J.D. Ney, Director, Canadian Automotive Practice Lead at J.D. Power, recently shared the results from the first wave of the company’s 2020 Canada COVID-19 Vehicle Owner Pulse on LinkedIn. The study offers some interesting insights for dealers.
More than 90% of vehicle owners are feeling some level of stress due to the current novel coronavirus pandemic, which has now resulted in a shift away from new vehicle purchases within the coming 12 months. That shift has not led to a hard “no”, but rather a “not sure” feeling from Canadian consumers.
“Vehicle owners are not immune to the stress of the COVID-19 pandemic, with 1 in 5 (22%) very or extremely stressed and another 40% moderately stressed,” said J.D. Power in its report.
Prior to COVID-19, 18% of consumers planned to purchase or lease a new vehicle within the next 12 months, while 10% were unsure and 72% said no. If we take that 18% and place them in the current situation of the pandemic, 63% plan to lease or purchase a new vehicle, 24% are not sure, and 13% said no, based on the survey’s findings.
As for buying a vehicle online, 39% of vehicle owners said they are likely to complete a full new-vehicle purchase digitally. Specifically, when asked how likely they would be to use the following options online when shopping for a vehicle:
- 33% probably would discuss features with a salesperson via video chat, and 10% definitely would;
- 35% would probably negotiate a price for a new vehicle online, and 18% definitely would;
- 37% would probably have the vehicle delivered to their home (as opposed to the dealership), and 18% definitely would;
- 42% would probably, post-delivery, learn about the vehicle functionality through online videos/tutorials, and 23% definitely would; and
- 29% would probably complete all aspects of buying a new vehicle online, and 10% definitely would.
“Online shopping capabilities which have been a key component of a new vehicle purchase for many years, become a must in today’s environment,” said J.D. Power.
Dealers looking to make consumers feel comfortable enough to buy a vehicle online, now or in the near-future, will need to focus on financial-based incentives — as these are the most comforting of the three categories (the other categories are alternative shopping methods and cleanliness/sanitization actions).
“Creating a comfortable environment for a new vehicle sale in the current crisis focuses more on the financial incentives that can be offered rather than physical health and safety measures, as the operation status of retail locations across the country is varied,” said J.D. Power.
The study indicates that there is a significant interest (58 per cent) in offering 0% financing, offering no-charge maintenance on new purchases (48%), and guaranteed payments in case of job loss (21%). Offering payment deferrals/waivers (18%), alternative payment options or plans (15%), and (in the other categories) bringing a vehicle to the consumer’s home to be test driven (19%) also garnered some interest.
On alternative servicing methods and sanitization actions, the top actions a dealership can take to make consumers feel comfortable when servicing their vehicle, now or in the near-future, includes home pick-up/drop-off, sanitizing the vehicles, and communicating with customers.
“Vehicle owners are mostly confident in the ability of their dealerships or service providers to meet their needs during the uncertainty we are facing,” said J.D. Power. “Continue to communicate effectively and provide updates to customers as procedures change.”
As for servicing needs, 43% of vehicle owners plan to defer the service work until after the COVID-19 crisis has passed. However, there are also 28 per cent of consumers that did not plan to service their vehicle but will do so if the facility is open, and 29 per cent of respondents that planned to service their vehicle indicated they would do so if the dealership is open as well. Many vehicle owners still have their winter tires installed too, which will create an opportunity for dealers.
The first wave of the study took place between April 3-8 as an online, email-distributed survey, with a response rate of 15 per cent (or 1,098 collected responses) from across Canada. The next wave is set to begin fielding information on April 17.
