Automotive Industry Survey – Millennials’ Technology Preferences May 2010

1. Automotive Industry Survey – Millennials’ Technology Preferences May 2010

2. Introduction This research was designed to understand how Millennials feel about the technology features and options offered in cars and how they use technology to research potential cars for purchase. This study also explores Millennials’ attitudes towards technology in the workplace and what they are or are not using. Research Methodology From April 6th – 12th 2010, Wakefield Research conducted 1,149 online interviews among American Millennials (ages 18-29 years old). The margin of error for this study is +/- 2.89 at the 95% confidence level. Margins for sub-audiences are slightly higher.

3. Key Findings • Intimidating Buyer Experience:For the majority of Millennials, buying a car is the most intimidating purchase they can make and many dislike at least one part of the car buying experience. Most commonly, they don’t like relying on sales people to see vehicles, nor the lack of transparency when speaking with the dealer. • Expert Consumers:Millennials see themselves as car experts and conduct thorough research on the vehicles they’re considering. Nearly three in four will know what type, what features and what options they want before they ever step foot in the dealership. • Improving the Dealer/ConsumerRelationship:The majority of Millennials actually would like a relationship with their car dealer. The most direct way to improve the relationship and make the sales process easier is to provide access to information. This enhancement impacts consumer decision. Having access to research and information at a dealership will motivate Millennials to seek out specific locations over others.

4. Key Findings • Leveraging Tech to Bring Consumers Back to the Dealership:Millennials will make additional trips back to the dealerships if it means receiving free software updates for their car’s technology. • High-Tech Cars:Millennials also want the technology in their cars to be as advanced as their smartphones. More than half of these consumers believe that advanced features, such as GPS and a port to plug in their digital music players, should be standard options.

5. Detailed Research Findings

6. Assessing the Dealer/Consumer Relationship

7. Section Summary Buying a car is one of the most intimidating purchases someone can make. For Millennials, negotiating with a dealer can be a difficult process. Millennials are attempting to relieve some of the anxiety associated with the buying process by conducting their own research and deciding on the type of car, features and options they want before stepping into a dealership. They no longer believe that the dealer is the only channel to purchase a vehicle.

8. Buying a Car is Intimidating More than 2 in 3 Millennials believe that buying a car is one of the most intimidating purchases someone can make. Women, in particular, find the experience stressful. 33% disagree 67% agree How strongly do you agree or disagree with the following statement – buying a car is one of the most intimidating purchases someone can make.

9. Millennials Prefer a Dentist to a Car Salesman Today’s car buying process is something that many consumers dread. More than half of Millennials feel that negotiating with a car salesman is more painful than going to the dentist. Which of the following is more painful?

10. Dealerships Make the Buying Process Harder Millennials view dealerships as more of an obstacle than a benefit. Seven in ten consumers, and especially women, feel dealerships are making the purchasing process harder than it should be. 70% saying harder 30% saying easier When it comes to buying a car, do car dealerships generally make that process harder or easier?

11. Millennials Spending the Time to Research Millennials are arming themselves with information before buying. On average, they spend 16 hours seeking out information before entering into the car buying process. The last time you purchased a car, approximately how many hours of research did you do, if any, before making the purchase?

12. Decisions All Made Pre-Dealership Visit After two full workdays of research, nearly 3 in 4 have identified which car, features and options they want before they ever step foot into a dealership. 25% saying disagree 74% saying agree How strongly do you agree or disagree with the following statement – I’ve already made my decision on the car model, features, and options I want to buy even before I step into a dealership.

13. I Am the Car “Expert” As a result of hours of research, Millennials identify themselves as car “experts.” More than half believe they are as much of an expert on the specific model they hope to buy as the dealers in the showroom. 42% saying disagree 58% saying agree How strongly do you agree or disagree with the following statement – with all the research I do on my own before stepping into a dealership, I am just as much of an “expert” on some models and features as the dealers at the showrooms.

14. Improve the Purchasing Process

15. Section Summary Millennials are frustrated with the sales process – particularly the secrecy and lack of access to information once they get into the dealership. Providing access to information makes this process easier for them. Offering special services, such as a computer to get research online while in the dealership, will motivate Millennials to seek out specific locations.

16. Frustrations with the Sales Process It starts with the sales process. Nearly 9 in 10 (85%) say they dislike at least one part of the car buying process. Relying on sales people to show them a particular vehicle is the biggest frustration. This is followed by issues with secrecy – not being able to see the dealer’s computer screen and not having access to private conversations between the dealer and manager caused strife as well. Which of the following do you dislike about the sales process when buying a car?

17. Opportunity to Improve the Relationship There is hope that relations can be improved. The majority of Millennials want to establish a real relationship with their car dealer. This presents an opportunity for car dealers to connect with receptive Millennials. 34% saying disagree 67% saying agree How strongly do you agree or disagree with the following statement – it is important to establish a real relationship with my dealer when buying a car.

18. Millennials Want Transparency & Fairness To improve the dealer/consumer relationship, focus on what is most important to consumers – access to information. Having convenient access to the internet during the buying process will make the whole experience more transparent and fair for Millennials. 16% saying disagree 84% saying agree How strongly do you agree or disagree with the following statement – having convenient internet access in the dealership during the buying process would make things seem more transparent and more fair.

19. Provide Access & Info to Make Buying Process Easier Access to information – in any form – is key. Having access to research conducted while at the car dealer’s desk and access to the internet will help reduce the anxiety of buying a car for Millennials. Which of the following, if any, would make buying a car easier or more enjoyable?

20. Offer Special Services to Draw In Millennials Offering access to special services will also motivate visitation. Millennials are willing to seek out a specific dealership if certain services, such as online access and self touch devices that lead them through the buying process, are available at a specific dealer. How likely would you be to search out a specific car dealership if you knew that it had the following tool available to its customers – …?

21. Special Services Do Entice Visitation Millennials are willing to travelfarther if special services are offered at specific locations. Three in four say they would be likely to do so. Yes No Would you be willing to travel further to visit a dealership that offered these specific services?

22. Modern Technological Options a Must in Cars

23. Section Summary Millennials want high-tech cars. They think the technology in their vehicles should be as advanced as their cellphones. This desire can be leveraged to bring them back into dealerships more regularly. For example, Millennials are willing to come back in if additional software updates are available for their cars.

24. Technology in Cars Needs to Be Advanced Access to information and technology continue to be a key part of the solution even after the purchase process. The majority of Millennials believe the technology in their cars should be as advanced as a smartphone. Which of the following devices best represents the state of the technology, you’ll find in most cars today? Would you say that technology is most like…?

25. GPS - The New “Standard” Option GPS is King. More than two in three Millennials want GPS as a standard option in their next car. More than half prefer a port to plug in their portable music player. Interestingly, software that tracks fuel consumption ranks as the third most desirable standard option. Which of the following, if any, do you feel should be offered as a standard option on your next car?

26. Millennials Will Make Additional Trips to a Dealership Leverage the love Millennials have for technology and draw them back into dealerships more regularly by offering free software updates for their car’s technology – such as GPS upgrades. The majority will go back for an additional visit if this software is offered. 19% saying no 81% saying yes Would you be willing to make one additional visit per year to your car dealership if it meant you received free software updates to your car’s technology – such as GPS?

27. Millennials Will Pay for Car Apps Millennials are open to paying for new car software and applications. They are willing to pay on an individual basis – allowing them the freedom to select which apps or features they want and when to upgrade. Nearly as many would just prefer to pay a one time lump sum for unlimited access. Which of the following would you prefer – when purchasing a car?