J.D. Power and Associates Reports: More Than Five Million New-Vehicle Shoppers Nationwide Use the Internet to Shop for New Vehicles
23 August 1999
J.D. Power and Associates Reports: More Than Five Million New-Vehicle Shoppers Nationwide Use the Internet to Shop for New Vehicles
New-Vehicle Shopping on the Internet Forecasted to Include More Than 65
Percent of New-Vehicle Shoppers by the End of 2000
AGOURA HILLS, Calif., Aug. 23 -- More than five million
new-vehicle buyers will use the Internet this year to gather information to
help them decide what vehicles to purchase, according to the J.D. Power and
Associates 1999 New Autoshopper.com Study(SM) released today. According to
the study, the percentage of new-vehicle shoppers using the Internet to help
them shop for a vehicle increased from 25 percent in 1998 to 40 percent during
the first quarter of 1999 and is projected to be more than 65 percent by the
end of 2000.
The study reveals that the average Internet shopper visits six automotive
Web sites and spends more than four hours looking up automotive information
online. This indicates that new-vehicle shoppers are relying more and more on
Internet research to help determine what automotive make and model to
purchase.
"More than one-third of the Internet shoppers surveyed report that they
crossed at least one vehicle off their shopping list as a direct result of
information they found online," said Chris Denove, director of consulting
operations at J.D. Power and Associates. "This is bad news for manufacturers
and retailers who want customers to test drive vehicles and not narrow their
vehicle selections based on cold hard facts alone."
The growing influence of the Internet is likely to hit domestic
manufacturers the hardest. The study shows that the more time a person spends
online, the less likely he or she is to purchase a domestic vehicle. Overall,
domestic manufacturers currently have approximately 70 percent market share;
however, this share drops to 58 percent among Internet shoppers. Furthermore,
only half the shoppers who submit a purchase request to an online buying
service purchase a domestic vehicle.
"The Internet puts added pressure on manufacturers to deliver quality
products and service" Denove said. "If a vehicle has a problem, you can bet
it will be posted on the Internet, and that is going to hurt sales."
The study also found that the percentage of people purchasing their new
vehicle through an online buying service more than doubled -- from 1.1 percent
to 2.7 percent since 1998 -- and may reach as high as 5 percent by 2000.
"Statistics show that the online buying services are saving people money,
and since price is the primary concern among Internet shoppers, you can't help
but to be optimistic about the future of online selling," Denove said.
Overall, Kelley Blue Book is the most frequently visited automotive Web
site, with half of all Internet shoppers visiting the Kelley Web site to
gather vehicle information. Among online buying services, autobytel.com is
the largest, accounting for 45 percent of all new-vehicles sold through an
online service.
Despite all the optimism about the Internet, the study identifies a few
areas where new-vehicle shoppers prefer doing business through traditional
methods. The study shows that the number of new-vehicle shoppers using the
Internet to finance their vehicle remains very low, and that most Internet
shoppers do not intend to return to the Internet for help with maintaining
their vehicle.
Headquartered in Agoura Hills, Calif., J.D. Power and Associates is a
global marketing information services firm operating in key business sectors
including market research, forecasting and customer satisfaction. The firm's
quality and satisfaction measurements are based on actual customer responses
from more than one million consumers annually.
J.D. Power and Associates can be accessed through the World Wide Web at
http://www.jdpower.com. This press release is provided for editorial use only. No
advertising or other promotional use can be made of the information in this
release or J.D. Power and Associates survey results without the express prior
written consent of J.D. Power and Associates.