Recession power session how the tough get going

Recession Power Session:
How ‘The Tough Are Getting
Going’

Lenny McGinley
VP, Dealer Sales
Autobytel Inc.

Survey.com Survey Methodology

• Survey.com was commissioned by Autobytel to conduct
a survey examining how auto dealerships are
responding to the current economy and high gas prices:
• Examine impact the current economy and high gas
prices has had on overall sales
• Explore how dealerships feel about the future of
smaller, more fuel-efficient vehicles

• 200 nationally representative dealer responses

• Data was collected from August 25, 2008 through
September 8, 2008.

2

Overall New Vehicle Sales vs. a Year Ago

Sales Down 55%

Good News:
Stayed about the
same
18% 45% of dealers reported
new vehicle sales were flat
or up versus a year ago

Sales Up 27%

0% 10% 20% 30% 40% 50% 60%

Source: Survey.com, September 2008

3


Import vs. Domestic Story More GM Dealers Report Sales
Increase than Toyota Dealers…

% of dealers report sales increase/decline
79% 80%
% of dealers report sales decline

78% 72%
78% 65%
70%
77%
60%
76%
75% 50%
74%
73%
40%
73%
30%
72%
20% 15%
71% 12%
70% 10%
Import Domestic 0%
Toyota GM

Decline Increase


4


Who’s Up? Who’s Down?

Honda 50% Kia 37%

Hyundai 50% Hummer 33%

Nissan 40% Chrysler 26%


5

Overall Used Vehicle Sales vs a Year Ago

Good news: 61% of dealers % of dealers report sales
reported used vehicle sales were increase
flat or up versus a year ago
45% 41%
40%
Sales Down 40%
35% 32%
30%

Stayed about 25%
25%
the same 20%
15%
10%
Sales Up 36% 5%
0%

0% 10% 20% 30% 40% 50%
Import Domestic


6

Fuel Sipper Sales Up This Year
Has your dealership seen an increase in sales of smaller, fuel-efficient
vehicles over the past year?

Yes,
somewhat/significant 88%
increase

Stayed the same 11% 9 out of 10 dealers saw an
increase in smaller, fuel-
efficient vehicle sales…
50% have seen an over
No, sales have gone
20% increase
down
2%

0% 20% 40% 60% 80% 100%


7

Whose Fuel Sipper Sales Are Up This Year
Whose fuel sipper sales are up this year?

Import 59%

Domestic 49%

Hyundai 88%

Honda 69%

Nissan 67%

0% 20% 40% 60% 80% 100%


8

Small Cars Driving Sales Health

73% of dealers reporting 10% or more Top brands spiking small
increase in sales report significant increase vehicle sales reporting 20%
in small vehicle sales or more sales increase

0 0%

1-9% 11% • Nissan 79%
10-19% 35%

20-29% 26% • Honda 62%

30-39% 13%

40-49% 5%
• Hyundai 50%

50-74% 9%

75-99% 0%

100% or m ore 1%

0% 10% 20% 30% 40%


9

Who/What is driving new vehicle sales decline?
Which factor has had the single largest impact on declining new vehicle
sales across the industry?

High Gas Prices 38%

Housing
Market/Credit 37%
Crunch

Inventory Mix 10% THE MEDIA!
“The media scaring the
public with all the negative
press”
Other 16%

0% 5% 10% 15% 20% 25% 30% 35% 40%


10

Who is Blaming Who?
• GMC dealers most likely to blame Gas Prices
• Nissan dealers most likely to blame Credit Crunch
70% • Toyota dealers most likely to blame Inventory Mix
60%
60%
53%

50%
43%
42%

40% 38% 37%
35%
32% 31% 31%
30% 27%
26%

20% 20%
20%
16%
13%
9%
10% 8% 7%

0% 0%
0%
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High Gas Prices Housing Market/Credit Crunch Inventory Mix

11

F-E Vehicle Shift Permanent or Just Another Phase?

Do you think the recent industry-wide shift to smaller, fuel
efficient vehicles is permanent?

YES! 46%
Gas prices will stay high and market will continue to be about fuel
efficiency.

NO! 49%
It’s just part of the current cycle; gas prices will decline and
trucks/SUVs etc. will make a comeback.

• 65% Honda dealers see it as permanent vs. 22% of Chevy

• 67% Hummer dealers see it as part of cycle


12

Fuel Efficiency Driving Consumer Behavior?

