Part 5: Updated “Automotive Insights We’ve Discovered During Covid-19 Economy” – Improving

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Detroit, MI - Detroit Trading Automotive Research & Insights

Jack Lintol

President & COO at Detroit Trading


Our data scientists continue to monitor online car shopping trends and patterns. Through the Detroit Trading ClearPath™ Enterprise Platform, we’ve analyzed hundreds of millions of data points nationwide to help you better understand the state of car buying in the COVID-19 economy. This article will show you how the following 3 key metrics we reported two weeks ago continue to evolve: 
  1. Consumer Hand-Raiser Activity - Trending Up
  2. Dealer Marketing Efforts - Depends on the OEM
  3. Consumer Purchase Rates - Slight Upturn in Trend
As in our original article, we’ve graphed daily activity of these three metrics against seasonally adjusted, historic activity, which is shown as the “expected” baseline in the charts below. 

1. Consumer Hand-Raiser Activity - Trending Up

At last publication we saw a slight downturn in consumer interest. This continued to be the case through mid-April. However, since our previous publication, we’ve seen April consumer interest rise above historical expected activity which has noticeably increased the trend line.  
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What this means to us: Consumer online shopping activity is increasing since our last publication.

2. Dealer Marketing Efforts - Depends on the OEM

We saw a slight decrease in the number of dealers working leads from our last publication. We believe this is due to more stringent statewide restrictions. We expect these marketing efforts to increase over the coming weeks as states like Michigan removed restrictions on dealers’ ability to sell cars online. Despite this slight decrease, our data points to dramatic differences by OEM, with certain brands maintaining or increasing the number of dealers purchasing leads, using this as an opportunity to encourage their dealerships to respond to more consumer requests, maintain a steady pipeline of sales prospects and leverage that pipeline to gain customers and market share. Qualitatively, through our internal discussions with dealers and automotive brands, we’re hearing that the consumer interest generated online (internet leads) are the most valuable marketing lifeline that they are depending on during this crisis.
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What this means to us: Strategic decisions are being made to re-allocate advertising budgets and respond to the COVID-19 crisis. We see many OEMs and automotive brands focused on lowering their cost per sale, turning to internet leads and leveraging online car shopping solutions as tactics to grow the pipeline of sales prospects for their franchised dealerships and increase market share.

3. Consumer Purchase Rates - Slight Upturn in Trend

The “Expected Rate” line represents expected consumer purchase activity (expected close rate) by day versus actual “New Trend Line”, which is actual consumer purchase activity (actual close rate) by day. The "New Trend Line" has increased from the “Previous Trend Line” reported two weeks ago. This corresponds with dealers transitioning to remote sales, online transactions and home delivery fulfillment. With that said, our data tells us that 7 day close rates remain 32.5% lower than normal, with Luxury Brands showing a more significant decrease.
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What this means to us: Although purchases are still being delayed, consumers still need vehicles. It is encouraging to see the “New Trend Line” move up from two weeks ago. We are seeing distinct differences by OEM in close rate variations from February to April.   

Analysis: Consumers Remain Ready to Buy 

We’re seeing people shopping for cars online at slightly above-normal levels. We’re also seeing automotive brands continue to utilize leads as an important part of their marketing strategy to connect with interested consumers and increase sales activity. The obvious news that buying decisions have been delayed makes sense in this climate. Those who are using this environment to invest in building a book of business are not only out performing their competition, but they are also preparing themselves to make up for current losses once the economy fully re-opens. In doing that they’ll see sales, market share and consumer appreciation increase
 
 
About the Author - Jack Lintol is the President of Detroit Trading, a Detroit-based firm that is amongst the world’s foremost data and technology providers of “in-market” automotive shoppers and shopper intelligence. The firm provides data and leverages data science for original equipment manufacturers and dealers that is responsible for more than 30,000 and $1 billion in monthly car sales. Contact Jack at jack@detroittrading.com.

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