recession power session how the tough get going

Recession Power Session:How ‘The Tough Are GettingGoing’

Lenny McGinleyVP, Dealer SalesAutobytel Inc.

2

Survey.com Survey Methodology

• Survey.com was commissioned by Autobytel to conducta survey examining how auto dealerships areresponding to the current economy and high gas prices:• Examine impact the current economy and high gas

prices has had on overall sales• Explore how dealerships feel about the future of

smaller, more fuel-efficient vehicles

• 200 nationally representative dealer responses

• Data was collected from August 25, 2008 throughSeptember 8, 2008.

3

Overall New Vehicle Sales vs. a Year Ago

Source: Survey.com, September 2008

27%

18%

55%

0% 10% 20% 30% 40% 50% 60%

Sales Up

Stayed about the

same

Sales Down

Good News:45% of dealers reported

new vehicle sales were flator up versus a year ago

4


Import vs. Domestic Story

78%

73%

70%

71%

72%

73%

74%

75%

76%

77%

78%

79%

Import Domestic

65%

72%

12%15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Toyota GM

Decline Increase

% o

f dea

lers

repo

rt s

ales

dec

line

More GM Dealers Report SalesIncrease than Toyota Dealers…

% o

f dea

lers

repo

rt s

ales

incr

ease

/dec

line


5


WhoWho’’s Up?s Up?

Honda 50%

Hyundai 50%

Nissan 40%

WhoWho’’s Down?s Down?

Kia 37%

Hummer 33%

Chrysler 26%


6

Overall Used Vehicle Sales vs a Year Ago


36%

25%

40%

0% 10% 20% 30% 40% 50%

Sales Up

Stayed about

the same

Sales Down

Good news: 61% of dealersreported used vehicle sales were

flat or up versus a year ago

41%

32%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Import Domestic

% of dealers report salesincrease

7

Fuel Sipper Sales Up This YearHas your dealership seen an increase in sales of smaller, fuel-efficientvehicles over the past year?


2%

11%

88%

0% 20% 40% 60% 80% 100%

No, sales have gone

down

Stayed the same

Yes,

somewhat/significant

increase

9 out of 10 dealers saw anincrease in smaller, fuel-efficient vehicle sales…50% have seen an over

20% increase

8

Whose Fuel Sipper Sales Are Up This YearWhose fuel sipper sales are up this year?


67%

69%

88%

49%

59%

0% 20% 40% 60% 80% 100%

Nissan

Honda

Hyundai

Domestic

Import

9

Small Cars Driving Sales Health

1%

0%

9%

5%

13%

26%

35%

11%

0%

0% 10% 20% 30% 40%

100% or more

75-99%

50-74%

40-49%

30-39%

20-29%

10-19%

1-9%

0

73% of dealers reporting 10% or moreincrease in sales report significant increase

in small vehicle sales

Top brands spiking smallvehicle sales reporting 20%

or more sales increase

• Nissan 79%

• Honda 62%

• Hyundai 50%


10

Who/What is driving new vehicle sales decline?Which factor has had the single largest impact on declining new vehiclesales across the industry?

16%

10%

37%

38%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

Inventory Mix

Housing

Market/Credit

Crunch

High Gas Prices

THE MEDIA!“The media scaring the

public with all the negativepress”


11

Who is Blaming Who?

13%

26%

37%

42%

31%

27%

60%

38%

43%

32%

35%

31%

53%

20%

0%

9%

16%

8%

20%

7%

0%

0%

10%

20%

30%

40%

50%

60%

70%

Kia

Chev

role

t

Chry

/Jee

p/Dodge

Honda

Toyota

Nis

san

GM

C

High Gas Prices Housing Market/Credit Crunch Inventory Mix

• GMC dealers most likely to blame Gas Prices• Nissan dealers most likely to blame Credit Crunch• Toyota dealers most likely to blame Inventory Mix


12

F-E Vehicle Shift Permanent or Just Another Phase?

Do you think the recent industry-wide shift to smaller, fuelefficient vehicles is permanent?

YES! 46%

Gas prices will stay high and market will continue to be about fuel

efficiency.

NO! 49%

It’s just part of the current cycle; gas prices will decline andtrucks/SUVs etc. will make a comeback.

• 65% Honda dealers see it as permanent vs. 22% of Chevy

• 67% Hummer dealers see it as part of cycle


13

Fuel Efficiency Driving Consumer Behavior?

Do you agree with this statement:

“Fuel Efficiency is the #1 concern for car shoppers today – and thetop factor in their vehicle selection”?

• Import dealers more likely to say yes: 58%

• Domestics more likely to say no: 42%

46%

55%

Yes!No!


14

When Will It Be Over? Or Will It?

When do you think the new vehicle market will significantlyrecover or really start to turn around?

