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GOOGLE searches in auto-related categories have shown a positive increase in buying new cars, commercials and in buying used cars with some search terms ahead of searches this time last year by as much 45 percent in recent weeks.

This positive trend ties in with data published recently in GoAutoNews Premium which showed that traffic to auto classified and car research websites like Gumtree Cars, Autotrader, CarsGuide and Carsales is running at record levels.

What is surprising to observers of the Google search data is that there is more interest in buying motor vehicles right now than there was in the first half of 2019 when demand was unaffected by the pandemic.

Across the ditch was also firm. In New Zealand, search terms grouped under cars and trucks were up 23 per cent and searches grouped as commercials were also up 23 per cent.

The latest data is relevant to June 18.

Industry Head and Melbourne site lead at Google Australia, Sean McDonell, told GoAutoNews Premium that in Australia interest in all auto-related search terms – effectively the total market – in the seven days to June 18 was up 42 per cent over the same seven days a year ago.

“Up until mid-March, the year-on-year searches had been above those of 2019. Obviously with COVID-19 hitting mid-March, much like the rest of the economy, we saw a dip in searches and the 2020 number dipped below 2019.

Sean McDonell

“However, by mid-April consumer demand and searches begin to increase. That increase has continued since mid-April and is now up 42 per cent year-on-year.

“The June 30 end-of-financial year period plays a role, while the drop on demand in March and April would suggest demand may have been pent up and, with social easing, we are seeing consumers come back into the market,” Mr McDonell said.

Peeling back a layer, the data shows the popular SUV and luxury vehicles markets were also up.

SUVs were up 29 per cent over the same period last year and searches for luxury vehicles were up 27 per cent over the same time in 2019.

“Interestingly, for both SUVs and luxury vehicles, the dip in mid-March was more significant than it was for cars and trucks as a category so the rebound has come from a larger decline,” Mr McDonell said.

“We also saw that SUVs and luxury vehicles recovered a lot faster and very quickly surpassed prior-year SUVs and luxury searches although we saw those looking for a luxury vehicle were certainly back into the market a little bit quicker than those looking for an SUV.”

Mr McDonell said that this trend tied in with companion Google research of 400 consumers on factors influencing their decision-making on a purchase of a vehicle. The research showed that: 37 per cent of respondents agreed that the pandemic influenced their decision, with 29 percent stating that economic or personal finance uncertainty was a factor.

“So the financial side was certainly paying a big role,” he said.

Searches for utes was up 11 percent but is shadowing 2019 more closely than other search categories.

“The other hypothesis is that the trade businesses have been reasonably consistent through this period and largely unaffected by the virus so demand has remained consistent and a bit more like business as usual,” he said

Used vehicle searches were up 39 percent year-on-year in the last seven days and this ties into people’s views on future transportation.

“The hypothesis here is that more people are thinking about a vehicle for private use instead of public transport.

Mr McDonell said a COVID-19 Community Mobility Report, based on aggregated data from Google Maps that indicates the places people are gathering showed that visits to supermarkets and pharmacies have remained relatively constant throughout the pandemic but, by contrast, use of public transport was down about 40 per cent and that has been consistent from May through to June.

“That illustrates that while people are still going to supermarkets and pharmacies, people are still shying away from public transport.

“It highlights that public transport is something the public are continuing to avoid and that correlates with this used car search trend that we are seeing,” Mr McDonell said

Searches for vehicle deals, where buyers are searching for some sort of financial offer like end-of-year special deal, and interest payment special offer, special service or warranty offer etc, were up 38 percent year-on-year and up five percent in the past week alone.

Google said that this trend tied into a question it asked in the 400-person survey (mentioned above) about which type of finance deals or finance option would be the most likely to make a buyer purchase a vehicle sooner than planned; 35 per cent said cash discounts or incentives.

“As any dealer will tell you, price and a deal has always been a key driver for a purchase. Second at 28 per cent was a maintenance, longer warranty or service incentive from the dealer.”

Mr McDonell said that a search trend Google will be watching is road trips within Australia because recreation and holiday options are going to be concentrated within Australia with overseas travel somewhat out of the question. Searches for ‘caravans’ are 69 percent up over the last 7 days compared with the same week last year.

“There will also probably be fewer people flying interstate so they are going to be jumping into their personal transport to take a trip.

“At the moment that activity is down 16 per cent but there is a great opportunity for the OEMs and the dealers to think about how they get people back into the dealership to upgrade from the sedan to the SUV or the 4×4 because all of a sudden they are going to be taking a trip with the family, locally.

Referring to New Zealand, Mr McDonell said that NZ was a little ahead of Australia in terms of recovery.

“You can see that 23 per cent up year-on-year is strong. It has been consistent in the past few weeks but I think we are starting to see that flatten out as New Zealand starts to return to normal.”

 

By John Mellor

KPMG
VACC
Schmick