JD Power Analyst Note for March 2013

1. CANADA
CANADA February 11, 2013
March 14, 2011
The Advocacy Imperative The Importance of Advocacy Among Millennials
jd_ney@jdpa.com
(416) 507-3254
At corporate retreats and conferences around
Canada, Millennials —the generation currently
between 18 and 34 years old— are often both praised
and maligned. They are applauded for their inherent 35%
tech-savviness and increasing economic gravitas, No
while also being described as fickle and entitled.
29% 32%
Regardless of labels or descriptors, the Canadian
automotive industry must learn how to more
22%
effectively cater to this demographic, the leading
edges of which are entering their prime vehicle buying
years. According to the 2012 Consumer Retail
Experience Study, a critical step in attracting more
business from these young buyers is increasing
advocacy among current customers. Source: J.D. Power and Associates 2012 Consumer Retail Experience Study
Behind the Numbers
• Among recent vehicle buyers, who have also • These advocacy imperatives come into sharp
purchased at least one new vehicle in the past, focus when considering that Millennials are the
previous experience with the dealer from whom least likely demographic to definitively declare
they purchased plays an important role in terms of forward intended service loyalty (48% of new-
influencing the new purchase decision. However, vehicle purchasing Millennials vs. 64% of older
when focusing on age groups, the data tells a very purchasers). Given their penchant for exhaustively
different story. Past experience with the selling researching automotive purchases online, they’re
dealer is a much stronger influencer among older also less likely to be “delighted” with the dealership
buyers (46%) than among Millennials (29%). sales experience.
• This relationship is reversed when the various age • When it comes to measuring sales and service
groups are asked about the importance of satisfaction, dealers must genuinely “delight” their
recommendations from friends and family in their customers. Customers who rate their dealership
decision to purchase from a particular dealer. This sales experience as 10 (on a10 point scale) share
component was sited as less important by older an average of nine positive recommendations,
buyers (19%), while it was the most influential compared with three positive recommendations
component cited by Millennials, with 32% agreeing when sales satisfaction is rated 7.
that recommendations had impacted their decision. • Similarly on the service side, 49% of customers
• Far from being just advice aggregators, Millennials who rated their experience as a 10 say they
also share the most comments about their “definitely will” recommend their service facility,
purchase experience, be they positive or negative. compared with 2% of those who rated their service
On average, they share seven positive comments experience as a 7.
with others, versus two negative ones.
J.D. Power and Associates does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for any
errors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on information published in this publication. Reproduction
of any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of J.D. Power and Associates.
Any material quoted from this publication must be attributed to J.D. Power and Associates.
1
© 2013 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.

2. Brian Murphy ▪ 416-507-3253 ▪ brian_murphy1@jdpa.com February 11, 2013
March 14, 2011
Vehicle Purchase Type
Percent of Total Transactions (Last 12 Months) Days to Turn
New Vehicles Used Vehicles
3
18
47
21 61 50
Cash Lease Loan
Monthly Payments Vehicle Price versus Customer Facing Vehicle Price*
Average per Customer *Data from JDPA PIN Incentive Spending Report (ISR)
Vehicle Price Transaction Price
$32,000
$31,000
$30,000
$29,000
$28,000
$27,000
Feb-12
May-12
Jun-12
Jul-12
Nov-12
Jan-13
Feb-13
Dec-12
Mar-12
Oct-12
Sep-12
Aug-12
Apr-12
Percent New-Vehicle Loan Term Percent Negative Equity + Trade-In
72 Months and Greater Percentage of negative equity vehicles at trade-in
J.D. Power and Associates does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for any
errors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on information published in this publication. Reproduction
of any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of J.D. Power and Associates.
Any material quoted from this publication must be attributed to J.D. Power and Associates.
2
© 2013 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.