Maritz Auto: Incentives and Rebates: Auto Manufacturers Are Getting Less for Their Money
ST. LOUIS--Aug. 9, 2004--| Maritz New Vehicle Customer Study of 90,000 Auto Consumers Finds Incentives Have Less Impact on Purchase Decision |
Auto manufacturers may want to reconsider their marketing strategies in light of a new Maritz Automotive Research study that shows incentives and rebates are having a lessening impact on automobile purchase decisions. In addition, Maritz' 2004 New Vehicle Customer Study (NVCS) reports that while the average size of rebates/incentives has grown 10 percent year-over-year since 2002, consumers seem to be more blase about incentive offerings and manufacturers seem to be getting fewer long term benefits.
The 2004 Maritz NVCS is one of the largest new vehicle studies in the world with more than 90,000 respondents. The full report, "The Status of Rebates and Cash Incentives" is available at www.maritznvcs.com.
According to the Maritz study, auto consumers report the average dollar amount of the rebates and cash incentives continues to grow, while the cost to manufacturers as a percentage of the total new vehicle prices continues to grow also. The biggest jump occurred with domestic manufacturers who increased incentives/rebates from about $2,000 in 2002 to close to $2,800 in 2004.
"Auto manufacturers are stuck in neutral. Rebates and incentives are not having the same dramatic impact on purchasing as they once had," said Mike House, vice president and director of Maritz' automotive market analysis group. "There is concern that as interest rates rise and as manufacturers commit substantial dollars in the form of rebates and cash incentives, there will be minimal long term impact on market share." Indeed, the influence of rebates/incentives on customers' choice is declining for all but the Korean manufacturers, probably because the Koreans had a large increase in the percentage of customers receiving rebates/incentives in 2004. The decline from 2002 to 2004 is most evident among domestic manufacturers with only 30 percent of customers in 2004 citing incentive/rebate as a reason for purchase timing, down from 40 percent in 2002.
The Maritz study also reports that customer perceptions of their vehicles are not swayed by a rebate or cash incentive. In fact, satisfaction scores with new vehicles are flat for the three years investigated. "Manufacturers are getting little long-term benefit from the use of incentives," said House. "Although when first offered, rebates and incentives pushed consumers to enter the market sooner, but over time they have had less impact."
For further information and to purchase the Maritz 2004 New Vehicle Customer Study either in its entirety or by section, go to www.maritznvcs.com.
The Maritz Automotive Research Group's New Vehicle Customer Study annually surveys approximately 90,000 new car owners/lessees. Maritz has conducted the U.S. New Vehicle Customer Study since 1969. The study examines such topics as vehicle choice, purchase decisions, internet usage, shopping experience, financing and insurance, initial quality, vehicle usage, feature satisfaction, loyalty and aftermarket accessories. Other reports from the Maritz NVCS and automotive research topics are featured in Maritz Research's Research Report newsletter located at www.maritzresearch.com.
About Maritz Automotive Research Group
Maritz Automotive Research Group, a specialized sector of Maritz Research, is North America's largest automotive research firm serving the majority of auto manufacturers and allied industries. As one of the world's largest marketing research firms, Maritz Research, a unit of Maritz Inc., helps many of today's most successful companies improve performance through a deep understanding of their customers, employees and channel partners. Founded in 1973, it offers a range of strategic and tactical solutions concentrating primarily in the automotive, financial services, hospitality, telecommunications, retail and technology industries. The company has achieved ISO 9001 registration, the international symbol of quality. It is a member of CASRO and official sponsor of the American Marketing Association. For more information, visit the Maritz Research Web site at www.maritzresearch.com.
About Maritz Inc.
Maritz Inc., based in St. Louis, is ranked No. 166 on the most recent Forbes list of 500 Largest Private Companies. Maritz provides market and customer research, communications, learning solutions, incentive initiatives, meetings and event management, rewards and recognition, travel management services, and customer loyalty programs. Maritz has key offices in the United States, Canada, the United Kingdom, France, Germany, and Spain. For more information, visit the Web site www.maritz.com.