Online Product Information is More Influential Than Price to New-Vehicle Shoppers - We've Been Saying This For 10 Years! - It's Nice to be Right!

J.D. Power and Associates Reports:

New-Vehicle Buyers Using the Internet Reaches Record Levels

WESTLAKE VILLAGE, Calif.: 29 September 2005 —Product-related information has become the primary focus for new-vehicle shoppers who use the Internet to research models, significantly surpassing price information for the first time, according the J.D. Power and Associates 2005 New Autoshopper.com Study released today.

The study finds that while some shoppers know which vehicle they are looking for before going online, 79 percent of automotive Internet users are impacted in their vehicle selection by information found online. This compares to 78 percent who are impacted in how much they paid or offered for the vehicle they purchased.

“Automotive Internet usage has gone through a tremendous transformation in its 10-year history,” said Dennis Galbraith, senior director of online marketing solutions at J.D. Power and Associates. “Initially, the Internet was primarily thought of as a tool for getting the best price on a vehicle. Today, consumers are even more impacted by the Internet in which vehicle they buy than how much they pay for it.”

Along with this trend, manufacturer Web site visitation continues to increase among all new-vehicle buyers, while visits to independent sites (sites not controlled by a vehicle dealer or manufacturer) remain flat. On average, buyers say they rely most on manufacturer-sponsored sites for product information and on independent sites for price-related information.

While the majority of buyers visit the brand’s Web site before they purchase a model, they typically visit a multitude of sites before finalizing their vehicle selection. For every manufacturer, at least 80 percent of their site visitors who buy a new vehicle will visit at least one other manufacturer site.

“There is tremendous market share at stake in the battle to turn site visitors into buyers,” said Galbraith. “Manufacturers will continue to move hundreds of millions of marketing dollars toward their online efforts and will become more efficient marketers in the process.”

At the same time, consumers are using the Internet to adjust to the fact that there are more models to choose from and more options and accessories to customize vehicles.

“A greater emphasis on finding the right vehicle is good for consumers,” said Galbraith. “Vehicle depreciation is so high that the cost of buying the wrong vehicle can be far greater than the cost of paying a few hundred or even a few thousand dollars more than a better negotiator might have paid. In practice, most vehicle buyers are minimizing the risk of buyer’s remorse by using the Internet to find both the right vehicle and the right price.”

A record high 67 percent of new-vehicle buyers use the Internet in their vehicle shopping process—up from 64 percent in 2004. Nearly all (89%) of these consumers visit a search engine or portal (such as AOL, Google, MSN and Yahoo!) as part of their shopping process. Seventy-seven percent of these consumers visit at least one independent Web site and typically visit this type of site first in their vehicle shopping process.

“Independent sites are likely to add robust tools to help shoppers identify the right vehicle across all brands for their particular preferences or lifestyle,” said Galbraith. “There remains a great deal of content opportunity for independent sites.”

About J.D. Power and Associates Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education and BusinessWeek. The Corporation has more than 300 offices in 40 countries. Sales in 2004 were $5.3 billion. Additional information is available at http://www.mcgraw-hill.com.