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NAMAD, IHS reveal Diversity Volume Leadership Awards

The National Association of Minority Automobile Dealers and IHS Automotive have partnered together to create their first Diversity Volume Leadership Awards.

These awards will recognize makes and models that garner the highest new-vehicle volume registrations based on model year for the following consumer segments:

• Ethnic consumers (consumers of African-American, Asian, Hispanic or Native American descent)
• Women (of any ethnicity)
• Ethnic millennials (new vehicle registrants aged 18-34)

The recipients of these awards will be determined based on IHS Automotive's new-vehicle registration data from the 2015 model year (registration volumes from October 2014 through September 2015).

IHS says this year’s awards are based on more than 13 million new-vehicle registrations.

"Ethnic buyers represented 28 percent of all U.S. new-vehicle registrations in 2015, and are one of the fastest growing audiences," said Marc Bland, vice president of diversity and inclusion at IHS Automotive. "In the past year, their volumes have grown 150 percent faster than the rest of the industry — and it's important to recognize their influence on vehicle purchases and honor the brands that dedicate resources to diversity efforts."

The Diversity Volume Leadership Awards will include the following categories, according to NAMAD:

"This awards program will recognize the brands that the multicultural community is buying and also recognize manufacturers that are dedicating marketing efforts to this growing segment," said Damon Lester, NAMAD’s president.

The winners will be announced during the Diversity Volume Leadership Awards before the North American International Auto Show on Jan. 10.

Millennials score highest on vehicle ‘Customer Love Index’

Would it surprise you to find out that members of the Generation Y cohort may actually “love” their vehicles, on average, more than other generations?

That was the finding of Strategic Vision’s research on the subject, which they began after identifying “love” as the “holy grail of the customer experience.”

This led to the creation of its “Customer Love Index,” or CLI, to determine which vehicles are most loved by their owners.

According to the company’s quantitative New Vehicle Experience Study, which surveyed feedback from over 44,000 new-vehicle owners, the average CLI score came out to about 400. Millennials came in at 470.

They also found that these millennials are much more likely to purchase mass-market vehicles that weren’t necessarily designed to be “loved,” while also “loving” them just as much, or more, than other generations love more expensive vehicles.

According to Strategic Vision, though, this is nothing new, and shouldn’t be viewed as something millennial-specific —  more often than not, the younger generations have tended to be more enthusiastic about such things.

“As new younger buyers enter any market they essentially crush hard on their choices, believing that their first love will always be their only,” said Christopher Chaney, senior vice president of Strategic Vision. “Of course, this isn’t new to millennials. Every generation in their youth can remember their first love and the deep emotional impact it had on their lives, and future decisions in life.”

Looking at the overall results, the Porsche Macan scored the highest on the CLI rankings, coming in at a score of 629, one of only two vehicles to score over 600 (the other being the Chevrolet Corvette convertible).

Which segment had the least love? While it was a vehicle in the minivan category that scored the lowest overall when separated by segment-leaders, Strategic Vision pointed out that, overall, minivans obtained higher CLI scores than most of the hybrid vehicles surveyed.

“Most U.S. customers will not spend more than an additional $50 per month for a vehicle just for MPG enhancing or environmentally friendly powertrain,” said Alexander Edwards, Strategic Vision’s president. “Instead, creating a product that customers can love will allow buyers to spend significantly more money because it has the right balance of styling, innovation, performance and environmental friendliness.”

Without further ado, here’s the full list, provided by Strategic Vision.

One final point of interest: while not reflected in the chart above, the manufacturer with the lineup of vehicles with the highest overall CLI scores was Volkswagen Group of America. Strategic Vision felt it was important to point out that this finding was based on data collected prior to September 2015.

According to a release from Strategic Vision regarding the finding, they had the following message on the subject: “The good news for VWGoA is that they will be working from a position where customers have initially loved their experience. When love is lost, that’s when the real work begins.” 

Tech trumps brand & color for new-car shoppers

What are shoppers paying the most attention to when in the market for a new vehicle?

Color and brand apparently pale in comparison to the importance new-car shoppers are putting on vehicle technology.

That’s according to Autotrader's "2015 In-Vehicle Technology Shopper Influence Study," which provides insight into how vehicle technology impacts consumer vehicle purchase behavior.

This past September, Autotrader commissioned KS&R Inc. to survey online 1,012 U.S. vehicle owners who are shopping around for their next vehicle.

The study, which is in its second year, showed nine out of 10 consumers likely to buy a vehicle in the next year said they have a plan to research the latest vehicle technologies in their search.

Specifically, 77 percent of respondents said a vehicle with all the tech features they want is more important than the car’s color.

