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The Automotive Industry Report Q3 2018
The AutomotiveIndustry ReportQ3 2018
THE REPORTEXPLAINED
The automotive industry is ever-changing, making it the marketer’s job to explore new trends, big-picture ideas, and inventive strategies. IgnitionOne uses an index for every metric for efficient analysis of these trends.
The first year, quarter, or month in this report is set to a value of 100. Global statistics are broken down by region: North America, Europe, Latin America (LATAM), and Asia. Numbers are presented according to the North American and European car segmentations.
EXECUTIVE SUMMARY
SITE VISITS
ENGAGEMENT
LEAD VOLUMES
SEGMENT TRENDS
YEAR-ON-YEAR FOCUS
Global site visits this quarter increased by 1% against Q3 2017, particularly driven by high activity in September. Site visits on a regional level indicate mixed trends with LATAM gaining 48% more site visits than last year, North America with a 13% decrease, and EMEA with a 6% increase in visits. Mobile visitation continues to increase globally (20%), mostly at the expense of tablet site visits.
Site engagement grew by 17% globally, with North America showing higher engagement by 46% from Q3 last year. A decline in site visits but higher average engagement could indicate a lower performance of prospecting campaigns being run in NA, but these numbers highlight the importance of identifying and prioritizing more engaged customers who are more likely to convert. LATAM saw 36% growth in engagement, whereas EMEA remained on par.
Overall, leads in Q3 2018 were down 6% from last year, mainly influenced by a 19% decline in NA. Leads on mobile devices continued to grow YoY, particularly in EMEA and LATAM.
SUVs continued to draw a large proportion of site visitors and leads in North America and Europe this quarter. The popularity of this segment has been a consistent trend and automotive manufacturers in North America are optimistic SUV and trucks will continue to be the leading segment to generate interest and sales.
As an effort to provide meaningful indicators of industry trends, we have geared our analysis for this quarter’s report on year-on-year analysis. The purchase cycle for car buyers is largely cyclical and can vary significantly by region and country; to account for seasonal impacts, we have deliberately prioritized highlighting year-on-year trends while still noting significant quarter-on-quarter shifts.
SITE VISITS
Overall site visits in Q3 2018 remained consistent to Q3 last year. EMEA saw increased visitation by 6% from last year while North America had the largest drop by 13%.
GLOBAL BY QUARTER
+1%YoY
0%
20%
40%
60%
80%
100%
120%
2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
SITE VISITS
Mobile visits grew by 18% globally from last year with notable growth in EMEA and LATAM, while visitation remained flat in North America. Site visitors on desktop and tablet devices have been decreasing since Q2 2018, with tablet visitors showing the sharpest decline. Although tablet sales are decreasing, the global number of tablet users is still growing (Source: Statista). This indicates that it isn’t necessarily lower usage of tablets that is causing the decline in site visits, but more likely the decline in usage of tablets specifically for automotive websites—perhaps due to less optimal screen size, site interface, or otherwise.
VISITS BY DEVICE
0%
20%
40%
60%
80%
100%
120%
-12%YoY
2017–Q3 2017–Q4 2018–Q1
DESKTOP
2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
+18%YoY
MOBILE
-18%YoY
TABLET
SITE VISITS
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
+48%YoY
2017–Q3 2017–Q4 2018–Q1
APAC
2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
+6%YoY
EMEA
+48%YoY
LATAM NA
-13%YoY
In North America, higher interest rates have made it more expensive to purchase a vehicle compared to 2017. The looming threat of tariffs on European and Japanese imports could further drive up expected costs for car buyers. Given the uncertainty of vehicle prices in the coming months, it is likely that consumers are taking time to compare prices and carefully consider their purchase, thereby extending the path-to-purchase. This is likely the reason site visits have remained consistent year over year while consumers weigh their options to find the best deal possible.
The LATAM market is experiencing a number of transformative shifts driven by social and economic factors due to pending trade deals. The healthy uplift in KPIs presents a positive outlook but the economic rebound is waning and could impact leads and sales in Q4.
VISITS BY REGION
Site engagement grew by 17% globally and also grew within each region from Q3 of last year. NA had the highest increase in engagement from last year, followed by LATAM. Engagement across all devices also grew YoY as well as from last quarter.
ENGAGEMENT
ENGAGEMENT BY QUARTER
0%
20%
40%
60%
80%
100%
120%
2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
+17%YoY
Consumers are more engaged year over year on both mobile and desktop. The increased engagement on mobile is expected given the growing consumer preference for this device: according to a Facebook1 study, 58% of US auto shoppers agree that in the future their smartphone is likely to be the only device they use for vehicle research. Mobile will remain a crucial part of the customer experience. The engagement boost on mobile presents an opportunity for marketers to think about additional tactics to convert highly engaged users with retargeting, social, and mobile site strategies.
