Automotive ‘Escaped Shopper’ Study: Imports, Domestics Polarize Consumers

September 26, 2007

This article is included in these additional categories:

Automotive | Magazines | Retail & E-Commerce

With import vehicles making up nearly 49% of the US auto market, country of origin plays a crucial role in consumers’ choice of which vehicle make and model to purchase, according to the J.D. Power and Associates “2007 Escaped Shopper Study,” released today. The study evaluates why consumers may consider one model but purchase another.

Among the findings of the study:

  • Nearly 80% of new-vehicle buyers limit their consideration set to include either only domestic models or only import models.
  • Among those who cross-shop for both import and domestic models, consumers who ultimately buy a domestic frequently do so because they simply decide they do not want an import.
  • Buyers of domestic new vehicles also frequently decide against import brands for financial reasons, most often citing that the import didn’t offer aggressive rebates or other incentives.
  • Conversely, import buyers who reject a domestic model more frequently point to perceived vehicle attribute deficiencies, such as concerns about reliability, gas mileage or poor resale value.

The study also finds the following new-vehicle shopper behavior patterns:

  • Nearly 40% of all new-vehicle shoppers cite price as a key reason for rejecting a model. Interior (10%), the dealer experience (10%) and quality/reliability concerns (9%) follow as the most influential reasons for rejection.
  • Approximately 45% of new-vehicle shoppers took a test drive prior to rejecting a model, and nearly 25% of consumers tried to negotiate pricing before ultimately purchasing a different model.
  • More than 60% of rejecters indicate they researched a model on the internet.
  • More than 20% of shoppers claim the internet influenced their decision to reject a model.
  • Shoppers who researched a model by using the internet or by reading a magazine review are nearly half as likely (compared with shoppers who visit a dealership) to mention interior issues as the most influential reason for rejecting a model: 11% versus 5%.
  • Though price is a key issue among both hybrid and non-hybrid rejecters, consumers who shop for a hybrid are less likely to reject for price (53%) than consumers who shop for a non-hybrid model (59%).

“These findings point to continued difficulties for the Big Three in Detroit as they try to win back some of the market share they lost to the imports,” said Kara Steslicki, research manager of the automotive retail practice at J.D. Power and Associates. ” Reliability and resale value perceptions are difficult to change overnight, especially considering that people are already rejecting domestic vehicles because of this.”

“To win back market share, domestics are faced with two alternatives: either continue outspending imports on incentives, or find vehicle specific opportunities, such as styling or promoting a positive dealer experience, that can have an immediate impact on consumer perceptions of the brand.”

About the research: The 2007 Escaped Shopper Study is based on responses from 31,355 new-vehicle buyers surveyed between May and July 2007.

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