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Fuel for Thought: Automotive Retail - The Path Forward
Automotive Monthly Newsletter and Podcast
This month's theme: Automotive Retail - The Path Forward
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Automotive retail is changing; the global industry knows this and has seen this coming for years. However, this has been accelerated likely 5-10 years due to the COVID-19 pandemic impact. The industry players are looking at ways to engage consumers more broadly across the entire life of vehicle ownership, looking at approaches not encumbered by traditional models and investments and looking at ways to target and engage specific consumers to most effectively increase conversion and loyalty. There are new consumer considerations, an increasingly electrified set of product offerings and further shifting views of mobility overall. These considerations are all set against a backdrop of a much smaller, changed and increasingly competitive market. The IHS Markit August Light Vehicle Sales forecast volumes have recently increased for full-year 2020 as economic data continues to surprise on the upside. North America is now expected to approach 16m units in 2020 (up 298k from previous July forecast). Europe will finish around 15.9 million units (+197k) and Greater China will end the year at 22.3 million units (+149k). The IHS Markit Purchasing Manager's Index (PMI), a key economic measurement, continues trending in a positive direction and registered economic growth for the first time since January 2020.The global IHS Markit Composite PMI registered 50.8 in July, up from a pandemic low of 26.2 in April 2020. The Eurozone is leading with a reading of 54.9 in July, China is at 54.5 and the US is at 50.3. These are positive indicators that the global recovery is underway despite the ongoing outbreak. However, the pandemic will leave a lasting impression on the automotive industry - particularly at a retail level.
Retailer and manufacturer creativity in response to the pandemic varied by market during the last several months, as dealership activities shifted from primarily in-person to online during quarantine, the US trailed China by 10% and UK by 9% in offering the consumer the ability to purchase online with over 40% of the US consumers surveyed not having an online option available at all - almost 20% higher than China. Covid-19 has changed the dealership experience, from the number of people needed to complete a vehicle transaction to non-traditional retail formats becoming more feasible for established manufacturers. This disruption is an opportunity to re-envision retail formats, adopt digitization and align closer to consumer's expectations. In the future, retail will continue to see disruption from the automotive megatrends in electrification and mobility.
COVID-19 has also impacted mobility trends, changing consumer consumption of public transportation and mobility services - public transportation usage was down 90% and Mobility-as-a-Service (MaaS) saw demand plummet 75%-80% during the pandemic peak as many consumers opted for active mobility modes like cycling and walking. Consumers may not return to using public transportation or MaaS to their pre-pandemic levels - opting instead to purchase a personal vehicle - time will tell.
With additional disruptions in the US - consumer preference shifts, a dramatic increase in pickup demand and purchase cycle interruptions, extension of leases - there has been a greater demand for data driven targeted marketing. Polk Audiences™ are available to refine consumer targets based on key automotive attributes at the household level. Providing the ability to reach in-market consumers, loyal to the pickup segment with a thriving credit score - as an example. It becomes extremely useful when you have a $45,000 pickup whose payment drops from $750/mo to $536/mo with an incentive enhancement. As interest rates remain historically low, manufacturers with captive finance arms have an advantage, are you maximizing your advantage by reaching the right customers?
COVID-19 ACCELERATES RETAIL TRANSFORMATION
COVID RECOVERY SERIES
COVID-19: THE FUTURE OF MOBILITY DELUSION WHITEPAPER
AUDIENCE ACTION PLAN
- Average age of cars and light trucks in the US rises to 12.1 years, accelerated by COVID-19
- India's role in global automotive electrification
- Making the BEV commitment
- Sedans: Staying Alive - no longer on top, but they're not dead
- If only audience buying was always this easy
- An Automotive Minute with Stephanie Brinley - Electric Trucks
- 2020 - Been there, done that! What’s next for the Indian MHCV market in 2021?
- US monthly new vehicle registrations reach 10-year high in March; EV market share surpasses 3% for first time
In this week’s episode of Autology, we discuss 5G’s impact on the IoT ecosystem and specifically on the… https://t.co/hzDerbxTpy
Auto dealers, are you looking to improve your conquest, service, and sales efforts? Register for our Data-Driven A… https://t.co/DyvjB90JBU