ENGAGEMENT
ENGAGEMENT BY DEVICE
0%
20%
40%
60%
80%
100%
120%
140%
+23%YoY
+15%YoY
DESKTOP MOBILE TABLET
2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
+23%YoY
Although North America saw a decrease in site visitation, site engagement grew year over year more than any other region. This quarter also had the highest levels of engagement within the past four quarters for North America. Engagement in EMEA remained consistent from Q3 of last year, although higher from last quarter.
ENGAGEMENT
ENGAGEMENT BY REGION
0%
20%
40%
60%
80%
100%
120%
140%
160%
APAC+12%YoY
2017–Q3 2017–Q4 2018–Q1
APAC
2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
EMEA LATAM NA
EMEA+1%YoY
LATAM+136%
YoY
NA+46%YoY
Engagement in individual segments remained consistent this quarter, showing little or no change from Q2 2018 and a general decline from Q3 of last year. This trend is consistent with the similarly stable performance in site visits.
ENGAGEMENT
ENGAGEMENT BY SEGMENT (EU CLASSIFICATION)
A-SEGMENTMINI CARS
B-SEGMENTSMALL CARS
J1-SEGMENTMINI SUV
D2-SEGMENTLARGE CARS
D1-SEGMENTLARGE CARS
C-SEGMENTMEDIUM CARS
J3-SEGMENTSUV
J2-SEGMENTCOMPACT SUV
120%
100%
80%
60%
40%
20%
0%
Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3Q2Q2Q2 Q1Q1 Q4Q1 Q4Q4Q2Q1Q4Q2Q1Q4Q2Q1Q2Q1Q2Q1 Q4Q4Q4
2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018
Continued consumer demand for SUVs, which yield high profit margins, has helped to offset the impact of consumers’ waning interest in sedans. SUVs are expected to continue to dominate consumer preference given more fuel-efficient options in the market place. Consumers are showing peak interest in the SUV category, which is driving the upward trend in engagement.
ENGAGEMENT
ENGAGEMENT BY SEGMENT (NA CLASSIFICATION)
NA Segments
2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3
Compact Cars Large Cars Midsize Cars Small Pickup Trucks Small SUVs Standard Pickup Trucks Standard SUVs Subcompact Cars
0%
10%
30%
50%
70%
90%
110%
20%
40%
60%
80%
100%
120%
Lead volume was 6% lower YoY in Q3 2018 and slightly down from last quarter. The decrease was mostly driven by North America while leads in EMEA grew by 3% from last year.
LEADS
LEADS BY QUARTER
0%
20%
40%
60%
80%
100%
120%
2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
-6%YoY
Consistent with global site visitation patterns, leads increased on mobile devices while declining for desktop. The shift in consumer preference to browsing on mobile is particularly evident in EMEA, which has seen strong growth in mobile leads throughout this year.
LEADS
LEADS BY DEVICE
0%
20%
40%
60%
80%
100%
120%
140%
-16%YoY
-9%YoY
DESKTOP MOBILE TABLET
2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3 2017–Q3 2017–Q4 2018–Q1 2018–Q2 2018–Q3
+8%YoY
Lead volume fell in the US this quarter, and with that a decline in sales. Year-on-year analysis of Q3 needs to factor in the impact of the 2017 and 2018 hurricanes: Hurricane Florence heavily flooded parts of the Carolinas in September this year, disrupting regular activity. As a result Q3 2018 performance is at even further odds with Q3 2017, when owners were purchasing replacement vehicles after Hurricane Harvey hit Texas in August 2017 and boosted subsequent leads and sales.
Europe faced an atypical quarter as well, in this case caused by the introduction of the new WLTP (Worldwide harmonised Light vehicles Test Procedure): a more practical test for measuring the energy or fuel consumption, levels of pollutants, and electric range of cars. This test replaced the NEDC test on September 1st 2018. Car sales rose in July and August, then declined by 23.5% in September (Source: ACEA). Compared to Q3 2017, sales in Q3 2018 increased by 1.5%, which indicates the purchase acceleration in July and August. Leads in September 2018 increased by 3% from September 2017, and we anticipate that the effect of the WLPT will no longer be evident in Q4.
LEADS BY REGION
While the share of site visits declined for medium and larges SUVs (J2 & J3), leads for these segments increased. This likely indicates that prospects for SUVs are further down the purchase funnel than prospects for other segments.
In 2017, C-segment models (medium cars) generated the most leads, but there has since been a shift toward smaller cars in Europe, at least within traditional segments (A to E). This quarter, more B-segment leads requested information, test-drives, or contact information than the previously strong C-segment. It’s apparent that a significant part of demand for C-segment cars have moved to the Mini-SUV’s (J1).
