Consumers are still in market for cars

Research from TLA and others continues to suggest that consumer demand is still present. 

Our consumer survey activity, conducted as part of our usual in-market buyer conversations since 23rd March, continues to suggest that around 47% of buyers have not changed their timeframe to purchase a new car – albeit against a slight fall since the end of March – while the majority of those who have extended timeframes have done so by up to three months.

The last week has been punctuated by positive consumer news from several outlets. According to AutoTrader, at least 82% of consumers are still looking to buy a vehicle in 2020, with 25% of these looking to buy as soon as they possibly can; only 2% were no longer looking to buy. HeyCar, on the other hand, reported a 35% increase in web traffic in the first two weeks of April, alongside a 40% increase in consumers expressing their interest in purchasing vehicles. Jim Holder, Editorial Director for WhatCar? and AutoTrader, suggested this week that traffic to both sites “lit up” in the wake of Government confirmation that dealers are able to deliver new vehicles.

Meanwhile, after the largest fall in UK consumer sentiment since 2008/2009 in March, PwC has suggested that sentiment has rebounded in April to a level similar to 2013, when the global economy was emerging from recession. While this level remains significantly lower than anything since that point, the month-on-month improvement does suggest there is some resilience in consumer demand.

What does this mean for brands?

While purchase activity remains very low, these signs suggest that there is pent-up consumer demand in the market that must be addressed when lockdown is lifted.

While we have little idea what retailer footfall will look like when restrictions are lifted, TLA research suggests that 50% of consumers would now be likely or very likely to purchase a vehicle without physically visiting a dealer. As long as brands and retailers can accommodate it, remote or online sales may support recovery even if footfall is low. The increase in live chat and instant messaging traffic reported since lockdown supports the fact that consumers are increasingly willing to engage with retailers and brands through digital channels.

What should brands do?

As per our previous communications, the time to act is now. Latent consumer demand needs to be serviced, and brands and retailers must nurture enquiries now to support post-lockdown sales. This point was also supported this week by HeyCar Chief Commercial Officer Karen Hilton, who suggested that “dealers who have warm leads can use this time to educate their customers on purchase options, finance and even the delivery options currently on offerGet to know the customer and their circumstances – that way you’ll know when they are in the position to buy.

With TLA research suggesting that consumers are more likely to switch brands, and the possibility that extended new car order timescales may push consumers into used and nearly-new purchases, educating, informing and nurturing consumers while they are in the critical research period will play a major role in supporting recovery.

How can TLA help your brand?

TLA has developed a number of new lead types to support brands in preparing for recovery, each addressing a consumer group at a specific point of the buying cycle.

  • PCP Renewal Request leads capture buyers who remain in market to buy as soon as possible, primarily due to their existing finance contract ending and requirement for a new vehicle in a very short timescale. We expect these consumers to have made a purchase decision on a specific vehicle, and therefore to convert in a short timeframe of 0-3 months.
  • Delayed Quotation leads capture consumers who are in market to purchase immediately after lockdown ends, which, according to research from AutoTrader, makes up around 25% of the car-buying population. These buyers will be seeking information on how to progress to eventually purchase, and we expect will covert in 2-4 months, depending on when lockdown is lifted.
  • Dealer Contact leads capture consumers who are seeking to contact a dealer for information, research and guidance on their vehicle shortlist. These consumers should be nurtured to purchase, and we expect them to convert in 0-6 months.

We have also introduced several other lead types, including car configuration, KMI and digital brochure, to support other consumer requests and requirements.

TLA is committed to supporting its partners through the current period in order to emerge into a strong recovery position. Please don’t hesitate to contact us for more information, or to explore how we can address your specific needs.

Antony Neill
Head of Data Insight