Acxiom (NASDAQ:ACXM)
Historical Stock Chart
From Oct 2019 to Oct 2024
As U.S. automakers continue to cut production aggressively amid rising
gasoline prices, a weakening economy and a rapid shift in demand away
from trucks and SUVs, it’s no surprise that
consumers are reconsidering their choices for transportation. However,
an Acxiom® Corporation (NASDAQ: ACXM) study
today revealed that although the market scrambles to provide a small-car
answer to the masses in response to the rising price of fuel, actual
vehicle purchase propensities show that not all consumers are ready to
trade in their current vehicles for small cars. In fact, Acxiom found
that more than 80 percent of consumers who are currently in the market
to buy a car are not planning to defer their next purchase.
This month’s Acxiom Automotive Consumer
Dynamics study focuses on 130 million consumer households that are
feeling the lifestyle impact of higher fuel costs and the behaviors that
are driving them to down-size (moving into a vehicle segment which
requires lifestyle changes), to right-size (moving to a vehicle with
better fuel efficiency without sacrificing lifestyle utility), or to
wait (deciding not to change vehicles at this time). Top findings
include:
Americans have reached their “tipping
point”: More than 62 percent of
consumers with household incomes under $50,000 changed their lifestyle
behaviors when fuel hit $3 - $4 per gallon, while fewer than 47
percent of those in the $100,000 household income bracket made
changes. Overall, only 13 percent of all consumers stated they would
not alter their lifestyles even if fuel reaches between $4 to $5 per
gallon.
MPG Moved Consumers In June: In June, and for the first time in
2008, “needing better gas mileage”
was the number one new-vehicle purchase motivator, jumping over 20%
from May and over 41% since March.
Lifestyle Changes at All Income Levels: For higher income
households, there is a tendency for automotive consumers to “go
green” as a status symbol for responsible
living. At the low-income levels, consumers’
needs are supplanting their wants, as they consider car pooling and
various forms of public transportation for their day-to-day commutes,
passing over the small car segment entirely. Additionally, deferring
auto purchases ranked last of planned lifestyle changes across all
income ranges.
Short-Term Spending Cuts Equal Long-Term Vehicle Retention:
Consumers appear to be making short-term cuts in their discretionary
spending; reducing the times they dine out, take vacations or buy
clothes to accommodate their transportation and auto purchasing
decisions.
“It’s undeniable
that consumers are making lifestyle adjustments to compensate for the
high cost of transportation, but what’s
interesting is that far fewer of them are doing anything about their
vehicle purchase intentions,” said Acxiom
Automotive Executive Tim Longnecker. “This
study clearly illustrates that while the perception is that consumers
are rushing to buy small cars, the reality is that many consumers are
merely right-sizing, not down-sizing, their vehicle choices.”
The Right-Sizers
Acxiom found right-sizing consumers to be those characterized as Upper
Rung City, comprising mostly wealthy people living in major
metro areas, or Rich and Retired. They are willing to
reconsider their next new vehicle purchase, but they are not yet willing
to give up the freedom and versatility they currently enjoy. Their
relatively high fuel-price tipping points allow them to do most of what
they’ve always done without compromising
their lifestyles. For those who are choosing to “go
smaller” (e.g., midsize cars, CUVs and
high-end small cars), compromising on comfort and features afforded by
their current vehicle is not an option.
Wide Open Spaces consumers are right-sizing as well, but only out
of necessity. Identified as the traditional pickup consumer represented
by individuals who live in rural areas and/or use a pickup primarily for
its utility function, they are some of those hardest hit by high fuel
prices since they travel long distances for both work and play. However,
they also are among the largest proportion of consumers who need and buy
trucks, which is why some in this group are finding CUVs and large cars
as viable options. Additionally, Wide Open Spaces consumers
increased their affinity for seven of nine compact cars included in the
study.
The Down-Sizers
Acxiom found that Upper Rung Suburban and Married with Children
consumers characterized by upper-middle income families who are busy
raising and catering to the varying needs of their growing families,
have the money to weather most economic storms. However, their endurance
is wearing thin. As keepers of the “family
taxi” their tipping point is more of a
compound equation of cost multiplied by distance. The higher fuel prices
go, the more they become prime luxury mid-size or small-car candidates.