And innovative car technology is apparently swaying buyer loyalty, too. Sixty-five percent of those surveyed said they wouldn’t have a problem switching vehicle brands to get all of the tech features they want in their next vehicle.

"In-vehicle technology ranks increasingly higher for consumers as they consider must-have and desired features in their car shopping," said Michelle Krebs, Autotrader senior analyst. "That puts automakers under intense pressure to anticipate and offer the technologies consumers desire, or they risk losing them to a brand that delivers."

Apparently, must-have car features for shoppers these days are cruise control (59 percent), diagnostic alerts (52 percent) and USB charging ports (49 percent), while 67 percent of consumers surveyed wish their current vehicle had Wi-Fi.

Interestingly, consumers view these tech features as a “luxury,” and define vehicles as such based on the technology they provide.

Autotrader analysts said 53 percent of those surveyed said they defined a vehicle as luxury or non-luxury by the technology and infotainment features available.

And consumers aren’t afraid to pay out a bit more for this coveted technology. According to the survey, 44 percent of shoppers said they would pay up to $1,499 for an in-vehicle concierge service such as Apple CarPlay or Android Auto.

In today’s tech market, automakers are also having to decide the best avenues to deliver these technologies; through the vehicle or via smartphones.

Fifty-seven percent of survey respondents said they wanted automakers to focus on better integrating smartphones into all vehicles. Autotrader pointed out this number was up from 48 percent in 2014.  And 39 percent of respondents said they preferred to use the navigation and map tools on their smartphones, rather than a navigation system built into their vehicles.

And these tech-savvy consumers aren’t too worried if the tools are easy to use or not. Take this into account: Seventy percent of respondents said they would still consider a vehicle they liked even if the technology was perceived to be too difficult to use. Back in 2014, 48 percent said they wouldn’t buy a vehicle that has features that were too hard to utilize.

"Consumers increasingly desire cool technologies as they are exposed to them, educated on their use, and as automakers improve the ease of use of them," Krebs said. "Still, education is key to consumer acceptance of new technologies, which is a huge opportunity for automakers and their dealers."

Red or blue: Vehicle preferences in election swing states

There already have been multiple presidential candidate debates featuring Jeb Bush, Hillary Clinton and Donald Trump. If Americans’ vehicle choices are an indication of political preferences, then the majority of swing states will vote for a Republican candidate, according to a PureCars analysis of sales by color and body.

CPO Forum participant PureCars, a provider of dealership digital ad platforms, examined sales data for a 90-day period to better understand body and color shopper preferences by state. The analysis showed that all traditional swing states buy more red cars than blue, with New Hampshire as the only exception.

Although the data may not directly correlate to votes in 2016, PureCars explained that it demonstrates the granular level of insight dealers need to recognize local preferences and successfully move inventory.

“It’s surprising to see what American stereotypes didn’t hold against our analysis,” said Jeremy Anspach, chief executive officer and co-founder of PureCars and one of the experts set to be on hand for the CPO Forum at Used Car Week.

 “For instance, most would think California would be crazy for convertibles and Texas for trucks, but it isn’t the case,” Anspach continued. “While every dealer makes assumptions about their customers, our data proves those assumptions should not be used to market to them. Instead, dealers should leverage real data from their market to drive their online strategy.”

Additional findings from the study include the following listed by PureCars:

— Hatchbacks are most popular in more liberal states like Washington state (16 percent of sales), Rhode Island (11 percent) and California (10 percent).

—Vermont is the top state for trucks, which account for 69 percent of sales.

— New Hampshire sells the most convertibles, which account for 12 percent of statewide sales.

PureCars mentioned that 74 percent of all vehicles sold in the U.S. are neutral colors (black, white or grey), with grey/silver being the most popular at 29 percent.

These data points may only be fun facts to the general consumer, but they also show how substantially shopper tastes can vary by location. PureCars said dealers have an opportunity to improve the overall car shopping process by tailoring their ad messaging based on consumers’ preferences for a more relevant experience.

“Today’s car shoppers begin their path to purchase with extensive online research and consideration periods before they even set foot on the lot,” Anspach said.

“A deeper understanding of their preferences and tastes is critical for dealers trying to win an increasingly competitive sale,” he continued. “With a programmatic approach, dealerships don’t waste their valuable and often small marketing budgets targeting customers who are not ready to make a purchase.”

To conduct its analysis, PureCars used its proprietary platform to pull historical data on car sales from June 1 to Sept. 1. Using predefined vehicle color categories, PureCars then tallied the number and relative percentage of each color sold in each state.

