1996 National Study Supplement
Management White Paper

Next Time in the Market

April, 1996

Contents

• Introduction
• Methodology
• Timing of Next Vehicle Purchase
• Timing of Next New Vehicle Purchase
• Timing of Next Used Vehicle Purchase
• Timing of Domestic vs. Import Nameplate Purchases
• Term of Ownership

Introduction  Top

This 1996 Management White Paper is being provided by The Dohring Company as a supplement to our 1996 National Automotive Consumer Study.

The national study, provided as a service to the automotive industry, focused on the most topical issues of the day including:

• Consumer attitudes and perceptions of franchised car dealerships
• One-price selling versus negotiating the purchase
• Purchasing new vehicles versus late model used vehicles
• Used car superstores

This white paper is intended to provide in-depth answers to help you better understand the consumer perspective on specific issues.

The national study has not been funded by any outside source and is strictly provided as a service. The design intention was to address several primary areas of importance to our automotive, OEM supplier and dealer client base.

The Dohring Company is North America's largest provider of custom market research to the retail automotive community. We have conducted more that 3,000 automotive market research studies for dealers, dealer associations, advertising agencies, manufacturers and suppliers in North America and internationally. The company, based in Glendale, California, employs over 100 full time staff and has conducted over 300,000 interviews with vehicle buyers in 1995 alone, and over one million in the past ten years.

Additionally, we are proud to have been designated Marketing Research Supplier to the 1996 Atlanta Olympic Games.

The Dohring Company is a full-service provider of marketing research and the developer of TrendTrak®, our exclusive on-site survey polling device. For additional information, please contact us at 1-800-242-8022.

Methodology  Top

A total of 1,253 respondents were surveyed from across the 50 United States in proportion to their household populations. All respondents were surveyed by telephone during December 1995, and were qualified as intending to purchase a new or used vehicle in the future from a new car dealership. The study has a standard error of ± 2.8%.

Timing of Next Vehicle Purchase  Top

All respondents were asked when they feel they will most likely purchase their next vehicle and the top response (27%) was that they expect to purchase their next vehicle in 1 to 2 years. The average expected timing of their next vehicle purchase is approximately 2.7 years.

Timing of next vehicle purchase:

Timing of Next New Vehicle Purchase  Top

Comparing the responses for those who intend to purchase a new vehicle next against last year's results, a greater percentage of new vehicle buyers are intending to purchase their next vehicle within the next two years (49.6%) than did so a year ago (45.3%). This represents an increase of 9.5% of new vehicle buyers who intend to purchase their next new vehicle within two years. There is also a greater number of new vehicle buyers who intend to put off their next vehicle purchase for more than 6 years.

Timing of next New vehicle purchase:

Timing of Next Used Vehicle Purchase  Top

Comparing the responses for those who intend to purchase a used vehicle next against last year's results, a smaller percentage of used vehicle buyers are intending to purchase their next vehicle within the next two years (48.7%) than did so a year ago (53.2%). This represents a decrease of 8.5% of used vehicle buyers who intend to purchase their next used vehicle within two years, and a greater number of used vehicle buyers intend to put off their next vehicle purchase for 3 years or more, than did a year ago.

Timing of next New vehicle purchase:

Timing of Domestic vs. Import Nameplate Purchases  Top

Those intending to purchase European nameplate vehicles, on average, intend to purchase these vehicles much sooner than those intending to purchase Domestic or Japanese nameplates.

Average Timing of Next Vehicle Purchase:

Term of Ownership  Top

By comparing when vehicle owners purchased their current vehicle and when they intend to purchase their next vehicle we can obtain insight into automotive consumers' intentions or expectations regarding the term of ownership of their current vehicles or how long they intend to use them before purchasing another vehicle.

Buyers who currently own vehicles they purchased new intend to replace these vehicles, on average, at about 5.9 years, while buyers who currently own vehicles they purchased used intend to purchase their vehicles, on average, at about 5.0 years.

Buyers who currently drive European nameplates, on average, intend to replace these vehicles sooner than those who currently drive Domestic nameplates and those who currently drive Japanese nameplates, on average, intend to retain these vehicles much longer than those who currently Domestic or European nameplates.

Average expected term of ownership:

Buyers who currently drive minivans intend to replace these vehicles sooner than buyers who currently drive sport utility vehicles, light trucks or passenger cars.

Average expected term of ownership:

Younger buyers intend, on average, to replace their vehicles sooner than older buyers.

Average expected term of ownership:

Breaking this down further into male vs. female for each age category, females tended to fall into two categories, those under 35 years of age intend to replace their vehicles, on average, every 4.9 years, while those over 35 years of age intend, on average, to replace their vehicles every 6 years or so. For the males, males 18 to 25 years old intend, on average, to replace their current vehicles in 4.4 years and increasingly older age categories of males intend, on average, to hang on to their vehicles longer then the younger age categories.

Average expected term of ownership: