2015 emerging car care trends
TRANSCRIPT
Copyright 2013. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary
and Confidential and may not be disclosed in any manner, in whole or in part, to any third
party without the express written consent of NPD.
2015 Emerging Car Care Trends
The NPD Group
August 2015
2
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■Consumer are on the Rebound
■New Cars are Creating New Opportunities
■ Aging Cars are Still Driving Sales
■Consumers Value Premium
■ Innovation Leads to Growth
■ The Evolving Installed (DIFM) Market Landscape
2015 Emerging Car Care Trends
The NPD Group, Inc. | Proprietary and Confidential 3
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Consumers are on the Rebound!
The NPD Group, Inc. | Proprietary and Confidential 4
5
1$ Trillion Consumer Spend
Retailers
Outlets122,000
723
6
Apparel
+2.4%
$210.1B
Accessories
+2.8%
$53.1B $21.4B
+2.0%
Small Appliances
+2.8%
$21.8B
Home Textiles
+5.4%
$22.6B
Video Games4
$11.3B
+5.6%
Beauty2,5
+3.0%
$437.0B
Commercial Food Service8
a Year over year % change
a Dollars (proj.)
-5.4%
$106.6B
Consumer Electronics1
Office Supplies3
+2.2%
$23.8B
Housewares
+0.4%
$5.5B
Auto2
+2.6%
$14.2B
Source: The NPD Group/Consumer Tracking Service,
*Nielsen Scantrack, 52 weeks ending March 28,‘15
Last updated: May 2015
*Footnotes on Slide 6
TOTAL: $1,782.2B (+3.5%)
w/o Commercial Food Service: $1,345.2B (+3.6%)
Industry Trends
Total U.S. Market (all channels)12ME March ‘15
$24.5B
+8.2%
Toys
+3.9%
$63.3B
Footwear
$269.2B
+1.8%
*Dry Grocery6
+1.1%
$210.7B
*Household
Products6,7
+3.3%
*Health & Beauty
Aids6
$98.3B$189.0B
+3.9%
*Perishable
Grocery6
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The NPD Group/Car Care TrackYTD June 2015 /% Transactions/n = 38,498 & 34,035
Do-It-Yourself market
7
Almost 2 out of 5 transactions made in the automotive aftermarket were for DIY product purchases.
Total DIY Industry
% Transactions
40% 37%
YTD June 2014 YTD June 2015
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Three Factors are Highly Correlated to
Automotive Product Sales Volume
8
Forecast Model Drivers
Miles Driven
Retail Price
(NPD’s Retail
Tracking
Service)
CPI New
and Used
Vehicles
2,810
2,860
2,910
2,960
3,010
3,060
Annual Vehicle Mileage Volume (Billions)
May miles driven set a new record and is
now 42 billion miles over the pre-recession
high
Source: US Dept. of Transportation/ Federal Highway Administration
9
• Culture Shift
• Workforce Trends
• Generational Change
The last time real gasoline price was sustained at or
below today’s level miles driven was growing at 4%
10
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$5.00
Jan-7
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4
Nominal Gasoline Price Real Gasoline Price (Dec 2014) Vehicle Miles of Travel (Billions) 12 Month Moving Average
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In spite of a 3.7% increase in gallon
demand, consumers have spent $64 billion
less at the pump
$241
$177
$0
$50
$100
$150
$200
$250
$300
1st 26 Weeks 2014 1st 26 Weeks 2015
Billi
on
s
Gasoline Spending
The NPD Group, Inc. | Proprietary and Confidential 11
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Year to Date Weather
12
Weather had a big impact on sales Year to Date:
• 23 states had one of their 10 coldest February temperatures on record
• 12th warmest March in the Total US
• Wettest May in history for the Total US
• 2nd warmest June in the Total US
Year to Date Jul 04 2015 Pct. Chg. Vs. Year Ago
4.1% 4.3%
2.3%
5.6%
0.9%
3.4%
0.2%0.7%
Grand Total Accessories &Appearance
Chemicals,Additives & Fluids
Maintenance &Repair
Dollars Units
Source: The NPD Group/Retail Tracking Service
Year to date sales gains of more than 4%
are exceeding expectations
