Experian Finds Longer Vehicle Ownership Reduces Brand Loyalty

SCHAUMBURG, Ill. — Experian Automotive found that the longer consumers owns their vehicles, the less likely they are to buy their next vehicle from the same brand. Average length of ownership in the first quarter of 2014 was 7.75 years, a number which correlated with a brand loyalty rate of 49.5%.

In Experian’s analysis, the company found that owning a car for one year held a brand loyalty rate of 57.3%, while owning it for 12 years had a brand loyalty rate of 33.8%. While the drop in brand loyalty was consistent with ownership length, the largest change came after 3 years of ownership. That's when brand loyalty dropped off by 10 percentage points.

“Leases with their fixed length ownership cycle are typically strong contributors to brand loyalty,” said Brad Smith, director of automotive market statistics for Experian Automotive. “Over the course of seven years of ownership, a lot of things change, including vehicle product offerings, vehicle budget and credit score.”

He also added that the more time a customer had between dealer interactions, whether for service or sales, the higher the probability they would leave the brand.

Experian found that Ford and Subaru had the highest brand loyalty at 61% and 59.4%, respectively, but Ford had a much higher average length of ownership at 110 months. Dodge and Buick shared the longest average ownership length however; both companies had poor loyalty rates at 22.6% and 38.4%.

“Understanding how long consumers hang onto vehicles, or how often then return to market and purchase the same brand, are critical pieces of information for automotive dealers, retailers and manufacturers,” said Smith.

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Experian Finds Longer Vehicle Ownership Reduces Brand Loyalty
Experian Finds Longer Vehicle Ownership Reduces Brand Loyalty

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Avg. New-Vehicle Transaction Price Up $3,900 Since 2009

By: Admin

Rising transaction prices for new vehicles have been a big contributor to the health of the auto industry this year, J.D. Power analysts reported this week. They noted that the average new-vehicle transaction price has risen $3,900 since 2009 to $29,600.

Current transaction prices for new vehicle and the rise in sales could push up the value of vehicles purchased to the highest level ever at $407 billion, J.D. Power noted.

“When defining success in the auto industry, whether it is for a specific segment, manufacturer or model, it’s important to look beyond basic sales figures,” said Thomas King, vice president of J.D. Power’s Power Information Network.

King noted that not all vehicle segments have performed equally, with some delivering stronger volumes and lower price growth while others realized greater price growth but weaker sales. Retail sales in the large pickup segment, King pointed out, have increased 4.6% this year, which is below the overall industry sales increase of 5.7%. However, the average price of a pickup has risen by $2,700 over that same period, a gain of 7.5% compared to the industry average of 2.3%.

“From a sales perspective, large pickups have grown slightly slower than the industry overall, but from a price perspective, they have significantly outperformed the industry,” said King.

By contrast, compact SUVs have demonstrated exception retail volume growth of 22.1% so far this year. The average transaction price for models in this segment, however, have changed only slightly by an average of 0.6%. It is these statistical differences that is driving J.D. Power's belief that sales numbers alone do not provide the best overall picture of industry success.

“With the rapid growth of average transaction prices over the past few years, success needs to be defined more broadly to include overall revenues in addition to sales volumes,” said King.

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Avg. New-Vehicle Transaction Price Up $3,900 Since 2009
Avg. New-Vehicle Transaction Price Up $3,900 Since 2009

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Braman Motorcars Implements LoJack Inventory Management

ANTON, Mass. — LoJack Corporation has deployed its LoJack inventory management system with South Florida's Braman Motorcars, a top 30 dealer group. The new inventory management system will help deliver an accurate location of vehicle inventory across multiple lots, helping to minimize the time required in the regular dealer inventory process.

LoJack is working with Braman to further refine the system that uses a telematics platform and a proprietary user interface.

"LoJack has had a long tradition of bringing products to dealerships that help boost their bottom-line profits," said Hal Dewsnap, senior vice president and general manager of U.S. sales at LoJack. "Braman Motorcars is one of the South's most respected and successful dealerships, and we're proud to help improve their inventory process and help build their business through an inventory management system. Many dealers have asked LoJack to help them obtain a better solution for lot management for their vehicle inventory —we listened, and we think we have delivered."

