Ramsey, NJ (PRWEB) February 17, 2014
Despite the robust performance of new vehicle sales over the last few months, a recent decline in purchase intent and the deluge of bad weather occurring throughout the nation this winter are likely to slow down momentum in auto sales for the near future, according to this month’s reading of the TechnoMetrica Auto Demand Index. TechnoMetrica also expects that the persistent pessimism among consumers will have a negative effect on new car sales.
February posted a significant decline in the ADI, as the Index decreased by eight points to a reading of 80. With this sudden 9% slide from the previous month, we anticipate a drop in auto sales for the coming months.
TechnoMetrica Market Intelligence developed the Auto Demand Index, a monthly survey of American adults from around the country, as a way to measure the purchase intent of consumers regarding their likelihood of buying or leasing a new vehicle within the next six months. We compute the Auto Demand Index based on responses to the question: How likely is it that you will buy or lease a new vehicle within the next 6 months?
After achieving a fourteen-month high in January, the ADI fell to its lowest level since September 2013 this month. Additionally, February’s Index level is only one point above the 12-month average of 79. A number of variables have contributed to this downturn in purchase intent, including the hard economic conditions faced by today’s consumers, and the perpetually high gas prices that continue to leave dents in drivers’ wallets. The recent onslaught of bad weather occurring throughout the nation has also had an impact on purchase intent, and has already led to a drop in auto sales last month.
The share of Americans who said they would likely purchase a new vehicle in the near future also declined slightly. In February, the share of likely buyers was 13%, a two point drop from the previous month.
TechnoMetrica also conducts a monthly survey on consumer confidence, published as the Investor’s Business Daily/TIPP Economic Optimism Index. According to our analysis of February’s results, American consumers remain pessimistic about the state of the nation’s economy. The Index level decreased slightly to 44.9, a 0.3 drop from January’s reading of 45.2. The Economic Optimism Index has now registered a reading in negative territory (below the neutral level of 50) for sixteen straight months.
“As pessimism regarding economic conditions continues to linger among consumers, and as the fierce winter weather bears down on much of the nation, we expect new vehicle sales will also be hit and decline for the coming months,” says Tom Westervelt, an auto analyst with TechnoMetrica Market Intelligence.
Along with purchase intent, the Auto Demand Index survey also questions buyers on the brand of vehicle they would be most likely to purchase. In February, Ford maintained its position as the number one choice among consumers, with a share of 20%. Chevrolet moved into second place this month, as preference for the brand among likely buyers increased four points to 13%. Brands Honda and Toyota were both chosen by 11% of consumers, while similar shares of likely buyers (5%) preferred GMC and Dodge.
When asked about the type of vehicle they would be likely to purchase, consumers named mid-size vehicles as their top choice, with a share of 28% of likely buyers. However, the percentage of likely buyers who chose mid-size vehicles as their preferred type declined seven points from last month’s reading. An equal percentage of consumers (14%) reported that they would be likely to purchase pick-up trucks and compact vehicles.
Concerning demographics, Midwestern car owners recorded the greatest increase in intention to acquire a new vehicle, growing 24 points from last month to a score of 103. Meanwhile, purchase intent among 18-24 year olds continues to decline, positing the largest drop among the demographics over the past three months. Southern vehicle owners also experienced a sharp fall in purchase intent during the same period.
Each month, TechnoMetrica uses Random Digit Dial telephone methodology to conduct live interviews with more than 900 respondents, using both landlines and cell phones. The margin of error for the survey is +/- 3.3 percentage points. Additionally, recent statistical analysis has shown a strong correlation between the Auto Demand Index and actual U.S. vehicle sales. The correlation is 0.76.
About TechnoMetrica Market Intelligence:
TechnoMetrica Market Intelligence Inc. is a progressive full-service research firm established in 1992. The firm, headquartered in Ramsey, New Jersey provides both quantitative and qualitative solutions to the business and government markets. TechnoMetrica has been providing innovative research solutions to many of the world’s most respected automotive brands for over a decade. In partnership with Investor’s Business Daily, TechnoMetrica conducts IBD/TIPP polls, including the nationally-recognized IBD/TIPP Economic Optimism Index. IBD/TIPP was the most accurate pollster in the 2008 and 2004 presidential elections, according to final FEC-certified results of those elections. TIPP is also the polling partner of The Christian Science Monitor and the Monitor/TIPP polls regularly appear in the paper.
Note to Editors:
Users of these statistics should attribute credit and source to TechnoMetrica as this research is proprietary. To review the entire TIPP Auto Demand Index for 2013 visit: http://www.tipponline.com.