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New Cars are Creating New Opportunities
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Source: The NPD Group/Consumer Outlook Survey
One-Quarter Plan to Purchase a Vehicle in
2015, Half of Those will be a Used Car
15
14%
62%
24%
0%
20%
40%
60%
80%
100%
Might/Plan topurchase a new/usedvehicle
Do not plan onpurchasing a vehicle
Don't know
8%
4%
7%
6%Plan to PurchaseNew
Might PurchaseNew
Plan to PurchaseUsed
Might PurchaseUsed
-1
-1
+2
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Sources: Autocare Association IIR March 2015 Report
More than 38 Million New Cars have Hit the
Road since January 2013
16
Automotive Sales Trends: 2004-2015
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD MAR15
New Car Sales (% Chg. Vs. Year Ago)
0 to 3 year Old Vehicle Purchase Index
106
140129
111
Glass Cleaners Tire Dressing Tire Foam Wax/Polish
Source: The NPD Group/Car Care Track
Newer car owners are more likely to buy
appearance products…
The NPD Group, Inc. | Proprietary and Confidential 17
* Index = 0-3 years old vehicle transaction share___ * 100
all vehicle transaction share
Year to Date July 04 2015 Pct. Chg. Vs. Year Ago
4.1%
5.9%
3.7%
0.9%2.7%
2.7%
Grand Total Appearance Accessories Appearance Chemicals
Dollars Units
Source: The NPD Group/Retail Tracking Service
…Which is leading to gains in retail sales
The NPD Group, Inc. | Proprietary and Confidential 18
Winter Merchandise,
Towels/Rags and Other
Wash/Detailing
products
Protectants, Wax/Polish,
Carpet and Fabric Care,
Cleaners, Glass Care,
Leather Care,
Lens/Plastic Care,
Tire/Wheel Care
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Aging Cars are Still Driving Sales
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0
10
20
30
40
50
0-3 years 4-6 years 7-9 years 10-15 years 15+ years
Pro
port
ion o
f O
wners
Age of Vehicle at Time of Purchase
Past 3 Years
More Than 3 Years Ago
Consumers today are purchasing cars that are already more
than 10 years old
Purchased Used Vehicle
20
Source: NPD Automotive “It’s New to Me” Topical Report
Age of Used Cars at Time of Purchase
The majority of todays older car owners
plan to keep for more than 4 years
32%25%
42% 47%
30% 44%
31%33%
11%10% 8%
8%27%
21% 20%12%
0-3 years 4-7 years 8-10 years 11+ years
10+ years
7-9 years
4-6 years
0-3 years
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Age of Vehicle
Length of Intended Ownership
Source: The NPD Group/Consumer Outlook Survey
14%
17%14%
11%8%
2%
8%12%
15%22%
0-3 years 4-7 years 8-10 years 11-14 years 15+
Considering New Vehicle Considering Used Vehicle
And while almost half of older car owners want to
replace within the next 3 years, most are considering
another used car
The NPD Group, Inc. | Proprietary and Confidential 22
Age of Vehicle
2015 Vehicle Purchase Intentions
Source: The NPD Group/Consumer Outlook Survey
Older car owners exhibit desirable
maintenance behaviors
12%
7%
7%
6%
5%
5%
23%
14%
14%
11%
10%
9%
% 5% 10% 15% 20% 25% 30%
Change my air filter
Replace fuel filter
Start using a fuel additive
Change spark plugs
Start using a more premium oil
Start changing oil more often
0-3 years
11+ years
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Select 2015 Maintenance Behaviors by Age of Vehicle
Source: The NPD Group/Consumer Outlook Survey
Older car owners are twice as likely to
expect to spend more than $1,000
The NPD Group, Inc. | Proprietary and Confidential 24
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
AllRespondents
0-3 years 11+ years
$1000+
$500-999
Expected 2015 Maintenance and Repair Spending
Source: The NPD Group/Consumer Outlook Survey
Driver Need Top Performing Segments YTD Dollar Growth
My car won’t start! • Automotive Batteries +6.3%
I need this car to last! • High Mileage Motor Oil +10.1%
My lights aren’t working!
