Acxiom Asks, "Right-Sizing, Down-Sizing or Wait?" Consumers Say, "It Depends."Acxiom's August Automotive Consumer Dynamics Study
August 11 2008 - 8:00AM
Business Wire
As U.S. automakers continue to cut production aggressively amid
rising gasoline prices, a weakening economy and a rapid shift in
demand away from trucks and SUVs, it�s no surprise that consumers
are reconsidering their choices for transportation. However, an
Acxiom� Corporation (NASDAQ: ACXM) study today revealed that
although the market scrambles to provide a small-car answer to the
masses in response to the rising price of fuel, actual vehicle
purchase propensities show that not all consumers are ready to
trade in their current vehicles for small cars. In fact, Acxiom
found that more than 80 percent of consumers who are currently in
the market to buy a car are not planning to defer their next
purchase. This month�s Acxiom Automotive Consumer Dynamics study
focuses on 130 million consumer households that are feeling the
lifestyle impact of higher fuel costs and the behaviors that are
driving them to down-size (moving into a vehicle segment which
requires lifestyle changes), to right-size (moving to a vehicle
with better fuel efficiency without sacrificing lifestyle utility),
or to wait (deciding not to change vehicles at this time). Top
findings include: Americans have reached their �tipping point�:
More than 62 percent of consumers with household incomes under
$50,000 changed their lifestyle behaviors when fuel hit $3 - $4 per
gallon, while fewer than 47 percent of those in the $100,000
household income bracket made changes. Overall, only 13 percent of
all consumers stated they would not alter their lifestyles even if
fuel reaches between $4 to $5 per gallon. MPG Moved Consumers In
June: In June, and for the first time in 2008, �needing better gas
mileage� was the number one new-vehicle purchase motivator, jumping
over 20% from May and over 41% since March. Lifestyle Changes at
All Income Levels: For higher income households, there is a
tendency for automotive consumers to �go green� as a status symbol
for responsible living. At the low-income levels, consumers� needs
are supplanting their wants, as they consider car pooling and
various forms of public transportation for their day-to-day
commutes, passing over the small car segment entirely.
Additionally, deferring auto purchases ranked last of planned
lifestyle changes across all income ranges. Short-Term Spending
Cuts Equal Long-Term Vehicle Retention: Consumers appear to be
making short-term cuts in their discretionary spending; reducing
the times they dine out, take vacations or buy clothes to
accommodate their transportation and auto purchasing decisions.
�It�s undeniable that consumers are making lifestyle adjustments to
compensate for the high cost of transportation, but what�s
interesting is that far fewer of them are doing anything about
their vehicle purchase intentions,� said Acxiom Automotive
Executive Tim Longnecker. �This study clearly illustrates that
while the perception is that consumers are rushing to buy small
cars, the reality is that many consumers are merely right-sizing,
not down-sizing, their vehicle choices.� The Right-Sizers Acxiom
found right-sizing consumers to be those characterized as Upper
Rung City, comprising mostly wealthy people living in major metro
areas, or Rich and Retired. They are willing to reconsider their
next new vehicle purchase, but they are not yet willing to give up
the freedom and versatility they currently enjoy. Their relatively
high fuel-price tipping points allow them to do most of what
they�ve always done without compromising their lifestyles. For
those who are choosing to �go smaller� (e.g., midsize cars, CUVs
and high-end small cars), compromising on comfort and features
afforded by their current vehicle is not an option. Wide Open
Spaces consumers are right-sizing as well, but only out of
necessity. Identified as the traditional pickup consumer
represented by individuals who live in rural areas and/or use a
pickup primarily for its utility function, they are some of those
hardest hit by high fuel prices since they travel long distances
for both work and play. However, they also are among the largest
proportion of consumers who need and buy trucks, which is why some
in this group are finding CUVs and large cars as viable options.
Additionally, Wide Open Spaces consumers increased their affinity
for seven of nine compact cars included in the study. The
Down-Sizers Acxiom found that Upper Rung Suburban and Married with
Children consumers characterized by upper-middle income families
who are busy raising and catering to the varying needs of their
growing families, have the money to weather most economic storms.
