Auto Shoppers Increase Internet Use

Automotive consumer Internet usage and online vehicle shopping increased significantly from the 1998 to the 1999 model years, according to research by The Polk Company.

According to the research, general Internet usage by automotive shoppers increased nearly 12 percent, from 51.6 percent to 57.7 percent, while using the Internet to shop for new vehicles increased by nearly 27 percent, from 26.9 percent to 34.1 percent, compared to 1998 model year figures.

Polk’s study, “Automotive Internet Activity Analysis,” is based on a mail survey of more than 27,500 new vehicle owners who purchased a new vehicle between October 1, 1998 and September 30, 1999.

The findings survey also found that of the Designated Market Areas (DMAs) registering the largest number of new vehicle buyers during the 1999 model year, Washington, DC ranks first in general Internet usage and vehicle shopping. Nearly three-quarters of new vehicle buyers in Washington, DC indicated they use the Internet on an ongoing basis, and more than half specifically used the Internet to shop for new vehicle purchases. Los Angeles ranked second among the DMAs among new vehicle buyers using the Internet to shop for their new vehicle, while New York finished eighth at 36 percent. New Yorkers ranked above the national average in general Internet usage, vehicle shopping, and buying.

Internet Usage by Selected Market Areas
General Internet
Usage by New
Vehicle Buyers
Internet Usage
for Vehicle
Shopping
Internet Usage
for Vehicle
Buying #
Washington DC 74.0%* 52.5%* 5.7%
Los Angeles 69.6% 44.5% 6.2%*
New York 64.7% 36.0% 3.9%
US Average 57.7% 34.1% 3.0%
* Leader
# Purchased through Internet buying service
Source: The Polk Company

Although Washington, DC had the highest percentage of general Internet users and vehicle shoppers, Los Angeles led in terms of Internet buyers. Nationally, almost three percent of new vehicle buyers purchased their new vehicle through an Internet vehicle-buying service, such as AutoByTel. More than six percent of new vehicle buyers in Los Angeles, however, purchased their new vehicle on-line — double the national average.

“The ultimate potential of Internet Buying Services continues to be a mystery in the automotive industry,” said Karen Piurkowski, Polk’s Director of Loyalty. “While many manufacturers and dealers are worried about the impact these types of services will have, only a small percentage of US new vehicle buyers are actually participating in these types of programs. Our research shows that, although there has been growth in the percentage of consumers using new vehicle buying Internet services over the past few years, the figure is still much lower than the number of consumers buying through traditional purchasing channels.”

In addition to examining Internet trends, the Polk study also compared the importance of several other information sources for automotive Internet shoppers. The test drive, experience with a previous vehicle, and consumer magazines were found to be the three most important information sources to automotive Internet shoppers nationwide in their new vehicle searches. According to the research, this also holds true within Washington, DC and New York. Surprisingly, awards for a vehicle’s performance held the third position in Los Angeles, relegating consumer magazines to fourth place and demonstrating that awards still carry value in that region.

Internet Use/Vehicle Shopping Rates by Manufacturer
Rank Manufacturer General
Internet Users
Internet
Vehicle Shoppers
1. Saab 83.8% 57.0%
2. BMW 79.6% 57.9%
3. Isuzu 76.9% 50.6%
4. Volvo 76.8% 57.9%
5. Volkswagen/Audi 75.5% 54.5%
US Average 57.7% 34.1%
Source: Polk Automotive Internet Usage Study – 1999 model year

Polk’s data also indicate that success rates in terms of online customer interaction vary by automotive manufacturer. Overall, European manufacturers were found to have the highest proportion of both general Internet users and vehicle shoppers. Four of the top five manufacturers were European, with Saab topping the list in terms of Internet users. Volvo and BMW (both with North American headquarters located in the New York area) had the highest proportion of Internet vehicle shoppers.

“Our findings indicate that the Internet will continue to grow in importance for new vehicle buyers during their shopping process, particularly for shoppers of upscale brands,” said Piurkowski. “The challenge to the manufacturer will be to provide a Web site that is easily accessible and provides the needed information to shoppers who have access to so many different sources of information on the Internet. Providing additional services to Internet users after the initial new vehicle sale will help the manufacturers and dealers to secure future business by building stronger bonds with their customers.”

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