Similarly, Working for a Living consumers live for the monthly
budget figure. It’s no surprise that their
fuel-price tipping point was among the lowest of any consumer group,
which is why those at the end of their leases are gravitating to the
familiar brands or those they perceive as small-car specialists.
Willing to Wait
Acxiom also found that a number of Americans are in a wait-and-see mode
rather than one of down-sizing or right-sizing. This group includes the Urban
Marrieds, characterized by consumers with dual incomes ranging from
middle to middle-upper, most of whom are married without children and
enjoy spending money on their busy lifestyles. They have shorter
distances to drive are more willing to take a wait and see approach to
down-sizing.
Despite the high percentage of consumers who said they were changing
their driving habits, Acxiom found that compact cars still under-indexed
or indexed neutral among Upper Rung City, Married with Children
and Wide Open Spaces consumers. When specific nameplates enter
the picture, no clear winners emerged. Only one vehicle, Mazda3,
over-indexed for Upper Rung City, while only two vehicles, Dodge
Caliber and Chevrolet Cobalt, over-indexed for Wide Open Spaces
consumers. No vehicle over-indexed in either 2007 or 2008 for Married
with Children consumers.
“While increasing small-car production
is in the strategic plans of many automotive manufacturers, it is clear
that consumers are making lifestyle choices and purchase decisions far
more complex than simply a rush to small,”
Longnecker said. “The silver lining for
manufacturers and marketers is that they don’t
have to wait for retooling efforts to reach their target consumers.”
This is the fifth in an ongoing series of monthly consumer-centric
studies of the North American automotive industry entitled Automotive
Consumer Dynamics. To download a copy of the study, or to subscribe
to receive future editions, please visit www.acxiom.com/automotive
(no registration required).
Automotive Consumer Dynamics is powered by Acxiom’s
InfoBase-X™, the largest, most accurate,
comprehensive and multi-sourced data collection of U.S. consumer
information in one source. PersonicX® is
Acxiom’s household-level segmentation suite
that places U.S. households into one of 70 distinct segments and 21
life-stage groups based upon specific consumer behavior and demographic
characteristics.
About Automotive Consumer Dynamics
Automotive Consumer Dynamics differs from other studies and
analyses available to the industry in that it focuses on all U.S.
consumers versus a sample, is prospective (what specific vehicles
consumers intend to purchase next) versus historical (what aggregate
consumers purchased last), and the findings are immediately actionable
by automotive marketers because they pertain to specific individuals and
households of interest.
Automotive Consumer Dynamics categorizes all U.S. automotive
consumers into 10 consumer groups by combining the attitudes, behaviors,
intentions, and current vehicle ownership of vehicle buyers across the
country. The study offers predictive, timely information that can
improve automotive marketing effectiveness and overall business
performance dramatically through more timely and targeted communications
to key prospects.
About Acxiom
The global leader in interactive marketing services, Acxiom connects
clients with their customers through deep consumer insight, powering
effective and profitable marketing initiatives and business decisions.
Our consultative approach spans multiple industries and incorporates
decades of experience in consumer data and analytics, information
technology, data integration, and consulting solutions for effective
marketing across digital, Internet, email, mobile and direct mail
channels. Founded in 1969, Acxiom is headquartered in Little Rock, Ark.,
and serves clients around the world from locations in the United States,
Europe, and the Asia-Pacific. For more information about Acxiom, visit www.acxiom.com.
Automotive
The world’s leading automakers, distributors,
retail groups, financial institutions and other companies within the
global automotive industry rely on Acxiom to provide an unparalleled
combination of consumer insights, digital solutions, multi-channel
marketing expertise, analytics and technology, to empower them to become
more consumer-centric and faster-to-market. Delivered with an integrated
consultative approach, we provide superior business value and ROI for
our clients worldwide.
Acxiom is a registered trademark of Acxiom Corporation.