Top Headlines We Are Reading At Foundation
- 2022 Holiday Auto Shopper Insights (in above slides)
- Foundation Takeaway: Over 3.5 Million new vehicles are forecasted to sell in Q4 2022 which would be a 9% YoY increase from Q4 2021. As vehicle prices rise to record highs auto shoppers are more leaned in to sales events with the primed mindset that deals might be available — Labor Day searches this year were up 5% YoY bucking the trends of decrease in automotive searches overall. Capturing demand and being clear with your inventory and pricing will have you primed for these holiday shoppers (you’re all set with Foundation!). Check out the slides above for more Holiday Auto Shopper insights.
- Bloomberg: Car Loan Rates Head for 14-Year High in New Barrier for Buyers
- Foundation Takeaway: The average annual percentage rate on new-car loans was 6.3% last month, the highest since April 2019, according to Edmunds. This has the potential to continue to increase as Federal Reserve officials delivered their fourth straight 75 basis-point interest rate. Vehicle transaction prices also remain at record highs and could begin to price people out of new vehicles or into lower models with less features. As we’ve seen with the chip shortage shoppers, increase prices will continue to shift people to cross-shop across profit centers with used vehicles.
- October 2022 Sales Forecasts from JD Power
- Foundation Takeaway: Total new-vehicle sales for October 2022, including retail and non-retail transactions, are projected to reach 1,157,900 units, a 10.2% YoY gain from October 2021 when adjusting for the number of selling days, and a 4.6% increase from September 2022 (October usually is a -2% to -5% drop in new sales from Sept.!). Month-end retail units expected to exceed one million units for the first time since May 2021. Dealerships are continuing to pre-sell vehicles in their delivery pipeline. This month, 52% of vehicles will be sold within 10 days of arriving at a dealership, while the average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 19 days—down from 20 days a year ago. Foundation is expecting auto shoppers to lean-in on vehicles with holiday sales event expectations and improved inventory. Foundation has your dealership covered to capture demand during the Holiday season!
- Latest Google Gearshift 2022 Automotive Path to Purchase Research
- Foundation Takeaway: Google has released their latest Gearshift 2022 Automotive Path to Purchase study for auto shopper behaviors. Google has been conducting this study for several years (Foundation’s team of former Googlers helped lead this study while there). Search remains the #1 research tool for auto shoppers. Price and Inventory remain the #1 and #2 influencers of dealer selection and buyers would rather do those steps of the purchase online. 20% of buyers said they change brands due to inventory constrains with 73% of buyers visiting 1-2 dealers on average.
- COX Automotive Q3 2022 Industry Insights and Sales Forecast Call
- Foundation Takeaway: Dealer sentiment for the current market and 3-month future is on the decline as overall buyer confidence is down along with rising interest rates. The impact is starting to be realized with forecasts heading into Q4 for Used Vehicle sales to be down -11% YoY and New Vehicle Sales -15% YoY to 13.3M units. Transaction prices for New Vehicles hit another record high of $48,301 with inventory also up 41% YoY fueling record dealer profits. COX Automotive is expecting a rough Q4 in 2022 and inventory constraints continuing and demand starting to wane. 2023 is on the horizon and the fears of recession might damper sales even if inventory recovers.
- S&P Global Mobility Automotive Marketing Signals: How inventory and loyalty impact investment
- Foundation Takeaway: Inventory constraints continue to grip the auto industry and the impact on auto shoppers is apparent with brand loyalty dropping below 50% for the first time in eight years. Brand loyalty drops dealer loyalty. Dealers being present to capture demand (search) on the inventory currently on lot has never been more important — a core strategy we follow at Foundation. With loyalty top of mind we are also reading Meta’s 3 Ways Auto Brands Can Drive Long-Term Loyalty.
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