New car distributors are wasting their money on television advertising, and social media such as Facebook is even worse, according to the Cox Automotive Car Buyer Journey survey released late April.
And although the survey was conducted in the US, it is likely that Australasian buyers follow the same trends.
Cox Automotive Australia and New Zealand CEO Rob Whiten told Australian motoring news website GoAuto “there can be no doubt that both dealers and OEMs can benefit from the very interesting findings”.
Key findings of the survey were as follows:
• TV advertising is unlikely to entice buyers into a new brand.
• Fewer people want to visit dealerships.
• Social media, including Facebook, is one of the last methods used to actually choose a car.
So how are they choosing their new car?
Says Isabelle Helms, vice president of research and market intelligence for Cox Automotive: “We found that consumers are spending more of their shopping time online while making faster decisions and spending fewer days in market.”
The findings: car buyers spend an estimated 61 percent of active shopping time online – up from 57 percent in 2017 – and are in market an average of 96 days, a drop of more than 20 days in the past two years. What’s more, approximately 50 percent of used-car buyers and 44 percent of new-car buyers are now spending 30 days or less in-market.
The number of dealerships visited in the car-buying process also continues to drop. On average, according to the study, car buyers who purchased from a dealership visited 2.3 dealers. In 2017, the average buyer visited 2.7 dealership. Further, 41 percent of buyers now visit just one dealership during the car-buying process, up from 30 percent in the 2017 study.
“At the dealership, filling out paperwork and negotiating a price remain top frustrations for most consumers,” she said.
Third party sites the king
Third party online sites were the most popular sources for helping consumers choose their next vehicle, and 52 percent of buyers said that a third party website was used to make the final decision on a vehicle brand.
“Our study found buyers to be most interested in product details and vehicle specifications, followed by brand reputation and the deal offered,” she said.
The survey also found that dealer websites were used 34 percent of the time, while official car manufacturer websites were used by 33 percent of buyers.
“Only 10 percent of vehicle buyers trusted social media sites such as Facebook to help with their final decision on a vehicle brand,” the survey noted.
Interestingly, around a third of new car buyers switched into a brand they had never owned before, with price and features the deal-breakers.
And for the car advertisers, television advertising was seen to be a waste of time and money.
The survey concluded: “In courting new-vehicle buyers, automakers focused heavily on traditional television advertising are mostly wasting their time and money.
“Only 13 percent of new-to-the-make buyers became aware of the make through television advertising.
“Word of mouth from friends and family is the most cited source of influence, followed by the Internet, where third-party sites are the top driver of awareness.”
More details https://www.coxautoinc.com/market-insights/2019-car-buyer-journey-study
