Topic: industry insights
Last week, one of our Gurus, Audrey, had the chance to attend Google’s Think Auto 2019. The event was packed with interesting insights and takeaways for those in the automotive industry. One interesting topic that came up was the idea that changing customer desires and technological disruption are pushing the Canadian automotive industry to a competitive tipping point. In other words, to win in today’s market, dealers need to make data their competitive advantage.
At CarGurus, we’re always looking for ways to share more industry insights with our valued dealers. Today, our Director of Automotive Industry and Economic Analysis, George Augustaitis, takes a look at the ZEV landscape in Canada.
The Chevrolet Bolt and Nissan Leaf are poised to lead EV market in Canada
The Chevrolet Bolt and Nissan Leaf brands are both primed to take advantage of the new federal ZEV credit in Canada. Both vehicles are produced in the US and the days’ worth of supply for both vehicles is over 100. As of April 2019, Chevrolet Bolt had 191-days’ worth of supply and the Nissan Leaf had 128, meaning the US is well stocked and both OEMs can focus on shipping inventory to meet demand in Canada created by the ZEV federal program. This creates the fundamental base that will allow the brands to act quickly and take advantage of early demand of the ZEV program.
Every year, Canadian consumers change their shopping behaviour with the speed of a finely-tuned CASCAR champion. How do dealers reach and capture this constantly evolving market?
Like their counterparts in other parts of the world, Canadian consumers are time-starved and impatient. Whether their day includes a commute on the 401 or Granville Street, their time is short and their attention span is shrinking. According to the National Post, the average Canadian consumer has an attention span of just eight seconds, even less than a goldfish. The culprit? Portable devices.
The proof is evident in Canadian consumer visits to dealerships, which are now at 1.9, according to Google Think Auto. They’re spending even more time online, checking dealer websites, third-party reviews, OEM websites, and social media like Facebook, Twitter, and YouTube. Google also notes that 84 per cent intend to do more online research to further reduce their dealer visits next time they’re purchasing.
As Canadian car consumers continue their infatuation with the internet, dealers are sharpening their digital marketing tools to meet the expectations of these demanding consumers.
Leading the charge are the millennials, and with good reason. By 2020, it’s estimated that 40% of new car buyers will be millennials. And 88% of current millennials already use the internet to research a new car purchase.
Automakers have already felt the impact of this cohort. Millennials are less interested in test drives, preferring to do their research on social media and dedicated websites before they even step into a dealership. At that point, they’ve pretty much made up their mind.
But it’s not just millennials. An Ipsos survey for Canadian Black Book found that car buyers make only an average of two dealership visits. That’s a steep decline when compared with the half a dozen visits buyers made barely a decade ago.
Younger Canadians are buying cars, but you need to meet them on their terms
Type the words “millennials are…” into Google, and the resulting auto-complete options present some fascinating insights into how people regard this key consumer segment.
Among the most prevalent themes is how they are undermining entire industries, contributing to declining sales for everything from diamonds and golf to everyday items like bar soap, cereal, and napkins.
Millennials are Canada’s largest generational cohort—about 9.8 million people—and boast combined annual income of $237 billion. Businesses are understandably anxious about the impact of falling out of favour with such a powerful consumer segment.
The good news for the auto industry is that it has been largely immune to millennials’ changing priorities. The “bad news” is that it can no longer rely on tried-and-true tactics to attract, engage, and retain them.
Instead, millennials are demanding that car companies and their dealer networks meet them on their terms. That means not only offering features like connectivity, but communicating with them via their channels of choice.