Interest in Compacts Up Sharply; Will Sales Follow?
The compact car segment has shown significant growth in terms of online shopper interest over the spring and summer, but this hasn’t translated into higher sales, according to Jumpstart Automotive Group.
The company suggested that this trend points to pent-up demand for compacts, meaning end-of-year sales could be strong for this segment.
More specifically, the proportion of shopping traffic on Jumpstart sites claimed by compacts has shown a 12-percent gain, on average, for each month from April to August compared to the year-to-date average, officials noted.
From April 2009 through August 2009, compacts increased their share by just 23 percent for the entire five-month period.
Additionally, looking at last month in particular, the compact segment’s share of traffic in August was 87 percent stronger than it was in January. Officials pointed out that compacts have been the only category to post any “significant” gains in year-to-date shopping traffic share.
However, despite the uptick in the number of shoppers looking at compacts, there hasn’t been the same kind of lift in the number of consumers actually buying compacts, said Joe Kyriakoza, Jumpstart’s vice president of marketing communications and insight.
“While we’re seeing significant compact share of shopping growth, actual sales share has been flat or down all year,” said Kyriakoza. “This starts to allude to the potential of pent-up demand in the segment.”
Should this boosted demand lead to actual sales, Kyriakoza suggested that compacts could grab significantly greater share of the market’s sales.
Listing some causes for this demand hike for compacts, he pointed to greater variety of vehicles in the segment, more robust marketing, CAFE standards and the efforts by automakers to pump more money into these vehicles, which has resulted in more attractive compacts.
“In a very irregular economy it’s difficult to tell, but all signs point to the compact segment representing a larger share of the sales pie in the coming months,” Kyriakoza stated. “If trends stay true to historic patterns, the growing interest in compacts during the past four months should lead to an uptick in sales for the remainder of the year.”
Kyriakoza went on to note that the Big 3 is making some headway in the compact arena as far as generating some consumer interest, despite previously trailing their import rivals.
“Most recently, the Ford Fiesta has set the gold standard for marketing excellence in the category,” Kyriakoza pointed out.
“Through the company’s Fiesta Movement program, Ford turned to consumers to drive the inclusion of many of the vehicle’s bells and whistles,” he added. “As a result, Ford is enjoying a powerful opening into the compact market with its 2011 models recently hitting dealerships with tremendous momentum.”
Officials said this momentum has pushed the Fiesta to considerable gains in consumer interest in the last eight months. In July, for instance, interest in the Fiesta climbed 65 percent compared to the year-to-date average, and in August, it jumped 30 percent.
Moreover, during July, the Fiesta was researched more than any other vehicle — compact or otherwise — on Jumpstart sites.
Kyriakoza added that the Fiesta has practically raised interest in subcompacts all by itself. Moreover, the Fiesta is ahead of what have traditionally been the top models in the subcompact category: the Toyota Yaris, Nissan Versa and Honda Fit.
Although they have not shown the same growth rate as newcomers such as the Fiesta, Kia Soul, Nissan Cube or the recently rolled out revamped Volkswagen Jetta, officials said the Honda Civic and Toyota Corolla remain on top of the compact segment when it comes to generating shopper interest — they are Nos. 1 and 2, respectively.