• Capsules/Bulbs
• Miniature Replacement Bulbs
• Lens Restoration Kits
• Headlight Assemblies
• Tail Light Assemblies
+10.6%
I need a quick easy fix!
• Multisystem Additives
• Oil Stabilizers
• Emissions Control
• Engine Stop leak
• AC Charging Kits
+7.1%
I’m doing repair and
maintenance!
• Brake Cleaner
• Power Steering Fluid+8.9%
Top 14 aging related segments based upon YTD dollar gain
(Over $135 Million Gained YTD June vs. Year Ago)
Drivers of aging vehicles have needs...
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Consumers Value Premium
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71%
66%
64%
58%
55%
53%
42%
33%
33%
26%
3%
3%
5%
5%
6%
6%
12%
16%
17%
23%
Is reasonably priced
Is made with quality materials
Increases gas mileage in vehicle
Increases engine performance
Easy to install or use
Cleans the engine
Is better for the air/environment
Made with enviro-friendly materials
Enhances the appearance of the vehicle
Made with recyclable materials
Consumers today define value as more than
just price
The NPD Group, Inc. | Proprietary and Confidential 27
Top 2 Box ImportanceBottom 2 Box Importance
Automotive Product Purchase Drivers
Source: The NPD Group/Consumer Outlook Survey
27%
19%
19%
15%
6%
9%
9%
11%
% 10% 20% 30% 40% 50%
Automotive parts
Automotive maintenance products
Fuel/oil additives
Appearance and accessories
Purchase Highest Quality Product Purchase Least Expensive Product
The quality oriented consumer is prevalent
in automotive categories
The NPD Group, Inc. | Proprietary and Confidential 28
*Base: Those
who purchase
the category
Price vs. Quality
Source: The NPD Group/Consumer Outlook Survey
Consumer affinity for premium items is
broad based
Beauty
Blenders
Single Serve Coffee Makers
Restaurants
The NPD Group, Inc. | Proprietary and Confidential 29
Source: The NPD Group
Top 8 premium differentiated segments based upon YTD dollar gain
(Over $96 Million Gained YTD June vs. Year Ago)
Consumers are opting for premium value
The NPD Group, Inc. | Proprietary and Confidential 30
Premium Segment YTD Dollar Growth
• Premium Beam Wiper Blades
• Full Synthetic Motor Oil
• High Level Premium Spark Plugs
• Hybrid Wiper Blades
• Premium/Performance Oil Filters
• Full Synthetic HD Oil
• Performance/Extended Life Air Filters
• HID Capsules and Bulbs
+16.4%
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Innovation Leads to Growth
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Vent Clip Air Fresheners
32
Air Fresheners Two Year Dollar Growth – June 2015
8%
25%
12 ME June 2015 vs 2013
Total Air Fresheners Vent Clips
Source: the NPD Group/Retail Tracking Service
Three segments provide examples where
innovative products drive accelerated growth
33
Source: NPD Automotive “It’s New to Me” Topical Report
Trim Care
34
Appearance Chemicals Two Year Dollar Growth – June 2015
8%
32%
12 ME June 2015 vs 2013
Total Appearance Chemicals Trim care
Source: the NPD Group/Retail Tracking Service
Three segments provide examples where
innovative products drive accelerated growth
35
Source: NPD Automotive “It’s New to Me” Topical Report
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Other Coatings
36
Paint and Coatings Two Year Dollar Growth – June 2015
7%
173%
12 ME June 2015 vs 2013
Total Paint/Coatings Other Coatings
Source: the NPD Group/Retail Tracking Service
Three segments provide examples where
innovative products drive accelerated growth
37
Source: NPD Automotive “It’s New to Me” Topical Report
Future Growth
Aging Vehicles
Innovation
Premium Value
The NPD Group, Inc. | Proprietary and Confidential 38
High Mileage Oil
Automotive Batteries
Capsules/Bulbs
AC Charging Kits
Beam Wiper Blades
Hybrid Wiper Blades
Synthetic Motor Oil
High Level Premium Spark Plugs
Premium/High Mileage Filters
Aftermarket Growth Trends