Complete data for the PureCars vehicle body and color by state analysis can be found at www.purecars.com/election.

Next month, Anspach might revisit the survey findings when he makes his presentation titled “Is Your VDP Hurting Your SEM?” His session will provide dealers with the latest digital innovations to improve search performance and increase VDP views.

The CPO Forum begins on Nov. 16 to kick off Used Car Week at the Phoenician in Scottsdale, Ariz. The complete agenda can be found here.

Are you a dealer or manager who’s interested in attending the CPO Forum? Contact Used Car Week chairman Bill Zadeits directly at bzadeits@autoremarketing.com as he has a few free VIP passes provided by Used Car Week sponsors for dealers and managers.

“If interested, please let me know. These VIP passes are limited and will be awarded on a first-come basis,” Zadeits said.

Used cars to market to young drivers & their parents

The Insurance Institute for Highway Safety has updated its recommendations for used vehicles for teens — and this insight may come in handy for dealers serving newly licensed young people and their often concerned parents.

Interestingly, IIHS said the list of recommended vehicles has grown by more than 50 percent, perhaps a result of the ever-improving quality of vehicles on the road.

The list includes models ranging from the Dodge Grand Caravan (2012 and newer) to the Honda Accord sedan (2012 and newer), covering large cars, midsize cars, small SUVs, midsize SUVs, large SUVs, minvans and pickups.

"Time is on the consumer's side," says Anne McCartt, the institute's senior vice president for research. "It's easier than ever to find a used vehicle with must-have safety features and decent crash test performance without spending a fortune."

IIHS compiled the list of recommended used vehicles in light of finding that the majority of parents who bought a vehicle for their teen driver brought a used car.

The survey also found that the mean purchase price for a teen's vehicle was $9,800, while the median was just $5,300, but the Institute noted it recommends parents pay a little more for their teen’s first car.

"The prices for most of the vehicles we recommend for young, novice drivers are still higher than what a lot of people are used to spending," McCartt says. "We would encourage parents to consider paying a little more for safety if they can."

For dealers working to put parents’ mind at ease while marketing safe vehicles for teens might want to keep these three recommendations from the IIHS in mind:

• High horsepower should be avoided.
• Bigger, heavier vehicles are safer.
• Electronic stability control is a must.

And if rated by the National Highway Traffic Safety Administration, vehicles on either list must earn four or five stars overall, or five or five stars in the front and side tests under the old rating scheme, IIHS reported.

Something to keep in mind for dealers is a few pickups made the recommendation list this year, after being excluded last year for exceeding the IIHS $20,000 price limit.

"We found in our survey last year that 14 percent of teenagers are driving pickups, so we're happy to be able to recommend a few models," McCartt says. The country's most popular pickup, the Ford F-150 crew cab, will set families back $16,800 for a 2011 model. A 2007 Toyota Tundra crew cab, a best choice like the F-150, costs $12,200, while the 2006 Honda Ridgeline, a good choice, can be had for $7,700.

For the full list of IIHS used-vehicle recommendations for teens, see here.

Costco: GM deal may reap 20% sales growth

The Costco Auto Program predicts its holiday promotions will be even more successful this year, after recording the highest sales the program has seen during its winter 2014 special offer.

This time around, Costco is partnering once again with General Motors for the seasonal promotion, and it projects 20-percent growth in vehicle sales compared to last year.

The Holiday Sales Event offers additional savings and benefits to Costco members on popular models from Chevrolet, Buick, GMC and Cadillac.

Among the models being offered is the Chevrolet Silverado, which the company says is a model that has consistently come out in front during these winter events since Costco and GM first partnered up in 2011.

The promotion began Friday and will run through Jan. 4, 2016. Through the event, Costco members who register for the offer at CostcoAuto.com will be privy to GM Supplier Pricing and additional benefits on a variety of 2015 and 2016 trucks, SUVs, luxury and fuel-efficient vehicles.

The GM Supplier discount offers pricing normally reserved for GM supplier employees that is less than the MSRP. Furthermore, all qualifying manufacturer rebates and incentives will be applied to the transaction.

Costco also pointed out its Executive Members will receive a $700 Costco Cash Card, and Gold Star and Business Members will receive a $300 Costco Cash Card upon completion of eligibility requirements. Gold Star and Business Members may upgrade to an Executive Membership in order to receive the additional $400, the company shared.

The lineup will include popular models, such as the aforementioned Chevrolet Silverado, Cruze and Tahoe; Buick Enclave, Encore and LaCrosse; GMC Acadia, Sierra and Yukon; and Cadillac ATS, CTS and SRX. The complete list of eligible vehicles can be found here.

