Cars Online 07/08

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Conclusions and Recommendations

This year’s Cars Online research demonstrates that consumer needs are indeed changing, and the way consumers behave in the future will be different from what we are used to as an industry today. This means that companies must respond to and, whenever possible, anticipate these changes across a number of dimensions

Following are recommendations to help companies achieve this objective:

Get the most out of the web.

With at least some consumers considering buying their vehicles online, automakers should re-evaluate their channel strategy. It may make sense to consider an Internet sales arm for your business, especially for particular niche markets where experimentation is an opportunity rather than a risk. Given the increasing usage by consumers of manufacturer sites, focus on ways to extend your web strategy. Integrate your online and offline channels to provide a consistent consumer experience. Look for the right level of online/offline synergies – but also leverage the different characteristics of each channel.

Integrate C2C tools more tightly into the marketing mix. Take a closer look at the new online tools that are influencing consumer buying decisions. Although manufacturer websites are the primary online source being used by consumers researching vehicles, a growing number of buyers are also turning to blogs and discussion forums for opinions and reviews. Significant product and market intelligence can be gleaned from these channels.

Understand what green means in different markets.

The research demonstrated that factors driving decisions about fuel-efficient and alternative-fuel vehicles vary by country. Issues related to fuel efficiency and the environment are likely to remain with us in the coming years, keeping consumers focused on green vehicles – although what constitutes green may evolve over time. And green should not be treated as just a marketing or advertising gimmick or message; if you want to play in this market you need to be committed to green practices throughout your business.

Improve your ability to quickly respond to consumer queries.

As consumer demands rise, effective lead management is more important than ever. An integrated end-to-end approach to lead management can significantly improve conversion rates and decrease the overall cost of selling cars. Harnessing the power of the Internet is a major priority for lead generation, as the information that customers gather from websites directly affects their purchasing decisions. A strong web presence, including across-the-board and up-to-date product and price information, vehicle configurators and cost calculators, is critical to positively influence the customer experience. It should also provide relevant data to estimate the value of leads generated, such as buying potential and probability.

Personalize your communications; don’t mass customize. Personalized communication with consumers can have a positive impact on their vehicle repurchase decisions. Achieving this objective requires an effective CRM program and the use of advanced technologies that can better enhance targeted messaging, increase efficiencies and improve delivery of services to the consumer. Most importantly, it requires careful and effective management of customer information such as personal profiles.

Treat China differently; it’s still an emerging market, but signs of convergence are beginning to appear.

China, now the world’s second-largest car market, represents an enormous growth opportunity for automotive companies. However, nowhere is the importance of understanding the local market more apparent than in China. The secret to succeeding in this market will be finding the right degree of local difference.

Despite the differences in this emerging market, there are early signs that consumer trends are beginning to evolve in the direction of more mature automotive markets. For example, in 2005, just 6% of Chinese consumers said they were likely to buy the same brand as their current vehicle. This year that number is 52%, a level much closer to that in the Western markets.

Focus on improving customer loyalty.

Establishing and retaining loyalty among today’s knowledgeable and fickle consumers is more challenging than ever. Critical to success for manufacturers and dealers will be the ability to develop a strong two-way dialogue with customers, improved manufacturer/dealer collaboration and effective retail integration. Creating efficiencies and enhancing integration in transactions between manufacturers and dealers has implications not only for the cost structure of the manufacturer and dealer, but also indirectly for the customer’s perception and thus the competitive position.