December 22, 2000

Automotive Retailing Today asked The Gallup Organization to measure how satisfied consumers are with the new vehicle purchase/leasing experience -- and asked Wirthlin Worldwide to determine if there are different perceptions by minority purchasers -- both studies indicate that a strong majority of all consumers gives high marks to the process.

John Peterson, chairman of Automotive Retailing Today said, "New vehicle buyers from all walks of life are more informed than ever before. By the time they set foot on the showroom floor, they have a very good idea of what they want and don't want, how much they're prepared to pay, and how they expect to be treated. As a result, when they drive away in their new vehicle, they are satisfied customers," Peterson said.

Gallup conducted a survey of consumers, dealers and the news media about their car buying experiences. Separately, Wirthlin Worldwide conducted a similar survey solely focused on the car buying experiences of minorities.

"We finally have a much needed and encouraging snapshot of the diversity in today's automotive marketplace. By a remarkable 82 percent and 83 percent respectively, minorities and non-minorities told us they liked the experience of buying or leasing a new vehicle. Dealers will continue to work hard to keep their confidence." Peterson added.

When asked specifically about how they liked their dealership, 94 percent of non-minority consumers overall were satisfied, of which 75 percent were very or extremely satisfied according to the Gallup research. The Wirthlin research confirmed that 88 percent of minority consumers were satisfied (66 percent very or extremely satisfied) with their dealership.

The Wirthlin survey found that one in every five (19.6%) Americans has recently bought or purchased a new vehicle. More than eleven percent (11.2%) of the new car purchasers are minorities. Additionally, minorities purchase a new vehicle more frequently than non-minorities, an average of every 23.1 months versus 45.6 months respectively.

Both surveys found that Internet use in the vehicle buying experience has increased dramatically since 1998. Gallup found that 43 percent of non- minorities who recently purchased a vehicle conducted research online to help guide their decision, compared to 27 percent who did so for their last vehicle purchase. Still, 90 percent (63 percent very or extremely useful) said the visit to the dealership was a useful source of information in the purchase experience.

Among minorities polled by Wirthlin, 36 percent reported that the Internet influenced their latest decision, up from 24 percent for their last purchase. Asian Americans used the Internet the most (62%), followed by Hispanic Americans (39%) and African Americans (27%).

According to Gallup, information most sought on the Internet by all consumers included price (88%), options and color (86%), and comparisons among different makes and models (68%). Only eight percent used the Internet to agree on vehicle price, three percent to fill out the necessary paperwork, and two percent to arrange pick-up or delivery.

"The purchase of a car or truck is a classic example of 'clicks and bricks,' Peterson said. The Internet is playing an increasingly important role but it doesn't replace the need for the hands-on experience at the dealership."

In addition to the Internet, consumers of all ethnicities now use a variety of other information sources to influence their purchase decision, and there are only minor differences in preferences between minorities and non- minorities. "Minorities are a bit more likely to rate word of mouth, consumer guides, and government safety ratings higher on their list. Non-minorities tend to give slightly more emphasis to visiting a dealership," Peterson said.

When asked to rate the various information sources on reliability, the same pattern holds true. Minority consumers tend to rate all sources slightly higher than non-minorities, except 'visit to a dealership,' which non- minorities rate slightly higher.

Sheila Vaden-Williams, President of the National Association of Minority Automobile Dealers stated, "I am delighted to see that the automotive industry recognizes that understanding the purchasing habits, needs, and expectations of ethnic minorities is essential to drafting a blueprint for economic success in the new millennium."

Other key findings from both studies included:

* Women were somewhat more positive with the overall purchasing/leasing experience (3.43 mean for women vs. 3.30 for men). Overall satisfaction with their dealership was also higher for women (4.0 mean vs. 3.84 mean). * (Gallup)

* Members of the news media (54%) believe that consumers had negative experiences, in sharp contrast to what both minority and non-minority consumers reported. (Gallup)

* There is little disagreement among minorities and non-minorities that the purchase process at dealerships across the country is getting better (39% and 36% respectively). (Wirthlin, Gallup)

* 5.3 percent of all new vehicle buyers/leasers are African Americans; 9.9 percent of African Americans buy/lease new vehicles. (Wirthlin)

* 3.8 percent of all new vehicle buyers/leasers are Hispanic Americans; 9.5 percent of Hispanic Americans buy/lease new vehicles. (Wirthlin)

"Taken together, these surveys by two of the most respected national opinion research firms, give us a better understanding of our customers' buying habits, likes and dislikes. That helps us work to build even stronger customer relationships," Peterson said.

Data for the Gallup survey was collected June 28, 2000 to July 28, 2000 by random telephone interviews of 1,003 people who purchased or leased a new vehicle within the previous 18 months. R.L. Polk & Co. supplied the sample based on vehicle identification numbers (VIN's) registered within the past eighteen months. In addition, 100 reporters/media representatives and 403 dealership owners were asked the same questions for comparison purposes. The individual groups have the following margin of error levels: consumer +/-3.1%; dealer +/-4.9%; and news media +/-9.8%.

*The numerical scale for the positive mean is: 5 = extremely positive, 4 = very positive, 3 = somewhat positive, 2 = somewhat negative, 1 = very negative. The scale for the satisfaction mean is the same.

Wirthlin Worldwide's results are based on 2000 telephone interviews conducted between October 6 to November 1, 2000 and has a sample error of +/- 2.2%. In addition, Wirthlin results focus on 292 interviews with minorities who had purchased or leased a new vehicle within the last 18 months. A sample of 292 has an error level of +/- 5.7%. The ethnic sub-samples have the following error levels: African Americans +/- 8.8%; Hispanic Americans +/- 11.3%; and Asian Americans +/- 13.9%.

Complete copies of both surveys are available on the web at .

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