Edmunds.com Illustrates Car-Buyer "Substitution Effect"

Edmunds.com Illustrates Car-Buyer "Substitution Effect"

Edmunds.com Illustrates Car-Buyer "Substitution Effect"

SANTA MONICA, Calif. — September 9, 2010 — Edmunds.com, the premier resource for automotive information, sees significant evidence that the recession has generated an interesting "substitution effect" for car-buyers.

Former new-car shoppers are now turning to used cars.
Before the recession took hold, it was rare for Edmunds.com site visitors to view more information on used cars than new cars — and when it did happen, the average difference was just over seven percent. However, in August of 2008 used car "page views" outpaced new car "page views" by 40 percent and have outpaced them ever since by an average of 36 percent.

Former luxury car buyers are now turning to non-luxury cars.
From 2006 to 2009, luxury brands represented 4.6 percent of the vehicles traded in for a Ford Taurus. The redesigned 2010 Ford Taurus nearly tripled the penetration of luxury trade-ins to 12.6 percent.

"Ford's effort to move the Taurus upmarket with the 2010 redesign was clearly successful, and in part the company must attribute that to the timing of the launch," commented Edmunds.com Senior Analyst Karl Brauer in his full report at http://www.autoobserver.com/2010/09/the-substitution-effect-new-and-premium-cars-lose-share.html. "It's obvious that many luxury buyers found the new model a suitable substitute for their premium vehicles at a much more recession-friendly price."

Similarly, luxury brands represented 3.5 percent of the vehicles traded in for new Hyundai and Kia models in the 2006 model year. Today, those luxury brands represent 6.2 percent of trade-ins for 2011 model year Hyundai and Kia vehicles.

"Ford, Hyundai and Kia have made a concerted effort to upgrade their vehicles, and it's working well for them as today's car-shoppers appreciate the opportunity to have a near-luxury experience at a lower price," reported Edmunds.com Senior Analyst Karl Brauer. "People are now more open to considering a decent product at a bargain rather than buy the traditionally more expensive brand name. The midsize sedan segment now delivers an experience that is satisfying to a more spoiled audience. And, in many cases the new cars are being loaded with features to which the traditional luxury buyer has become accustomed, which means more profit for those automakers and dealers who sell them."

About Edmunds (http://www.edmunds.com/about/)
Edmunds.com publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. CarSpace is the most established automotive social networking Web site. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.

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