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JD Power: Car Buying Trends
This entry was posted on 11/30/2007 1:35 PM and is filed under Psychology,Lending.
WESTLAKE VILLAGE, Calif., Nov. 29, 2007 /PRNewswire/ — While older buyers
who purchase domestic vehicles are more likely to avoid purchasing
certain models because they are imports, younger consumers who purchase
import vehicles are more likely to avoid models because they are of
domestic origin, according to the J.D. Power and Associates 2007
Avoider Study(SM) released today.
The study, now in its fifth year, examines the reasons consumers
fail to consider particular models when shopping for a new vehicle, and
finds that pro-domestic and pro-import purchase sentiment is strongly
tied to the buyer's age. Among import buyers for example, the younger
the person is, the more likely they are to avoid models because they
are of domestic origin.
The study also finds that the North Central region of the United
States (as defined by the U.S. Census Bureau), contains the highest
proportion (41%) of domestic vehicle buyers who do not consider import
brands during the shopping process. Vehicle styling and cost are the
two most frequently reported reasons that consumers give for avoiding
import brands.
Conversely, the Northeast and the West regions contain the highest
proportions of buyers of import vehicles who say they avoid specific
models because they are domestic in origin. The most frequently cited
reasons given for avoiding a domestic brand are concerns about
reliability, poor quality and depreciation. A greater proportion of
these import buyers also mention poor gas mileage as a reason for
avoiding domestic models.
"Many buyers continue to have unfavorable impressions of domestic
models due to concerns about quality, reliability and depreciation
issues, even though the quality of many of these domestic products is
on par with or exceeds that of their import counterparts," said Jon
Osborn, research director at J.D. Power and Associates. "Domestic
manufacturers need to get this message out in front of younger buyers
and convince them to put their models on their shopping list."
The study finds that gas mileage is the most frequently mentioned
reason for purchasing a vehicle, while it remains the seventh most
frequently cited reason for avoiding a particular vehicle model. Buyers
tend to avoid non-premium brands more often due to poor gas mileage,
compared with premium makes. However, customer perceptions of poor gas
mileage, rather than actual data regarding fuel economy performance,
may influence these avoidance decisions.
"As an example, the HUMMER H3 is the most-avoided model in its
segment, with 21 percent of buyers saying that they would not consider
buying this model and many citing poor gas mileage as a reason," said
Osborn. "However, EPA fuel economy estimates for the HUMMER H3 are very
similar to those of other midsize utility vehicles, such as the Jeep
Commander and Chrysler Aspen, which have much lower rates of avoidance.
The perception that the HUMMER model gets worse gas mileage than other
comparable models may be strongly influencing consumer decisions to
exclude it from consideration — especially since gas prices have
remained high. Changing customer perceptions by educating buyers about this model's fuel efficiency performance may help to lower its avoidance rates."
The study results include the following key findings:
— Buyers are making avoidance decisions based on consumer-generated information found on the Internet, with consumer reviews most often cited as a source leading to avoidance, followed by expert reviews and manufacturer site information.
— While gas mileage is a prominent reason for vehicle purchase decisions, wanting an environmentally friendly vehicle is one of the least-cited reasons for purchasing.
— Younger buyers are more apt to indicate gas mileage as a reason for purchasing, compared with their older counterparts.
The 2007 Avoider Study is based on responses from more than 35,000 owners who registered a new vehicle in May 2007.
About J.D. Power and Associates
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