The inventory management system helps sales personnel at dealerships locate vehicles across the various lots that larger dealers sometimes cope with to handle their inventory of vehicles. The system also warns dealers of low battery voltage on vehicles, allowing them to expedite the work of keeping batteries charged; dealers only need to work on those vehicles that need charging, and can skip the time-wasting work of checking the battery levels on already-charged vehicles, officials said.

With the LoJack inventory management system, dealers no longer have to worry about bringing a customer to a vehicle for a test drive, only to discover that the vehicle has a dead battery. Additionally, the inventory management system can help avoid battery-related customer delays when they arrive to pick up the car, avoiding potentially damaging Customer Satisfaction Index (CSI) scores.

The LoJack inventory management system is available on the computer and for mobile workers. Employees will be able to see the location of their vehicle directly on their smartphone or tablet computer, obtain additional information about each vehicle quickly, track test drives and get an early warning movement alert through geo-fencing.

"At Braman Motorcars, we constantly evaluate our work processes to deliver the highest possible level of customer service," said Evan Bernstein, senior controller at Braman Motorcars. "The Inventory Management System from LoJack can help us reduce cost, while streamlining the process to deliver on that customer service excellence promise."

Kp>In addition to using the inventory management system, Braman loads the LoJack Stolen Vehicle Recovery System at their West Palm Beach Auto campus, which includes BMW, Mini, Audi, Bentley, Rolls-Royce and Porsche brands.

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Massachusets High Court Rules in Favor of Tesla
Massachusets High Court Rules in Favor of Tesla

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ADP Dealer Services Spinoff Now Listed on Nasdaq

BY: Admin

CDK Global Inc. was officially spun off from Automatic Data Processing Inc. on Tuesday, September 30, 2014. The new independent company begins trading as a member of the S&P MidCap 400 Index.

“This is a monumental day in our history and marks the next step of our journey,” said Steve Anenen, president and CEO of CDK Global. “There are many driving forces impacting this industry — consumers expecting an improved buying and service experience, and dealerships and manufacturers who see the value of innovative technology to improve productivity and profitability.

“As the global technology partner of choice, we are well positioned to provide ‘mission critical’ digital marketing and retail technology services to move this industry faster forward."

As a result of the spinoff, ADP shareholders received one share of CDK Global stock for every three shares of stock they held in ADP on Sept. 24, 2014. Approximately 160.6 million shares of CDK Global stock were distributed on Sept. 30, 2014, to ADP shareholders.

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ADP Dealer Services Spinoff Now Listed on Nasdaq
ADP Dealer Services Spinoff Now Listed on Nasdaq

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Industry Could Realize Best October Since 2004, Say Analysts

BY Admin

The October retail sales forecasts from J.D. Power and Kelly Blue Book are in, and they are predicting a solid sales month in what is traditionally the second weakest month of the year for car sales. More than 1.1 million cars are expected to be sold in October, a prediction that will mark the best October since 2004 if realized, J.D. Power noted.

This October is expected to be about 6% better than a year ago, which is great, KBB noted, considering that Labor Day deals in September and Black Friday deals in November typically keep consumers off dealer lots in October. The driver, the vehicle information site said, are incentives.

“One cause for concern is the rising levels of incentive spending in the industry,” said Alec Gutierrez, senior analyst for KBB. “Since inventory levels have remained consistent, this isn’t a red flag quite yet, but it does underline that the natural industry growth we’ve had in recent years is slowing.”

Both companies expect the industry SAAR for total light vehicle sales to hold at more than 16 .3 million units, with J.D. Power noting that growth in SUV sales has been a boost to the industry.

“The market is clearly seeing a second wave of SUV popularity that will likely dominate market share for the foreseeable future,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.

KBB noted that Fiat Chrysler enjoyed another strong month, with growth approaching 20% mostly on sales of the Jeep Cherokee. Without the popular SUV, KBB predicted that the company’s growth would have been significantly lower.

The popularity of compact SUV’s in particular has made it the fastest growing segment in the market cutting into sales of compact and mid-sized cars, according KBB. The firm also found that the light pickup truck market was growing as well.

“Big gains are expected from the Ram pickup and solid numbers should be reported for both the Chevrolet Silverado and GMC Sierra,” said Gutierrez.

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Industry Could Realize Best October Since 2004, Say Analysts
Industry Could Realize Best October Since 2004, Say Analysts

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