Do you agree with this statement:

“Fuel Efficiency is the #1 concern for car shoppers today – and the
top factor in their vehicle selection”?

No!
Yes! 46%
55%

• Import dealers more likely to say yes: 58%
• Domestics more likely to say no: 42%


13

When Will It Be Over? Or Will It?
When do you think the new vehicle market will significantly
recover or really start to turn around?

Later in 2008 9%

First half 2009 29%

Second half 2009 34%

2010 13%

2011 3% Over half of dealers don’t
see turnaround until 2nd Q
Not in the forseeable future 2% 2009 and Beyond
Not sure 10%

0% 5% 10% 15% 20% 25% 30% 35% 40%


14

When Will It Be Over? Or Will It?
Most Optimistic Brand? Most Pessimistic Brand?
• Nissan – 27% see turnaround in 2008 • GMC – 40% 2010 - 2011
50%
47%
45%

40% 38% 38% 38% 38%
36%
35%
31% 31% 30% 32%
30%30% 28%
30% 28%
27%
25%
21%
21%
20%
16% 15% 15% 15%
15% 13% 13% 13% 13%13%
10%10% 10% 10% 11%
10% 8% 8%8% 8%
7%
7% 6% 7%
5%
5%
5%
4% 4% 5%
0% 0%
0% 0% 0% 0% 0% 0%
0% 0% 0%
0%
0%
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Later in 2008 First half 2009 Second half 2009 2010 2011 C
Not in foreseeable future I am not sure
15

When the Going Gets Tough, the Tough Get Going
What are dealers doing to weather the storm?

Most Important thing to help during downturn

Better follow-up processes and
processes to convert leads into sales 50%

Targeted, measurable Internet marketing
21% The #1 focus for
(leads, used, etc.)
a dealership is
follow-up processes
Used vehicle sales 17% and lead conversion
processes

Service and aftermarket sales 13%

0% 10% 20% 30% 40% 50% 60%


16


Greater Focus on Follow-up Processes and Lead Conversion

100%
90%
80%
67%
70% 62% 63%
% of dealers

60% 54%
50% 47%
50%
46%

40%
30%
20%
10%
0%

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Greater Focus on Targeted, Measurable Internet Marketing
50%
45%
40%
35% 32%
27%
% of dealers

30%
25%
23%

20%
15%
15%
13% 13%
10% 6%
5%
0%

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Greater Focus on Used Vehicle Sales
50%
45%
40%
35% 31%
% of dealers

30%
24%
25%
20%
15% 12% 11% 13%
10% 8%
5%
0%
0%

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Greater Focus on Service and Aftermarket Sales
30%

25%

20% 17%
% of dealers

15%
15% 13% 12% 13%
11%
10%
7%

5%

0%

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1. Increasing or Standing Firm on Internet Spend 91%

2. Focus on Better Process to Convert Leads Into Sales 77%

3. Making Internet Bigger Part of Budget 69%

4. More Focus on Used 58.5%


21


91% Increasing or Standing Firm on Internet Spend
100% 100% 92% 100%
91%
% of dealers increasing or standing firm on

88%
90%
79%
80% 75%
70%
60%
Internet spend

50%
40%
30%
20%
10%
0%

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Honda, Hyundai and Nissan

hr
C
top 3 brands increasing spend…
top 3 in sales increase

22


77% Focus on Better Process to Convert Leads Into Sales
% of dealers focus on better process to convert leads

100%
88%
90% 81% 80%
80% 73% 76% 73% 75%
70%
60%
50%
40%
30%
20%
10%
0%

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69% Making Internet Bigger Part of Budget

100% 100%
% of dealers significantly/somewhat

90%
80% 75%
increasing Internet spend

69% 67% 69%
70%
58%
60%
50%
50%
40%
30%
20%
10%
0%

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58.5% More Focus on Used
100%
90% 80%
% of dealers put more focus on Used

80% 74%
69%
70% 66%
63%
60% 54%
50%
50%
40%
30%
20%
10%
0%

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Summary

• Over half of new car dealers seeing sales decline
• Domestics more impacted than Import dealers
• F-E Vehicles driving sales increases
• Dealers split on cause between high gas prices and
housing/credit crunch

• 63% believe industry will recover sometime in 2009
• 91% standing firm or increasing Internet spend
• Majority of dealers report that more intense and
effective lead follow up #1 key to survival


26

Recession power session how the tough get going

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