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The Evolving Installed Market Landscape
The NPD Group, Inc. | Proprietary and Confidential 39
Do-It-For-Me Market
40
As of June 2015, over 3 out of 5 transactions made in the automotive aftermarket were for DIFM services
The NPD Group/Car Care Track
Total DIFM Industry
% Transactions
63%
The top 6 services account
for 50% of transactions:
Oil Change
Tire Rotating/Balancing
Brake Service
Car Wash
Air/Cabin Filter Replacement
Tire Replacement
Dealerships lead the way in outlet shareService Transaction Share 12 ME Jun 2015
41
Dealerships • 27%
Quick Lubes
• 15%
Repair Shops
• 14%
Tire Shops • 15%
The NPD Group, Inc. | Proprietary and Confidential
Source: NPD Group / Car Care Track
DIFM
Dealer share is skewed to newer vehiclesService Transaction Share 12 ME June 2015
0%
10%
20%
30%
40%
50%
60%
70%
0-3 years old 4-7 years old 8-11 years old 12-15 yearsold
16+ years old
Dealerships Repair Shops
The NPD Group, Inc. | Proprietary and Confidential 42
43
24%
7%
5%
5%
5%
5%
4%
4%
4%
4%
3%
3%
3%
3%
3%
Oil Change
Tire Rotating or Balancing
Brake Service
Car Wash/Car Detailing
Air Filter/Cabin Filter Rplcmnt
Tire Replacement/New Tires
Air Conditioning or Heating Svc
Wiper Blade/Refill Installation
Veh Inspection/Emission Test
Steering and Suspen/Tire Align
Tire Repair
Battery Replacement/New Battery
Cooling System Service
Electrical/Ignition Service
Engine Repair
All Service Transactions –12 ME June 2015
Oil Changes are the most common type of serviceService Transaction Share – 12 ME June 2015
Source: NPD Group / Car Care Track
DIFM
13
29
2 5 4
87
71
98 95 96
Total PCMODIFM
Dealerships Quick Lubes Repair Shops Tire Shops
Free Oil Change Paid Oil Change
44
Free oil changes most common at DealershipsDIFM Outlet Quart Share by Free / Paid Oil Change–12 ME June 2015
The NPD Group, Inc. | Proprietary and Confidential
Source: NPD Group / Car Care Track
DIFM
Dealerships lead the way in Oil Change
Quart ShareOil Change Quart Shares – 12 ME Jun 2015
45
Dealerships • 39%
Quick Lubes
• 20%
Repair Shops
• 12%
Tire Shops • 10%
The NPD Group, Inc. | Proprietary and Confidential
Source: NPD Group / Car Care Track
DIFM
Tire Shops are not getting their “fair share”
of oil changesService Share Transaction Index – 12 ME June 2015
0
20
40
60
80
100
120
140
160
Dealerships Quick Lubes Repair Shops Tire Shops
Oil Change
The NPD Group, Inc. | Proprietary and Confidential 46
Source: NPD Group / Car Care Track
Repair shops may have some upside in the
tire businessService Share Transaction Index – 12 ME June 2015
0
50
100
150
200
250
300
Dealerships Quick Lubes Repair Shops Tire Shops
Tire Rotating Tire Replacement(New) Tire Repair
The NPD Group, Inc. | Proprietary and Confidential 47
Source: NPD Group / Car Care Track
Repair shops must defend leadership in the
brake service categoryService Share Transaction Index – 12 ME June 2015
0
20
40
60
80
100
120
140
160
180
Dealerships Quick Lubes Repair Shops Tire Shops
Brake Service
The NPD Group, Inc. | Proprietary and Confidential 48
Source: NPD Group / Car Care Track
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential
Source: The NPD Group/Car Care Track
Repair Shops Dominate Most Major Repair
Oriented Services
49
Leading Service Share Transaction Indices – 12 ME June 2015
Dealerships Quicklubes Repair shops Tire shops
• Tire rotating
• Oil Change
• Air Filter
• Car Wash
• Air Filter
• Oil Change
• Wiper Blades
• Brakes
• Engine Repair
• Electrical/Ignition
• Inspection
• Cooling System
• AC/Heating
• Steering/Suspension/
Alignment
• New Tires
• Tire Repair
• Rotating/balancing
• Steering/Suspension/
Alignment
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Strategies for Growth
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Strategies for growth in 2015
