More would-be vehicle buyers are exiting the market, according to research published this week by Cox Automotive and Kelley Blue Book.
The research defined would-be vehicle shoppers as consumers who intended to purchase within a year. It included interviews with 266 consumers in April and another 173 in August. The August survey found that 48% of consumers were choosing to postpone a purchase, up from 37% in April.
Of those consumers who said they were stepping back from the market in August, 80% said they planned to be sidelined for between three and 12 months. In April, that figure was at 60 percent.
A shortage of microchips has constrained production of new vehicles, which in turn has led to increased demand and higher prices for used ones. Consulting firm AlixPartners reported today that the chip shortage will cost the global automotive industry $210 billion this year, a greater revenue loss than previously thought.
The shortage has major implications for the ad industry, as brands pull back spending on sales events and other "buy now" marketing. “If you don’t have cars to sell, you don’t need to advertise them,” one ad agency executive told Ad Age earlier this week.
In Cox's August survey, three-quarters of in-market shoppers said they would be willing to travel outside their local area to buy a vehicle. Most of those shoppers said they would be willing to drive 50 to 200 miles, but fewer than 20% said they'd go more than 200 miles. That question was not included in the April survey.
Also in the August research, 35% said they would shift from an imported brand to a domestic one, compared with 28% in the April survey; 32% said they'd switch brands in general, down slightly from 33%; and 31% said they would change which vehicle category they're shopping for, such as an SUV, crossover, minivan, compact car and so on. That compares with 19% in April.