The HACK
09-20-2002, 12:28 PM
Probably doesn't really concern the premium brands that you sell, but there are some pretty interesting customer data in there from JD Power & Assoc...
STUDIES: REBATES ARE STRONG POISON
LOS ANGELES- Suspicions confirmed: Fatter-than-ever incentives work too well and are hurting the industry, according to two new studies.
A JD Power & Assoc. study released last week found that perceived price advantage is the No. 1 reason shoppers choose one vehicle over another (interesting note). And a coollary study by CNW Marketing/Research discovered that buyers expect to receive a discount of more than $3,000 from the list price of a new vehicle.
The JD Power 2002 Escaped Shopper and Owner Loyalty Study, based on responses from 30,300 first-quarter new-vehicle buyers, found that shoppers comparing two or more models typically buy the less expensive model (another interesting note).
Of the new-vehicle buyers who rejected at lest one model and who obtained 0% financing, nearly one-half rejected the other model because it didn't offer sufficiently low rates, the study said.
"Shoppers weigh theincentives of one model over another," said Chris Denove, partner at J.D. Power & Assoc. "But it doesn't matter how lower your incentives go--you lose your competitive advantage when EVERYONE else lowers their incentive just as much."
Still, the study adds fuel to the fire that's keeping incentives for the Big 3 at levels above $3,000 per vehicle.
"The industry is on this dangerous treadmill of incentive spending," Denove said. "The question is, at what cost?"
The surey also found that a dealership's sales staff can turn off shoppers to the entire BRAND. Overall , 16% of vehicle purchases are rejected because of the shopper's perception that the dealership treated them badly, Power said (another interesting note).
The study found that these shoppers typically buy a different brand rather than try to find another dealership selling the same vehicle they had considered, Denove said.
Meanwhile, in a year-long study of 110,000 new-vehicle shoppers, CNW found that buyers view discounts as key to their purchase plans.
"Among people who plan on financing their vehicles, those who haven't started shopping fully expect to save at least $2,600 off the (listed) price of the car," said Art Spinella, president of CNW Marketing in Bardon, Ore. "Once they start visiting showrooms, they expect $2,900. And once they've become serious about buying, that number becomes $3,400."
CNW estimates the Big 3 were offering more than $3,300 per vehicle in incentives during August. General Motors offered $3,392; Ford Motor Co., $3,478; and DaimlerChrysler, $3,116, it said.
Japanese automakers offered an average of $2,096 per vehicle in August, it said.
CNW's figures include lease subventions, financing offers and customer and dealer rebates. -Automotive News
Wow, 16% who were turned off by the dealership experience jump ship/brand all together. Reading here and .org it's probably more like 90%. :dunno:
Thought it was an interesting read...Although none of the numbers correlate with BMW numbers.
STUDIES: REBATES ARE STRONG POISON
LOS ANGELES- Suspicions confirmed: Fatter-than-ever incentives work too well and are hurting the industry, according to two new studies.
A JD Power & Assoc. study released last week found that perceived price advantage is the No. 1 reason shoppers choose one vehicle over another (interesting note). And a coollary study by CNW Marketing/Research discovered that buyers expect to receive a discount of more than $3,000 from the list price of a new vehicle.
The JD Power 2002 Escaped Shopper and Owner Loyalty Study, based on responses from 30,300 first-quarter new-vehicle buyers, found that shoppers comparing two or more models typically buy the less expensive model (another interesting note).
Of the new-vehicle buyers who rejected at lest one model and who obtained 0% financing, nearly one-half rejected the other model because it didn't offer sufficiently low rates, the study said.
"Shoppers weigh theincentives of one model over another," said Chris Denove, partner at J.D. Power & Assoc. "But it doesn't matter how lower your incentives go--you lose your competitive advantage when EVERYONE else lowers their incentive just as much."
Still, the study adds fuel to the fire that's keeping incentives for the Big 3 at levels above $3,000 per vehicle.
"The industry is on this dangerous treadmill of incentive spending," Denove said. "The question is, at what cost?"
The surey also found that a dealership's sales staff can turn off shoppers to the entire BRAND. Overall , 16% of vehicle purchases are rejected because of the shopper's perception that the dealership treated them badly, Power said (another interesting note).
The study found that these shoppers typically buy a different brand rather than try to find another dealership selling the same vehicle they had considered, Denove said.
Meanwhile, in a year-long study of 110,000 new-vehicle shoppers, CNW found that buyers view discounts as key to their purchase plans.
"Among people who plan on financing their vehicles, those who haven't started shopping fully expect to save at least $2,600 off the (listed) price of the car," said Art Spinella, president of CNW Marketing in Bardon, Ore. "Once they start visiting showrooms, they expect $2,900. And once they've become serious about buying, that number becomes $3,400."
CNW estimates the Big 3 were offering more than $3,300 per vehicle in incentives during August. General Motors offered $3,392; Ford Motor Co., $3,478; and DaimlerChrysler, $3,116, it said.
Japanese automakers offered an average of $2,096 per vehicle in August, it said.
CNW's figures include lease subventions, financing offers and customer and dealer rebates. -Automotive News
Wow, 16% who were turned off by the dealership experience jump ship/brand all together. Reading here and .org it's probably more like 90%. :dunno:
Thought it was an interesting read...Although none of the numbers correlate with BMW numbers.