LEADS
EUROPEAN LEADS (EU SEGMENTS)
EU Segments
0% 5% 10% 15% 20% 25% 30%
2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3
A-segment Mini Cars
B-segment Small Cars
C-segment Medium Cars
D1-segment Large Cars
D2-segment Large Cars
J1-segment Mini SUVs
J2-segment Compact SUVs
J3-segment SUVs
M1-segment Mini MPVs
10%
9%
19%
18%
21%
17%
26%
30%
10%
13%
2%
6%
5%
3%
5%
3%
2%
2%
SUV categories continue to dominate site traffic, engagement, and leads from customers this quarter and this trend is expected to continue into 2019. We expect that automakers are pivoting to provide more available options of SUVs and trucks to the marketplace, since high demand presents the opportunity for automakers to win market share for these profitable categories. According to separate retail sales data from the Bureau of Economic Analysis2, SUVs accounted for more than two-thirds of all U.S. auto sales last month. A decade prior, sales of smaller cars and light trucks were roughly even, with smaller cars maintaining a slight advantage with a market share of 50.3 percent. In the past 10 years, trucks and SUVs have gone from occupying less than half of the country’s retail sales space to dominating more than two-thirds of it. Though as fuel prices begin to rise and the regulation of CO2 emissions are put into place in Europe, automakers will need to invest in technology to meet demand in the marketplace for more fuel-efficient vehicles. Nevertheless, we expect this category to continue dominating the share of site visits, engagement, and leads into the foreseeable future.
LEADS
NORTH AMERICAN LEADS (NA SEGMENTS)
NA Segments
0% 5% 10% 15% 20% 25% 30%
2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3
Compact Cars
Large Cars
Midsize Cars
Small Pickup Trucks
Small SUVs
Standard Pickup Trucks
Standard SUVs
Subcompact Cars
10%
12%
4%
3%
5%
5%
19%
18%
23%
22%
7%
8%
5%
6%
27%
26%
LEADS
COMPARISON OF TWO METRICS
VISITORS VS AVERAGE ENGAGEMENT: NORTH AMERICA
To determine if volume of visitors was directly correlated to average engagement in a segment, we compared these metrics side-by-side.
To conduct this comparison, we summarized September’s data by segment and then used a statistical technique to convert each metric (visitation, engagement, leads) to 0-1 scale. Using the same scale allows us to compare metric against each other.
Our analysis shows that although small pickup trucks constitute a small percentage of site visitors, the segment generates significant interest from users, more so than any other category. Large and midsize vehicles have the lowest engagement compared to number of visitors they attract.
LARGE CARS
MIDSIZE CARS
TWO-SEATERS
STANDARD PICKUP TRUCKS
SUBCOMPACT CARS
COMPACT CARS
SMALL SUV
STANDARD SUV
SMALL PICKUP TRUCKS
VISITORS AVERAGE ENGAGEMENT
LEADS
VISITORS VS AVERAGE ENGAGEMENT: EMEA
A similar process was applied to electric vehicle models in EMEA, where we obtained visitors and engagement per country and converted each metric to a 0 to 1 scale. Norway leads the region for electric vehicle sales but was excluded from this analysis due to small sample size.
Austria and Netherlands both have lower volumes of site visitors compared to other countries, but users in these countries are more engaged in electric vehicle models than other countries. Other countries with high engagement but low visitation include Belgium and Luxembourg. The United Kingdom and Italy rank among the highest countries in terms of visitation but rank moderately low for engagement.
UK
RU
RO
PT
PL
NL
LU
IT
GR
FR
ES
BE
AT
VISITORS AVERAGE ENGAGEMENT
RACHEL PIERSON
STEPHAN VAN DEN BREMER
Rachel has over 15 years of diverse marketing and advertising experience within the automotive category. Throughout her career she has worked with agencies and global marketing teams to develop innovative strategies to drive brand awareness and increase marketing performance. Notably she has partnered with brands including Cadillac, Chevrolet, Ford, and FCA to name a few.
Stephan has worked in the automotive industry for over thirteen years. As IgnitionOne’s Global Head of Automotive, Stephan is responsible for driving business growth in the automotive vertical, focusing on expansion and performance excellence. He has held various sales and marketing positions within the Volkswagen Group in the Netherlands. Prior to joining IgnitionOne, he led Autobytel Netherlands, focusing on online lead generation and CRM solutions for the automotive sector.
Global Director of Strategic Accounts
Head of Automotive
CONTRIBUTINGAUTHORS
IgnitionOne’s leading Customer Intelligence Platform empowers marketers to find and engage their most valuable customers across channels using a data-driven approach. By focusing on
cross-channel scoring and robust personalization, IgnitionOne’s technology provides real-time, actionable insights for smarter
marketing decisions and omnichannel engagement to maximize overall results. IgnitionOne is one of the largest independent
marketing technology companies in the world, currently scoring over 600 million users monthly in 75 countries and powering
more than $60 billion in revenue each year for leading brands, including General Motors, Stuart Weitzman, The Cosmopolitan
and Speedo, as well as advertising agencies such as 360i, GroupM and Zenith Media.
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