Markethaus Musings

We recently began publishing predictive statistics showing which new makes and models generate the most price quote requests. And although both Chevrolet and Ford actually outsell Toyota, consumers are most likely to search for a Toyota and submit a pricing inquiry. Ford's share of price quotes has dropped significantly since the summer. Those of you following sales closely, know that Ford Division was in danger of losing its sales lead to Chevrolet for the first time in over a decade...

Internet purchase inquiries are a predictor of future sales. Consumers typically submit a pricing request with a dealer 30-60 days prior to purchasing. Incentives, financing, trade-in allowance "salesmanship" and the "deal" all influence the final purchase, but the pricing request is a strong predictor of market share trends. Shown below are the data from Dec. 1-10...an incomplete month, but a harbinger of things to come...

Toyota / Share	12.00%
Chevrolet / Share	11.60%
Honda / Share	7.20%
Nissan / Share	7.10%
Dodge / Share	7.00%
Ford / Share	6.90%
Jeep / Share	3.40%
Chrysler / Share	3.30%
GMC / Share	3.30%
Kia / Share	3.00%
Lexus / Share	2.60%
Mitsubishi / Share	2.60%
Pontiac / Share	2.60%
Hyundai / Share	2.50%
BMW / Share	2.30%
Cadillac / Share	2.30%
Acura / Share	2.00%
Volkswagen / Share	1.90%
Mercedes / Share	1.70%
Mazda / Share	1.60%
Subaru / Share	1.30%
Audi / Share	1.20%
Infiniti / Share	1.20%
Saturn / Share	1.20%
Buick / Share	1.10%
Hummer / Share	1.10%
Scion / Share	1.10%
Lincoln / Share	1.00%
Mercury / Share	0.60%
MINI / Share	0.60%
Land Rover / Share	0.50%
Porsche / Share	0.50%
Suzuki / Share	0.50%
Jaguar / Share	0.40%
Volvo / Share	0.40%
Saab / Share	0.30%
Isuzu / Share	0.20%

What do the data tell us?

• Raw consumer demand on the internet is highest for Toyota products. Honda and Nissan are also heavy in price quote demand, relative to their actual sales
  
• Ford and Chevrolet sales (as well as their sister brands) appear to be inflated by fleet sales, fleet influenced sales (small business fleets that do not get counted as fleets) and agressive discounting. Ford especially, is suffering from very low demand.
  
• For Ford and Chevrolet to maintain their sales momentum, they must continue to discount retail sales, turn their consumers faster (accelerate purchasing through leasing and early turn-ins) and push fleet sales...or eventually lose their sales leadership to the Toyota brand
• Despite heavier advertising dollars by some domestics, the message isn't translating into lower funnel shopping (interest in purchasing). Without lower funnel shopping...you need incentives.
• Interesting demand fluctuations at the local level. Compare zipcodes in, let's say...Detroit (try 48084) vs. Seattle (98101) and you quickly realize...just like politics...it's all local. The demand differences are shocking. If the domestics want to fix their share problems...it must be done locally. Find your weaknesses...and fix them for a good opponent will surely leverage them against you. Find your strengths...and attack. If you're not sure, read David Halberstam's book on Bill Belichik. "Break down the film." What does Football have to do with car sales you say? Ahh...do not doubt, grasshopper...read. Ok, enough arcane analogies. A hint...domestic quality is close statistically, yet...seen any good ads lately?
  

Want to see more? Take a look at Marketpoint

Let us know what you think! (Note that Marketpoint only works with Internet Explorer...for now)