Taking a look back at last year’s GM Limited-Time Offer, Costco sold 43,400 vehicles with a 69-percent closing rate on the eligible vehicles. Costco pointed out this is more than twice the amount sold during the winter 2013 offer.

Trucks came out in front for sales during the 2014 offer, making up 39 percent of total sales. The Chevrolet Silverado and GMC Sierra were the most popular, with a combined 17,000 vehicles sold.

The crossovers were popular, as well, and the segment’s seven models represented a larger share of the promotional vehicles available; they represented 35 percent of total sales.

“Increasing consumer confidence coupled with falling gas prices last year helped crossovers, trucks and SUVs trend higher in 2014; so it’s no surprise that our special offer reflected the same results,” said John Conlon, Costco Services director. “We’re pleased to provide our members yet another opportunity in 2015 to purchase vehicles that meet their needs while providing great value and a quality, time-saving purchasing experience at the same time.”

And this year, the program is taking the promotion onto social media, as well. Costco is launching a social media quiz, titled, “Are You Driving the Right Car?” The quiz — similar to the personality-driven quizzes on Facebook — includes 10 questions about the driver’s personality to determine a vehicle recommendation from one of the four brands offered during the Holiday Sales Event, the company explained. The quiz will be available on most social media platforms during the promotion and posted on Facebook.com/CostcoAuto.

Kia Sedona wins Cars.com, PBS ‘Minivan Challenge’

After Edmunds.com released an analysis last week that showed minivans increasing popularity among millennials, Cars.com teamed up with PBS’s “MotorWeek” to take a look at the hottest models in this segment.

In what the site coined as the “Ultimate Minivan Challenge,” editors took a look at five of the most popular current models — with the help of families in the market — and the 2015 Kia Sedona topped the list.

"The all-new Kia Sedona is a champion of quality and refinement," said Patrick Olsen, Cars.com editor in chief. "A great ride combined with a quiet cabin and numerous innovative features made the Sedona an obvious selection as the ultimate minivan."

The Sedona was followed by the 2015 Toyota Sienna, Honda Odyssey, Dodge Grand Caravan and Chrysler Town & Country, respectively.

"Minivans are among the most utilitarian vehicles sold today," said Olsen. "It's not uncommon for minivan shoppers to buy them fully loaded, so we tested the 'ultimate' minivans with a price cap of $50,000, allowing us to assess the current offerings in technology, features and drivetrains."

The five top models went through testing that included:

• 135-mile course on varying road types to test each minivan for real-world MPG.
• Round-robin testing, where multiple experts drove each minivan back-to-back on the same course to test ride, handling, comfort, acceleration and more.
• Testing by a family in the market for a new minivan to evaluate features, cargo space, ride and more.

And it’s becoming more and more important for franchised and independent dealers to keep an eye on the growing passenger van segment as one of the biggest shopping demographics — millennials — are showing interest.

Edmunds.com recently dissected Polk’s used-vehicle registration data from the first half of the year, and guess what its analysis uncovered?  

The used-vehicle segment where millennials take their largest slice of the pie is, in fact, the passenger van category.

The report, which looked at used vehicles up to 10 years in age, found that roughly 20 percent of used passenger van purchases were from millennials.

Millennial van — surprise choice for Gen Y

As a millennial (albeit an older one), I’ve always assumed most of my peers were averse toward driving minivans.

Turns out, that stigma might not be as strong as I thought, at least not on the pre-owned side.

Edmunds.com recently dissected Polk’s used-vehicle registration data from the first half of the year, and guess what its analysis uncovered?  

The used-vehicle segment where millennials take their largest slice of the pie is, in fact, the passenger van category.

This, of course, would include the minivan.

The report, which looked at used vehicles up to 10 years in age, found that roughly 20 percent of used passenger van purchases were from millennials.

 No other segment has millennials taking a greater share. For instance, 17.3 percent of used sedan purchases were made by millennials, and Gen Y’s share of pre-owned coupe purchases is only 15.8 percent.

I asked Edmunds analyst Jeremy Acevedo about these findings, and like me, he was a bit surprised.

The van isn’t necessarily the segment toward which you may assume young people would flock.

But, yes, many of the millennials are at an age where they’re starting families, and when it comes to buying cars, this is a “pragmatic, need-driven” group, Acevedo said.

As other findings from Edmunds’ analysis of used-car registrations would suggest, this is a group that is not afraid to make bold choices and buck traditional style, he said.

It matters less what the vehicle says about them, Acevedo explained, and more about the practicality of the vehicle itself.  

