Polk Study Reveals Consumers' Traditional Values Help Drive Entry-Level Car Business POLK LOGO Polk logo. (PRNewsFoto)[JL] SOUTHFIELD, MI USA 01/04/2001
4 January 2001
Polk Study Reveals Consumers' Traditional Values Help Drive Entry-Level Car Business POLK LOGO Polk logo. (PRNewsFoto)[JL] SOUTHFIELD, MI USA 01/04/2001
Expanding 'Entry' Segment Requires 'Being in Tune' with Car and Truck Buyers
DETROIT, Jan. 4 A study released today by Polk shows that
"traditional value" buyer needs, such as reliability, economic value and
practicality, continue to influence consumers' decisions to purchase a small
car in the United States.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010104/DETH036LOGO )
Lonnie Miller, performance consultant for Polk said, "It should be
comforting to manufacturers offering models in this segment to know that
people still base their decision to buy an entry-level car on age-old needs.
In many ways, they aren't having to chase a potentially different type of
person."
"Best Description" for What Was Sought in New Vehicle
Small Car Buyers All Segments
"Reliability" 25.0% 16.2%
"Economical" 21.5% 4.6%
"Practical" 12.0% 6.6%
"Value" 7.5% 3.8%
Source: Polk's Manufacturer Loyalty Excelerator(TM) Survey,
1st 6 Months of 2000 Model Year
Most Important "Life Event" that Changed and Motivated New Vehicle
Purchase
Small Car Buyers All Segments
Condition of older vehicle changed 25.2% 22.4%
Income/budget/finances 16.3% 11.3%
Work locations/primary residence 8.5% 4.4%
Amount of driving 7.4% 4.6%
Source: Polk's Manufacturer Loyalty Excelerator(TM) Survey, 1st 6 Months
of 2000 Model Year
Polk identified other value-based issues motivating entry-level car
buyers. Out of all passenger vehicle segments in the industry, small car
buyer households are overwhelmingly most likely to wait 10 years or more to
buy or lease a new vehicle (9.5 percent mentioning this time frame compared to
3.5 percent for all new vehicle buyers). Reinforcing this is the fact that
more than 25 percent of small car buyers said the "condition of their older
vehicle changed" and was the single most important "life event" that
influenced them to acquire a new car or truck.
"In light of these findings, automakers should be very excited about
reducing the buying cycle among this entry-level group," said Miller.
"Although we know many people seek to drive a car that meets their basic
needs, successful products and relationships that impress these consumers can
turn into a profitable, long-term investment for the automaker. And in the
case of small car buyers, we see over half of them being loyal to the
manufacturer after the entry-level purchase."
Under current product strategies, some may argue that the general class of
"entry-level" vehicles not only includes the small car set, but also those in
the mini-SUV and compact pickup groups. Several manufacturers attract first-
time or college-graduate buyers by emphasizing their compact pickup in
addition to their small car models. Others try to win business with the
excitement of a nimble and less expensive, yet functional mini-SUV. With the
attraction of compact pickups and mini-sport utility vehicles, first time
buyers have had other "small" type vehicles to consider. Despite this, what
is currently attracting the typical small car buyer?
One answer to this is multi-vehicle owning households need to have at
least one vehicle in the driveway that can be relied upon for practical, more
fundamental needs as drive-time increases with a growing number of families
moving out of cities and urban areas into more rural locations. Reinforcing
this point, 32.3 percent of all small car buyers, more than any share among
all other buyer segments, said "gas mileage" was of "critical importance" to
them when they bought their new vehicle. Interestingly, less than two percent
of all small car buyers said they were looking for a vehicle that was
"comfortable" as their main reason for the purchase.
Supporting these findings, Polk cited that more than 30 percent of small
car buyers also had a midsize car at the time of their entry-level purchase.
Additionally, nearly one in four small car buyers formerly owned a pickup
truck and 17 percent owned an SUV at the time of their new purchase.
"While the effort to package an affordable product line for people who
aren't looking to spend a substantial amount is wise, we know there are key
differences between different sub-groups who are targeted in this general
'entry-level' class," said Miller.
Polk's analysis indicates a generally weak common profile between those
buying small cars, mini-SUVs and compact pickups. However, one general
observation is that while more than half of all entry-level buyers fall in the
35 to 54-year-old range, small cars do have the highest concentration of
buyers under 30.
About Polk
Polk has served the automotive industry for nearly 80 years and is the
longest standing curator of automobile records in the United States. Founded
in Detroit in 1870, Polk launched its motor vehicle statistical operations in
1922 when the first car registration reports were published. It now provides
automotive solutions to nearly every segment of the motor vehicle industry as
an analytical consultant and statistician, as a provider of database-marketing
services, as a supplier of vehicle histories and as a data enabler for
geographic information systems. Based in Southfield, Mich., Polk is a
privately held global firm, currently operating in Australia, Canada, China,
France, Germany, Holland, Spain, the United Kingdom and the United States.
"Entry Level" Buyer Comparisons
Characteristic Small Car Mini-SUV Compact Pickup
Buyer Buyer Buyer
Best description of what "Reliability" "Functionality" "Functionality"
was being sought in new (25.0%) (16.1%) (25.7%)
vehicle
Largest Minority Ethnicity Asian African American Asian
(5.2%) (5.9%) (3.6%)
Age: % Under 35 Yrs. Old 17.4% 13.9% 12.7%
% 35 - 54 Yrs. Old 51.6% 54.1% 52.4%
% 55+ Yrs. Old 31.0% 32.0% 35.0%
% Male/% Female Split 53.6%/46.4% 60.6%/39.4% 75.4%/24.6%
% Buying Vehicle Every
10+ Yrs. 9.5% 3.4% 2.5%
Source: Polk's Manufacturer Loyalty Excelerator(TM) Survey, 1st 6 Months
of 2000 Model Year