1. Close the oil change opportunity gap
Respondents who went to Dealerships for their oil change
service, tend to be very loyal to that outletChannel Loyalty - Buyer Share – 12ME June 2015
52
62%
76%
49%
60%
52%
21%
12%
32%
21%
28%
7%
4%
8%
6%
8%
0% 20% 40% 60% 80% 100%
Total
Dealerships
Quick Lubes
Repair Shops
Tire Shops
I always go to this outlet I usually go to this outlet I usually go to another outlet
The NPD Group, Inc. | Proprietary and Confidential
Source: NPD Group / Car Care Track
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential
Source: The NPD Group/Car Care Track
Consumers Offer Very Different Reasons for
Selecting Their Oil Change Outlet
53
Reasons For Oil Change Channel Selection Indices
Dealerships Quick Lubes Repair Shops Tire Shops
• Warranty/
Guarantee included
• Maintain vehicle
service history
• Cleanliness
• Speed of service
• Location
• Coupons/Offers
• Recommended by
someone I trust
• Knowledge of
employees
• Feel like a valued
customer
• Friendliness of
employees
• Quality of service
• Coupons/Offers
The NPD Group, Inc. | Proprietary and Confidential 54
Strategies for growth in 2015
1. Close the oil change opportunity gap
2. Defend your turf with aging vehicles
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The NPD Group/Retail Tracking Service
Targeting the Aging Vehicle Consumer
55
Vehicles 8 years old and over
Services
Transaction Index
• Fuel systems, automotive lighting,
exhaust, engine repair
Reasons more likely to
choose outlet
• Recommended by someone I trust,
price, visited web site or used app
to get info
Demographic
Distinctives
• More likely to be under age 24,
and moderate to lower income,
just as likely to be female
The NPD Group, Inc. | Proprietary and Confidential 56
Strategies for growth in 2015
1. Close the oil change opportunity gap
2. Defend your turf with aging vehicles
3. Invest in the future by winning with Millennials
40%
17%
18%
17%
Non-Millennials
29%
23%
18%
22%
Older Millennials
25%
25%
20%
24%
Dealerships
Quick Lubes
Repair Shops
Tire Shops
Younger Millennials*
Millennial consumers typically do not prefer Dealerships
The NPD Group, Inc. | Proprietary and Confidential 57
= significantly greater than other age groupsSource: NPD Car Care Track / 12MESep2013
Millennial consumers are more likely to have had most
vehicle services performed
The NPD Group, Inc. | Proprietary and Confidential 58
Younger
Millennials*Older Millennials Non-Millennials
Oil Change 57% 63% 68%
Tire Rotating or Balancing 22% 20% 20%
Brake Service 24% 19% 12%
Air Filter/Cabin Filter Replacement 15% 17% 13%
Tire Replacement/New Tires 21% 17% 11%
Car Wash/Car Detailing 17% 16% 10%
Vehicle Inspection/Emission Test 14% 12% 9%
Steering and Suspension/Tire Align 15% 12% 8%
Wiper Blade/Refill Installation 15% 13% 8%
Air Conditioning or Heating Service 16% 13% 6%
Source: NPD Car Care Track / 12MESep2013
*Car Care Track data does not include 16-17 year old drivers
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■Consumer are on the Rebound!
■New Cars are Creating New Opportunities
■ Aging Cars are Still Driving Sales
■Consumers Value Premium
■ Innovation Leads to Growth
■Opportunities to Explore in the Evolving Installed Market Landscape
2015 Emerging Car Care Trends
The NPD Group, Inc. | Proprietary and Confidential 59
In Summary
Industries
Automotive
Beauty
Consumer Electronics
Entertainment
Fashion
Food / Foodservice
Home
Luxury
Mobile
Office Supplies
Sports
Technology
Toys
Video Games
Countries
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Canada
China
France
Germany
Italy
Japan
Mexico
Netherlands
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Portugal
Russia
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Spain
Sweden
Taiwan
United Kingdom
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