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Recession Power Session:How ‘The Tough Are GettingGoing’
Lenny McGinleyVP, Dealer SalesAutobytel Inc.
2
Survey.com Survey Methodology
• Survey.com was commissioned by Autobytel to conducta survey examining how auto dealerships areresponding to the current economy and high gas prices:• Examine impact the current economy and high gas
prices has had on overall sales• Explore how dealerships feel about the future of
smaller, more fuel-efficient vehicles
• 200 nationally representative dealer responses
• Data was collected from August 25, 2008 throughSeptember 8, 2008.
3
Overall New Vehicle Sales vs. a Year Ago
Source: Survey.com, September 2008
27%
18%
55%
0% 10% 20% 30% 40% 50% 60%
Sales Up
Stayed about the
same
Sales Down
Good News:45% of dealers reported
new vehicle sales were flator up versus a year ago
4
Overall New Vehicle Sales vs. a Year Ago
Import vs. Domestic Story
78%
73%
70%
71%
72%
73%
74%
75%
76%
77%
78%
79%
Import Domestic
65%
72%
12%15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Toyota GM
Decline Increase
% o
f dea
lers
repo
rt s
ales
dec
line
More GM Dealers Report SalesIncrease than Toyota Dealers…
% o
f dea
lers
repo
rt s
ales
incr
ease
/dec
line
Source: Survey.com, September 2008
5
Overall New Vehicle Sales vs. a Year Ago
WhoWho’’s Up?s Up?
Honda 50%
Hyundai 50%
Nissan 40%
WhoWho’’s Down?s Down?
Kia 37%
Hummer 33%
Chrysler 26%
Source: Survey.com, September 2008
6
Overall Used Vehicle Sales vs a Year Ago
Source: Survey.com, September 2008
36%
25%
40%
0% 10% 20% 30% 40% 50%
Sales Up
Stayed about
the same
Sales Down
Good news: 61% of dealersreported used vehicle sales were
flat or up versus a year ago
41%
32%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Import Domestic
% of dealers report salesincrease
7
Fuel Sipper Sales Up This YearHas your dealership seen an increase in sales of smaller, fuel-efficientvehicles over the past year?
Source: Survey.com, September 2008
2%
11%
88%
0% 20% 40% 60% 80% 100%
No, sales have gone
down
Stayed the same
Yes,
somewhat/significant
increase
9 out of 10 dealers saw anincrease in smaller, fuel-efficient vehicle sales…50% have seen an over
20% increase
8
Whose Fuel Sipper Sales Are Up This YearWhose fuel sipper sales are up this year?
Source: Survey.com, September 2008
67%
69%
88%
49%
59%
0% 20% 40% 60% 80% 100%
Nissan
Honda
Hyundai
Domestic
Import
9
Small Cars Driving Sales Health
1%
0%
9%
5%
13%
26%
35%
11%
0%
0% 10% 20% 30% 40%
100% or more
75-99%
50-74%
40-49%
30-39%
20-29%
10-19%
1-9%
0
73% of dealers reporting 10% or moreincrease in sales report significant increase
in small vehicle sales
Top brands spiking smallvehicle sales reporting 20%
or more sales increase
• Nissan 79%
• Honda 62%
• Hyundai 50%
Source: Survey.com, September 2008
10
Who/What is driving new vehicle sales decline?Which factor has had the single largest impact on declining new vehiclesales across the industry?
16%
10%
37%
38%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Other
Inventory Mix
Housing
Market/Credit
Crunch
High Gas Prices
THE MEDIA!“The media scaring the
public with all the negativepress”
Source: Survey.com, September 2008
11
Who is Blaming Who?
13%
26%
37%
42%
31%
27%
60%
38%
43%
32%
35%
31%
53%
20%
0%
9%
16%
8%
20%
7%
0%
0%
10%
20%
30%
40%
50%
60%
70%
Kia
Chev
role
t
Chry
/Jee
p/Dodge
Honda
Toyota
Nis
san
GM
C
High Gas Prices Housing Market/Credit Crunch Inventory Mix
• GMC dealers most likely to blame Gas Prices• Nissan dealers most likely to blame Credit Crunch• Toyota dealers most likely to blame Inventory Mix
Source: Survey.com, September 2008
12
F-E Vehicle Shift Permanent or Just Another Phase?
Do you think the recent industry-wide shift to smaller, fuelefficient vehicles is permanent?
YES! 46%
Gas prices will stay high and market will continue to be about fuel
efficiency.
NO! 49%
It’s just part of the current cycle; gas prices will decline andtrucks/SUVs etc. will make a comeback.
• 65% Honda dealers see it as permanent vs. 22% of Chevy
• 67% Hummer dealers see it as part of cycle
Source: Survey.com, September 2008
13
Fuel Efficiency Driving Consumer Behavior?
Do you agree with this statement:
“Fuel Efficiency is the #1 concern for car shoppers today – and thetop factor in their vehicle selection”?
• Import dealers more likely to say yes: 58%
• Domestics more likely to say no: 42%
46%
55%
Yes!No!
Source: Survey.com, September 2008
14
When Will It Be Over? Or Will It?
When do you think the new vehicle market will significantlyrecover or really start to turn around?
10%
2%
3%
13%
34%
29%
9%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Not sure
Not in the forseeable future
2011
2010
Second half 2009
First half 2009
Later in 2008
Over half of dealers don’tsee turnaround until 2nd Q
2009 and Beyond
Source: Survey.com, September 2008
15
When Will It Be Over? Or Will It?