And not only does the passenger van have utilitarian value, it also makes economic sense for many young buyers. As Acevedo points out, their prices tend to depreciate heavily. So, buying a used one often is a good deal for a millennial.

Granted, when looking at all of Generation Y’s used registrations, the proportion made up by passenger vans (6 percent) is much lower than the share commanded by sedans, SUVs  or pickups, Acevedo said.

However, he points out that passenger vans still beat hatchbacks (4.8 percent) and coupes (3.9 percent), two segments that one may think as being more millennial-esque.

But this generation is already going against the grain, oftentimes.

By the way, if you're a dealer and looking to see which minivans may generate some traction, Edmunds found that the most millennial-heavy minivans in the first half of the year were the Volkswagen Routan (where 24.6 percent of pre-owned buyers were from Gen Y), the Nissan Quest (23.9 percent) and the Honda Odyssey (23.6 percent). 

10 used models leaning most heavily on Gen Y

Millennials accounted for just under 17 percent of the used-car market in the first half of the year, according to Edmunds.com analysis of Polk registration data.

But there are some pre-owned models in which millennials represent a larger slice of the pie. And several of those, interestingly enough, are actually discontinued models.

Edmunds shared these findings in an analysis Wednesday after combing through Polk’s used-car registration data from January through June.

What Edmunds found is that the Dodge Magnum, which is no longer in production, was the used model with the highest rate of millennial buyers, with 27.6 percent of its used sales going to Gen Y.

Not far behind was another discontinued vehicle from the Fiat Chrysler Automobiles: the Chrysler Pacifica, in second place at 27.3 percent.

And when looking at the full top 10 list of pre-owned models based on percentage of sales to millennials, six are discontinued vehicles, Edmunds said.

“Millennials are more practical used-car shoppers than we might otherwise credit them,” Edmunds.com analyst Jeremy Acevedo said.  “They may not go into the shopping process targeting these lesser-known vehicles, but when they see how their price tags stack up against other, better-known vehicles, they suddenly become a lot more attractive.

“When it comes to used cars, value and utility appear to trump just about anything else for many millennial buyers.”

The complete Top 10, again based on the share of their pre-owned sales to millennials is as follows. The list is sourced from an Edmunds analysis of Polk registration data covering January to June of this year. Discontinued models are in bold.

1. Dodge Magnum 27.6%

2. Chrysler Pacifica 27.3%

3. Subaru WRX 26.4%

4. Chevrolet Trailblazer 25.9%

5. Volkswagen R32 25.7%

6. Pontiac Aztek 25.5%

7. Nissan GT-R 25.4%

8. Saturn Outlook 25.3%

9. Dodge Durango 24.8%

10. Lexus IS-F 24.7%

Edmunds evaluation of vehicles includes modesl 10 years and younger. 

Family-friendly rigs for back-to-school customers

It’s that time of year again: the next generation is headed back to school and their variety of before- and after-school activities.

Parents, family and friends looking at upgrading their vehicles will have this in mind this time of year, so Steve Halloran, the chief editor at CarGurus, has announced his company’s recommendations for them to help ease their guesswork. Dealers can gain a few tips, as well.

“For families with school-age children, finding a vehicle that balances safety and reliability with space, comfort and convenience is important,” Halloran said. “To eliminate the guesswork for shoppers, we’ve identified the vehicles that meet these specific criteria and also offer bonus features that will make time spent shuttling the kids a little more pleasant.”

According to a recent online poll by CarGurus, 38 percent of car shoppers with school-aged kids said they spend between 30 minutes and one hour each day with kids in their car. A third said that time was stretched over an hour.

When a customer comes onto the lot, it may be worthwhile to ask if kid-hauling is part of their regular activities. Here’s a list of vehicles that may be appealing to them, according to CarGurus.

Midsize SUVS                             

• Mitsubishi Outlander (2016 MSRP starts at $22,995)
• Toyota Highlander (2015 MSRP starts at $29,765)
• Ford Explorer (2016 MSRP starts at $30,700)
• Chevrolet Traverse (2016 MSRP starts at $31,205)
• Infiniti QX60 (2015 MSRP starts at $42,400)
• Acura MDX (2016 MSRP starts at $42,865)

Minivans

• Kia Sedona (2016 MSRP starts at $26,400)
• Toyota Sienna (2015 MSRP starts at $28,700)
• Honda Odyssey (2015 MSRP starts at $28,975)

Large SUV

• Chevrolet Suburban (2016 MSRP starts at $49,700)

According to CarGurus, this list was compiled based on currently available models with a focus on safety records, cargo storage space, seating capacity and availability of technology features.

For more information about CarGurus, visit its site here.