However, their endurance is wearing thin. As keepers of the �family
taxi� their tipping point is more of a compound equation of cost
multiplied by distance. The higher fuel prices go, the more they
become prime luxury mid-size or small-car candidates. Similarly,
Working for a Living consumers live for the monthly budget figure.
It�s no surprise that their fuel-price tipping point was among the
lowest of any consumer group, which is why those at the end of
their leases are gravitating to the familiar brands or those they
perceive as small-car specialists. Willing to Wait Acxiom also
found that a number of Americans are in a wait-and-see mode rather
than one of down-sizing or right-sizing. This group includes the
Urban Marrieds, characterized by consumers with dual incomes
ranging from middle to middle-upper, most of whom are married
without children and enjoy spending money on their busy lifestyles.
They have shorter distances to drive are more willing to take a
wait and see approach to down-sizing. Despite the high percentage
of consumers who said they were changing their driving habits,
Acxiom found that compact cars still under-indexed or indexed
neutral among Upper Rung City, Married with Children and Wide Open
Spaces consumers. When specific nameplates enter the picture, no
clear winners emerged. Only one vehicle, Mazda3, over-indexed for
Upper Rung City, while only two vehicles, Dodge Caliber and
Chevrolet Cobalt, over-indexed for Wide Open Spaces consumers. No
vehicle over-indexed in either 2007 or 2008 for Married with
Children consumers. �While increasing small-car production is in
the strategic plans of many automotive manufacturers, it is clear
that consumers are making lifestyle choices and purchase decisions
far more complex than simply a rush to small,� Longnecker said.
�The silver lining for manufacturers and marketers is that they
don�t have to wait for retooling efforts to reach their target
consumers.� This is the fifth in an ongoing series of monthly
consumer-centric studies of the North American automotive industry
entitled Automotive Consumer Dynamics. To download a copy of the
study, or to subscribe to receive future editions, please visit
www.acxiom.com/automotive (no registration required). Automotive
Consumer Dynamics is powered by Acxiom�s InfoBase-X�, the largest,
most accurate, comprehensive and multi-sourced data collection of
U.S. consumer information in one source. PersonicX� is Acxiom�s
household-level segmentation suite that places U.S. households into
one of 70 distinct segments and 21 life-stage groups based upon
specific consumer behavior and demographic characteristics. About
Automotive Consumer Dynamics Automotive Consumer Dynamics differs
from other studies and analyses available to the industry in that
it focuses on all U.S. consumers versus a sample, is prospective
(what specific vehicles consumers intend to purchase next) versus
historical (what aggregate consumers purchased last), and the
findings are immediately actionable by automotive marketers because
they pertain to specific individuals and households of interest.
Automotive Consumer Dynamics categorizes all U.S. automotive
consumers into 10 consumer groups by combining the attitudes,
behaviors, intentions, and current vehicle ownership of vehicle
buyers across the country. The study offers predictive, timely
information that can improve automotive marketing effectiveness and
overall business performance dramatically through more timely and
targeted communications to key prospects. About Acxiom The global
leader in interactive marketing services, Acxiom connects clients
with their customers through deep consumer insight, powering
effective and profitable marketing initiatives and business
decisions. Our consultative approach spans multiple industries and
incorporates decades of experience in consumer data and analytics,
information technology, data integration, and consulting solutions
for effective marketing across digital, Internet, email, mobile and
direct mail channels. Founded in 1969, Acxiom is headquartered in
Little Rock, Ark., and serves clients around the world from
locations in the United States, Europe, and the Asia-Pacific. For
more information about Acxiom, visit www.acxiom.com. Automotive The
world�s leading automakers, distributors, retail groups, financial
institutions and other companies within the global automotive
industry rely on Acxiom to provide an unparalleled combination of
consumer insights, digital solutions, multi-channel marketing
expertise, analytics and technology, to empower them to become more
consumer-centric and faster-to-market. Delivered with an integrated
consultative approach, we provide superior business value and ROI
for our clients worldwide. Acxiom is a registered trademark of
Acxiom Corporation.
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