Most Optimistic Brand?• Nissan – 27% see turnaround in 2008
27%
6%8% 8%
7%
0%
13%
10%
31%
28%
38%
28%
13%
47%
13%
36%
31% 30%
38%38%
16% 15% 15%
13%10%
4%
0% 0%0% 0% 0%
5%
0%0%
13%
8%
38%
10%
5%
32%30%
11%
30%
21%
7%7%
0%
5%4%
0% 0% 0%
10%
21%
15%
8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Nissan
GMC
Hyundai
Honda
Toyota
GM
Chry/Jeep/Dodge K
ia
Later in 2008 First half 2009 Second half 2009 2010 2011 Not in foreseeable future I am not sure
Most Pessimistic Brand?• GMC – 40% 2010 - 2011
16
When the Going Gets Tough, the Tough Get Going
What are dealers doing to weather the storm?
13%
17%
21%
50%
0% 10% 20% 30% 40% 50% 60%
Service and aftermarket sales
Used vehicle sales
Targeted, measurable Internet marketing
(leads, used, etc.)
Better follow-up processes and
processes to convert leads into sales
The #1 focus forThe #1 focus fora dealership is a dealership is
follow-up processesfollow-up processesand lead conversion and lead conversion
processesprocesses
Most Important thing to help during downturn
Source: Survey.com, September 2008
17
When the Going Gets Tough, the Tough Get GoingWhat are dealers doing to weather the storm?
67%
50%
62%54%
46% 47%
63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nissan
Hyundai
Honda
Toyota G
M
Chry/Jeep/Dodge K
ia
% o
f dea
lers
Greater Focus on Follow-up Processes and Lead Conversion
Source: Survey.com, September 2008
18
When the Going Gets Tough, the Tough Get GoingWhat are dealers doing to weather the storm?
27%
6%
15%
23%
13%
32%
13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Nissan
Hyundai
Honda
Toyota G
M
Chry/Jeep/Dodge K
ia
% o
f dea
lers
Greater Focus on Targeted, Measurable Internet Marketing
Source: Survey.com, September 2008
19
When the Going Gets Tough, the Tough Get GoingWhat are dealers doing to weather the storm?
0%
31%
12%
8%
24%
11% 13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Nissan
Hyundai
Honda
Toyota G
M
Chry/Jeep/Dodge K
ia
% o
f dea
lersGreater Focus on Used Vehicle Sales
Source: Survey.com, September 2008
20
When the Going Gets Tough, the Tough Get GoingWhat are dealers doing to weather the storm?
7%
13% 12%
15%17%
11%13%
0%
5%
10%
15%
20%
25%
30%
Nissan
Hyundai
Honda
Toyota G
M
Chry/Jeep/Dodge K
ia
% o
f dea
lers
Greater Focus on Service and Aftermarket Sales
Source: Survey.com, September 2008
21
When the Going Gets Tough, the Tough Get Going
1. Increasing or Standing Firm on Internet Spend 91%
2. Focus on Better Process to Convert Leads Into Sales 77%
3. Making Internet Bigger Part of Budget 69%
4. More Focus on Used 58.5%
What are dealers doing to weather the storm?
Source: Survey.com, September 2008
22
When the Going Gets Tough, the Tough Get GoingWhat are dealers doing to weather the storm?
100%88%
92% 100%91%
79%75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nissan
Hyundai
Honda
Toyota G
M
Chry/Jeep/Dodge K
ia
% o
f dea
lers
incr
easi
ng o
r sta
ndin
g fir
m o
nIn
tern
et s
pend
91% Increasing or Standing Firm on Internet Spend
Honda, Hyundai and Nissan Honda, Hyundai and Nissan top 3 brands increasing spendtop 3 brands increasing spend……
top 3 in sales increasetop 3 in sales increase
Source: Survey.com, September 2008
23
When the Going Gets Tough, the Tough Get Going
What are dealers doing to weather the storm?
73%
81% 80%76%
88%
73% 75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nissan
Hyundai
Honda G
M
Toyota
Chry/Jeep/Dodge K
ia
% o
f dea
lers
focu
s on
bet
ter p
roce
ss to
con
vert
lead
s77% Focus on Better Process to Convert Leads Into Sales
Source: Survey.com, September 2008
24
When the Going Gets Tough, the Tough Get Going
69% Making Internet Bigger Part of Budget
What are dealers doing to weather the storm?
100%
75%69% 67% 69%
58%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nissan
Hyundai
Honda G
M
Toyota
Chry/Jeep/Dodge K
ia
% o
f dea
lers
sig
nific
antly
/som
ewha
t in
crea
sing
Inte
rnet
spe
nd
Source: Survey.com, September 2008
25
When the Going Gets Tough, the Tough Get Going
What are dealers doing to weather the storm?
80%
63%
54%
66%69%
74%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nissan
Hyundai
Honda G
M
Toyota
Chry/Jeep/Dodge K
ia% o
f dea
lers
put
mor
e fo
cus
on U
sed
58.5% More Focus on Used
Source: Survey.com, September 2008
26
Summary
• Over half of new car dealers seeing sales decline
• Domestics more impacted than Import dealers
• F-E Vehicles driving sales increases
• Dealers split on cause between high gas prices andhousing/credit crunch
• 63% believe industry will recover sometime in 2009
• 91% standing firm or increasing Internet spend
• Majority of dealers report that more intense andeffective lead follow up #1 key to survival
Source: Survey.com, September 2008