Improved Consumer Knowledge and Collaborative Approaches Can Drive Automotive Industry Growth
DETROIT & PARIS--Nov. 1, 20048, 2004--| Consumers Hold the Key to Sales and Margin Gains as Auto Companies Face Challenging Times, According to New Global Survey From Capgemini |
Better consumer knowledge, integrated marketing, optimized lead management, stronger web strategies, and collaboration between dealers and manufacturers are critical to improving automotive performance, according to the sixth annual Cars Online study from Capgemini. Across the vehicle lifecycle, consumers demonstrate needs, wants and preferences that are not always met by the industry. As a result, automotive manufacturers and dealers are missing important opportunities to improve sales and profitability.
The global study revealed growth opportunities in areas such as marketing, Internet capabilities and aftersales servicing. For instance, as consumers move in market for a vehicle, they are more likely to respond to targeted direct-mail offers, a growing but still underutilized marketing tool in the industry. And it's evident that a strong web strategy and execution can impact buying decisions. Half of consumers say having the web features they consider most important - such as price and product information, cost calculators and vehicle configurators - would make them more likely to buy from that car manufacturer.
The research also identified some key changes in the automotive buying cycle. For instance, while consumers may move into the market for a new vehicle 12 months before purchase, they do not necessarily begin the research process until closer to the time they plan to buy. And they often don't "activate" - that is, focus on specific terms - until one to three months prior to purchase. It is during this time frame that the role of marketing becomes critical for automotive companies in order to ensure that their vehicles are included in the consumer's consideration set.
"Cars Online provides insight into the factors that drive automotive buying behavior and impact consumers' relationships with manufacturers and dealers," said Michael Wujciak, Vice President and Managing Director, Global Automotive Sector, Capgemini. "That insight is crucial in today's challenging environment, where automotive companies face pressure to launch more products faster and to reduce costs, as well as increased globalization of the supply chain, the growth of emerging markets, rapidly changing technology and increasing customer expectations."
The study - which surveyed consumers, dealers and manufacturers in Canada, United States, United Kingdom, France, Germany, Sweden, Italy and, for the first time, China - compares consumers' actual needs, demands and preferences with dealers' and vehicle manufacturers' perceptions. The report focuses on topics such as consumer behavior, lead management, the Internet and aftersales/servicing.
Key findings from the Cars Online 04/05 study include:
-- Brand loyalty surpasses dealer loyalty. More than half of consumers say they are likely to purchase or lease the same brand of vehicle that they currently own, while about 40% will buy from the same dealer. Owners of BMW, Volvo, Toyota, Honda and Mercedes indicate a high degree of loyalty to the make of vehicle.
-- All consumers are not created equal - and should not be marketed to as such. The data make it clear that the automotive consumer base is increasingly segmented, with groups such as "utilitarian" and "trendy" buyers demonstrating different buying behavior.
-- Practical basics drive vehicle decisions. When it comes to their vehicle choices, consumers care most about basics such as price, fuel economy, build/quality and aftersales service. This doesn't mean that factors such as low financing and cash-back incentives aren't important to consumers. However, an integrated promotional program that focuses on other key consumer criteria and relies less heavily on incentives may be more effective in the long run.
-- Manufacturers are not optimizing their lead management process. By their own assessment, only 15% of manufacturers rate their lead management system as "very advanced." The ramifications include a delay in getting leads to the dealer, inadequate lead information, leads that are not well qualified, slower response time to the consumer, lack of lead follow-up and, ultimately, less traffic in the dealer showroom. It's also clear that consumers increasingly view lead management as a service. Thanks to interactive tools such as the Internet, automotive customers are no longer unwilling participants but rather they want to be in control of the selling process. In addition, they have certain expectations about the service they should receive during this process.
-- A strong website strategy and execution can impact consumer buying decisions, improve lead capture and drive sales. The web continues to grow in importance as an information resource for automotive consumers and can influence their purchasing decisions. The key for automotive companies, however, is to ensure that their site offers more than just cool features and zippy graphics. What consumers really want is the ability to accomplish specific tasks. An effective web strategy can also provide manufacturers with an opportunity to improve lead capture via the Internet. For example, of those consumers who visit third-party automotive websites, about half do so only after having first visited a manufacturer's site.
-- Aftersales/servicing represents an important - but underutilized - opportunity to gain repeat customers and build brand loyalty. The aftersales market has the potential to not only improve profitability but also to drive vehicle sales. About half of consumers say they are likely to buy the same brand of vehicle they currently own from the same dealer they use for servicing.
-- China emerges as a strong growth market with unique dynamics. The addition of China to this year's Cars Online research provides a view of this emerging automotive market and how it differs from the more mature North American and Western European markets. For instance, Chinese consumers are much more likely to be in the market for a new rather than a used vehicle and they are far less loyal to either the brand or dealer.
"Understanding exactly what customers are looking for, how they shop for vehicles, what leads them to buy and how to maintain their loyalty are challenges that face every automotive company. Without this knowledge - or with inaccurate knowledge - companies are hard-pressed to improve the customer experience and their own business performance," said Robert Taylor, Vice President, Automotive Global Customer Relationship Management (CRM) Leader, Capgemini. "The research makes it clear that achieving growth will require more effective collaboration between manufacturers and dealers through initiatives such as CRM and the use of advanced technologies that can better enhance targeted messaging, increase efficiencies and improve delivery of services to the consumer."
About Capgemini
Capgemini, one of the world's foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business Experience. Through commitment to mutual success and the achievement of tangible value, the company helps businesses implement growth strategies, leverage technology, and thrive through the power of collaboration. Capgemini employs approximately 60,000 people worldwide and reported 2003 global revenues of 5.7 billion euros. More information about individual service lines, offices and research is available at www.capgemini.com.
About Capgemini's Global Automotive Practice
Capgemini's automotive practice serves 14 of the world's 15 largest vehicle manufacturers and 10 of the 12 largest automotive suppliers. Our automotive sector generates value for companies through automotive-specific service offerings and global delivery capabilities. Capgemini's Collaborative Business Experience makes automotive companies stronger by combining what they do best with what we do best to improve performance.