Buyer choice in a new vehicle has also been affected by Australia’s inflation rate and the rising cost of living.

CarsGuide Media’s “Stock shortages and purchase triggers survey” said that the usual buying patterns have become disrupted. For new-car buyers now in the market, if their first preference isn’t available immediately, one-in-three (29 per cent) of intenders will buy an alternate vehicle brand, rather than waiting for delivery of their preferred new car.

It said that the automotive industry must adapt its marketing to suit, and to build trust with existing customers while at the same time find new customers beyond its traditional audience.

CarsGuide Media’s head of Partnerships Automotive, Jodie Smith, said: “The current economic conditions have created the perfect storm for consumers to consider products and services that they’ve previously overlooked.”

“Stock shortages have driven new car prices higher, with more than one-third (29 per cent) of Australians surveyed saying they have delayed selling their vehicle, with the majority (66 per cent) holding onto their vehicle for more than three years.”

Jodie Smith

The research showed that the used-car market had increased prices by a record 65 per cent year-on-year in the first half of 2022.

Many buyers (29 per cent) believe that the higher used-car prices make it more economical to buy new, out of step with the traditionally separated used and new car markets. 

“Additionally, used car buyers considering new cars are more open to alternative brands from companies who have products readily available with 33 per cent of used-car buyers saying they are more likely to consider an alternative brand compared to 29 per cent of new car intenders,” the research said. 

Ms Smith said that the changing landscape “demands a shift in the way we market and sell to consumers as more traditional avenues won’t reach cohorts who are transcending conventional boundaries whether they’re buying cars, vans or motorcycles.”

“Marketers need to adapt to the rapidly changing landscape with more targeted campaigns to reach newly emerging cohorts and subsets that these unique circumstances have produced – they must target beyond their traditional base,” she said. 

The research showed that the current volatile economic climate had “a profound impact” on more traditional marketing approaches, where trusted, dependable brands previously outperformed products and services from companies that consumers have not considered in the past. 

“As a result, successful marketers are moving with their audience across a multitude of businesses to promote convenience and value,” Ms Smith said.

“This is a significant opportunity for challenger brands to develop a relationship with customers who were seemingly previously out of reach.“The acceptance of less traditional brands has been seen in supermarkets, for instance, who’ve reported increased interest and experimentation with products or brands outside of those originally sought.”

On deciding which bands to buy, CarsGuide Media said buyers are now more often having their brand preferences challenged as they become more pragmatic.

This means that marketers must follow them by adapting their messaging and broadening the scope of their activity.

“Not only that, as the economic environment becomes more uncertain, marketers need to be smarter with how they allocate their media investment to ensure they are reaching their key markets as efficiently as possible,” Ms Smith said.

“To help, CarsGuide’s Audience Match allows brands the opportunity to focus on their most profitable customers, and those that share common audience characteristics, while suppressing existing customers that may be less inclined to upgrade due to a recent purchase or age of their current vehicle.”

The research said 29 per cent of new-car intenders will buy an alternate vehicle brand instead of waiting on delivery of their preferred new car.

Brands suffering stock shortages are likely seeing a decline in interest. While some are willing to wait for their car to become available (29 per cent), most intenders are open to new brands with only 16 per cent not wanting to learn about alternate brands that have stock available now.

“According to the research, the biggest opportunity for brands is to target outside of their current customer base,” Ms Smith said.

“Standing still at a time like this will see many miss a fantastic opportunity, especially for challenger brands, who can leverage this window to win conquest customers and generate trust, acceptance and brand loyalty for the future.”

CarsGuide Media’s research also looked at the rising cost of living and how it is beginning to hit Australian’s back pockets.

It said that COVID-19 lockdowns provided many consumers with the opportunity to save more than usual, leading to increased financial security. This is reflected in 53 per cent of new-car buyers and 61 per cent of used buyers “accessing their piggy bank to fund their upgraded wheels.” 

“The fact that the majority of buyers are ready to buy means that the time from consideration to purchase is more rapid than before,” Ms Smith said.

“It’s critical that both private sellers and dealerships have their vehicle seen far and wide for a faster sale – again, beyond traditional bases – as buyers are primed and want to purchase, with a willingness to transact that we haven’t seen before.”

More than half of new-car intenders (56 per cent) are dipping into their personal savings to make their purchase. 

That percentage goes up for higher-priced cars. With buyers with budgets over $80,000, 7 per cent are more likely (63 per cent) to fund their new car with savings. 

The research said that this readiness to buy is also reflected in the used-car market where the average budget is $30,555 – just shy of the record average transaction price of $33,000 set in the first quarter of 2022. 

“As the economic climate impacts buyer behaviour, marketers have an active opportunity to tap into new cohorts and convert Australians previously sceptical of challenger brands,” the research said.

“For established brands, it means responding rapidly to remain effective, and ensuring that more consumers have a pragmatic reason as well as an emotional pull for your offering.”

CarsGuide Media’s “Stock shortages and purchase triggers survey” was conducted in June 2022, which surveyed over 750 Australian new-car intenders (those who plan to buy within 12 months).

The research was conducted to understand the impact of stock shortages on car buyers and intenders and explore the opportunities this may present to OEMs. 

In addition, CarsGuide also conducted its “Used car purchase triggers survey’” in June 2022 which surveyed over 750 Australians, both buyers and intenders.

By Neil Dowling