10/07/08

A new survey conducted by Survey.com on behalf of Autobytel reveals some depressing facts about the state of the automotive industry in the current down market.

56 percent of dealers report that new vehicle sales this year have decreased from 2007. Domestic dealers have been harder hit than import dealers – 73 percent of domestic dealers report that sales are down (vs. “only” 48 percent of import dealers).

The Autobytel survey shows that dealers are increasingly focusing on follow-up and lead conversion, and Internet marketing to stay afloat. 91 percent of dealers report that they are either upping – or standing firm – on their Internet marketing spend despite tighter budgets.

Import dealers are increasing their Internet marketing spend the most while domestic dealers are spending more on the used department as a strategy to remain profitable in the year ahead.

With gas prices hitting record highs in 2008, 9 out 10 dealers have reported an increase in sales of smaller more fuel-efficient vehicles.  When asked whether fuel efficiency has become the number one buying consideration for car shoppers, 55 percent agreed (that breaks down to 58 percent for import dealers and 42 percent for their domestic counterparts).

What’s responsible for all the declining sales? Dealers weighed in on this question too. Some said high gas prices were the cause (38 percent) while 37 percent blamed the credit crisis.

Will the market turn around? Not until at least the second quarter of 2009, say 52 percent of dealers.

The phone survey was conducted between August 25 and September 8.