20%

24%

22%

21%

0% 5% 10% 15% 20% 25% 30%

Acura

Audi

BMW

Ford

Honda

Mazda

Nissan

Toyota

Volkswagen

% Definitely/Probably Will Use Online Lender

Based to AIUs*Caution: Small Sample

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Loyalty Among AIUs and Non-AIUs

37%

53%

24%

45% 45%

36%

48%

38%

57%

71%

42%

67% 67%

52%

65%

57%

0%

20%

40%

60%

80%

Luxury

Chevro

let

Chrysle

rFor

d

Honda

Nissan

Toyot

a

Industr

y

Make Replaced

Per

cen

t Rep

urc

has

e S

ame

Mak

e AIU's Non AIU's

1Based to those respondents replacing same make originally bought new

*Caution: Small Sample

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Behavioral Profiles1

AutomotiveInternet Users

(AIU)Non-Internet

Shoppers (NIS)Non-InternetUsers (NIU)

Time Investors 137 37 50

Auto Experts 113 76 85

Price Sensitive 112 73 91

Dealerphobes 112 89 74

EmpoweredNegotiators

100 96 103

1Profile Index of 100 equates to the industry average

Psychographic Profile of AIUs

129

117111 108

117

89

108115 113 114112

131

110 109

130

94

149

84

120 123

89

156

94

120 117

92

141

83

132

113113

137

100

112 112

81

43

100

81 82

100 100 100 100 100

0

50

100

150

200

Auto Experts Time Investors EmpoweredNegotiators

Dealerphobes Price Sensitive

Psychographic Profiles

Ind

ex

Sc

ore

Chevrolet AIUs Chrysler AIUs Ford AIUs

Honda AIUs Nissan AIUs Toyota AIUs

Total AIUs Total Non-AIUs Total Total

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Internet's Impact Decisions of AIUs

40%

54%

47% 47%

50%

41%

47%

35%

40%

43%

20%

30%

40%

50%

60%

Auto Experts Time Investors EmpoweredNegotiators*

Dealerphobes* Price Sensitive*


% "

Big

Imp

act"

How much to pay Make/model puch

Auto Experts are Influenced the Least, Time Investors the MostAuto Experts are Influenced the Least, Time Investors the Most

Based to AIUs* Small sample

Psychographic Profile of AIUs

117

108

129

117111

131

109 112

130

110

149

120

94

123

84

156

120

89

117

94

141

132

92

113

83

137

112 113 112

100

0

50

100

150

200

Time Investors Dealerphobes Auto Experts Price Sensitive EmpoweredNegotiators


Ind

ex

Sc

ore

Chevrolet AIUs Ford AIUs Honda AIUs

Nissan AIUs Toyota AIUs Total AIUs

AIUs Spend an Above Average Amount of Time ShoppingAIUs Spend an Above Average Amount of Time Shopping

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Internet's Impact Decisions of AIUs

49%44% 46%

38% 38%

42%

32%39%

29% 31%

13%

11%

15%

13% 11%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

Time Investors Dealerphobes Auto Experts* Price Sensitive* EmpoweredNegotiators*


% "

Big

Imp

act"

How much to pay Make/model puch Dealer purch from

Segments Most Influenced by the InternetSegments Most Influenced by the Internet

Based to VW AIUs* Small sample

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Submitting Purchase Requests

17%

24%

15%18%

10%

9%

9%

9%

11%

11%

0%

10%

20%

30%

40%

Time Investors Dealerphobes Auto Experts* Price Sensitive* EmpoweredNegotiators*


% S

ub

mit

ted

Pu

rch

as

e R

eq

ue

st

Submitted, Not Purchased Submitted & Purchased

33%

26%24 %

29%

21%

Dealerphobes Have a High Rate of Dealerphobes Have a High Rate of Submitting Online Purchase RequestSubmitting Online Purchase Request

Based to All AIUs* Small sample

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Summary• Not only do import brands have above average AIU

rates, their AIU tend to be more extensive shoppers than domestic AIUs.

• Consider adding “selling” the low-pressure sales experience your web site buyers go through.

– Dealerphobes make up a large portion of AIUs, these buyers have high rates of online purchase requests.

• Look at possible improvements in payment calculator and online dealer inventory information.

– Many buyers had a difficult time finding them online.

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Summary• Web sites would benefit from highlighting

reliability and safety information. – These two highly important items have been

found by very fewer buyers.– Consider providing a link to third-party sites with

reliability information. The independent source may appear more credible to the consumer.

• Buyers rate the BMW and MBUSA sites as more useful than other sites. Look to them as a benchmark.

– BMW rating higher on navigation.