10%

2%

3%

13%

34%

29%

9%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Not sure

Not in the forseeable future

2011

2010

Second half 2009

First half 2009

Later in 2008

Over half of dealers don’tsee turnaround until 2nd Q

2009 and Beyond


15

When Will It Be Over? Or Will It?

Most Optimistic Brand?• Nissan – 27% see turnaround in 2008

27%

6%8% 8%

7%

0%

13%

10%

31%

28%

38%

28%

13%

47%

13%

36%

31% 30%

38%38%

16% 15% 15%

13%10%

4%

0% 0%0% 0% 0%

5%

0%0%

13%

8%

38%

10%

5%

32%30%

11%

30%

21%

7%7%

0%

5%4%

0% 0% 0%

10%

21%

15%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Nissan

GMC

Hyundai

Honda

Toyota

GM

Chry/Jeep/Dodge K

ia

Later in 2008 First half 2009 Second half 2009 2010 2011 Not in foreseeable future I am not sure

Most Pessimistic Brand?• GMC – 40% 2010 - 2011

16

When the Going Gets Tough, the Tough Get Going

What are dealers doing to weather the storm?

13%

17%

21%

50%

0% 10% 20% 30% 40% 50% 60%

Service and aftermarket sales

Used vehicle sales

Targeted, measurable Internet marketing

(leads, used, etc.)

Better follow-up processes and

processes to convert leads into sales

The #1 focus forThe #1 focus fora dealership is a dealership is

follow-up processesfollow-up processesand lead conversion and lead conversion

processesprocesses

Most Important thing to help during downturn


17

When the Going Gets Tough, the Tough Get GoingWhat are dealers doing to weather the storm?

67%

50%

62%54%

46% 47%

63%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nissan

Hyundai

Honda

Toyota G

M

Chry/Jeep/Dodge K

ia

% o

f dea

lers

Greater Focus on Follow-up Processes and Lead Conversion


18


27%

6%

15%

23%

13%

32%

13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Nissan

Hyundai

Honda

Toyota G

M

Chry/Jeep/Dodge K

ia

% o

f dea

lers

Greater Focus on Targeted, Measurable Internet Marketing


19


0%

31%

12%

8%

24%

11% 13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Nissan

Hyundai

Honda

Toyota G

M

Chry/Jeep/Dodge K

ia

% o

f dea

lersGreater Focus on Used Vehicle Sales


20


7%

13% 12%

15%17%

11%13%

0%

5%

10%

15%

20%

25%

30%

Nissan

Hyundai

Honda

Toyota G

M

Chry/Jeep/Dodge K

ia

% o

f dea

lers

Greater Focus on Service and Aftermarket Sales


21


1. Increasing or Standing Firm on Internet Spend 91%

2. Focus on Better Process to Convert Leads Into Sales 77%

3. Making Internet Bigger Part of Budget 69%

4. More Focus on Used 58.5%



22


100%88%

92% 100%91%

79%75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nissan

Hyundai

Honda

Toyota G

M

Chry/Jeep/Dodge K

ia

% o

f dea

lers

incr

easi

ng o

r sta

ndin

g fir

m o

nIn

tern

et s

pend

91% Increasing or Standing Firm on Internet Spend

Honda, Hyundai and Nissan Honda, Hyundai and Nissan top 3 brands increasing spendtop 3 brands increasing spend……

top 3 in sales increasetop 3 in sales increase


23



73%

81% 80%76%

88%

73% 75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nissan

Hyundai

Honda G

M

Toyota

Chry/Jeep/Dodge K

ia

% o

f dea

lers

focu

s on

bet

ter p

roce

ss to

con

vert

lead

s77% Focus on Better Process to Convert Leads Into Sales


24


69% Making Internet Bigger Part of Budget


100%

75%69% 67% 69%

58%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nissan

Hyundai

Honda G

M

Toyota

Chry/Jeep/Dodge K

ia

% o

f dea

lers

sig

nific

antly

/som

ewha

t in

crea

sing

Inte

rnet

spe

nd


25



80%

63%

54%

66%69%

74%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nissan

Hyundai

Honda G

M

Toyota

Chry/Jeep/Dodge K

ia% o

f dea

lers

put

mor

e fo

cus

on U

sed

58.5% More Focus on Used


26

Summary

• Over half of new car dealers seeing sales decline

• Domestics more impacted than Import dealers

• F-E Vehicles driving sales increases

• Dealers split on cause between high gas prices andhousing/credit crunch

• 63% believe industry will recover sometime in 2009

• 91% standing firm or increasing Internet spend

• Majority of dealers report that more intense andeffective lead follow up #1 key to survival


recession power session how the tough get going

Documents

overall sales

sales of smaller

small vehicle sales

sales down55

sales health73

sales down40

fuel efficient vehicle

dealers report sales