Marketing Exec Leads Internet Site Panel in Discussing Price Transparency

Price negotiation for most consumers is often described as one of the most arduous parts of the purchase process, according to Joel Ewanick, managing partner of Global Automotive Systems, Inc. The former GM chief marketing officer led a panel discussion about “Vehicle Price Transparency” with four third-party website executives at the October J.D. Power Automotive Marketing Roundtable (AMR) in Las Vegas, NV. Excerpts from the panel discussion are highlighted in this post.

Moderator: Joel Ewanick, managing partner, Global Auto Systems, Inc.

 Panel Members:

Seth Berkowitz, president and COO, Edmunds.com

Larry Dominique, executive vice president, TrueCar, Inc.

Jared Rowe, President, Kelley Blue Book

Alex Vetter, senior vice president, Cars.com

Third-Party Website Leaders Define Business Models

Joel: I see that companies like yours are trying to help the consumer through the process. Can you explain what you do, what your business model is, and then we’ll start to compare and contrast?

Seth (Edmunds): “At Edmunds, we’re working through a major transition. For years, we’ve been an information and pricing authority. We probably have the largest repository of automotive information on the Internet with somewhere in the neighborhood of 3.5 million pages of content. We’ve decided that being this comprehensive encyclopedia of automotive information isn’t enough. . . We’ve decided to make car buying easier. We are going to do this by fostering trust—which is at an all-time low— between consumers and dealers.” Continue reading ›

Transaction Prices Rise Long-Term, but Remain Stable in the Short-Term

Thomas King

Recently, Thomas King, senior director of our Power Information Network® (PIN), looked at current trends in retail transaction prices for the auto industry based on PIN real-time data and analysis. A few questions that he considered from media requests and his responses are highlighted:

Q: Are average transaction prices for the industry increasing?

TK: From a long-term perspective, yes, industry transaction prices have risen by a large amount. In 2008, the average transaction price for a new retail vehicle sale was $25,505 and by 2011 that had risen to $28,337. That’s a difference of $2,832, or slightly more than 11%.

Q: Why have transaction prices risen over the long term?

TK: Better alignment between supply and demand means that OEMs are selling a richer mix of vehicles with lower incentives. It should be noted, however, that the decline in incentive spending only partially explains the rise in transaction prices. In 2008, average incentive spending per unit was $3,018, but by 2011 it had fallen by $332 to an average $2,686. The balance of the increase in transaction prices is due to stronger new-vehicle pricing and a richer mix of vehicles being sold (vehicles with more features and equipment). Continue reading ›

Economic Factors Shape Consumer Attitudes on Green Vehicles

Christopher Malott

When asked to consider a hybrid electric (HEV), plug-in hybrid electric (PHEV), clean diesel engine or battery electric vehicle (BEV) for their next new-vehicle purchase, a large proportion of consumers express interest in at least one of these options.

While vehicle price remains a primary concern impeding consideration of these powertrains, the ability to save money on fuel costs through improved economy is the most often cited benefit of ownership, according to the  J.D. Power and Associates 2011 U.S. Green Automotive Study.SM

However, even though the financial benefits relating to fueling are recognized by these consumers, oftentimes the upfront price premium of an alternative powertrain option is too high to overcome. Price, in fact, may become a more prominent concern for consumers considering HEVs and clean diesel engines, since tax credits from the Energy Policy Act of 2005 were phased out at the end of 2010. Continue reading ›

Customer Treatment Overshadows Price in New-Vehicle Sales Satisfaction

More than half (52%) of new-vehicle buyers indicate that dealer treatment was a major reason to purchase their new car or light truck from a specific dealer, according to the J.D. Power and Associates 2010 U.S. Sales Satisfaction Index (SSI) Study,SM which analyzes the new-vehicle purchase experience. Interestingly, the study finds that only 38% . . . Continue Reading Customer Treatment Overshadows Price in New-Vehicle Sales Satisfaction