2010 dealer survey: online wholesale used car buying & shipping

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1 A Union Pacific Company 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping March 8, 2010

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The 2010 Dealer Survey illustrates why online sales are important for the auto industry. Http://www.shipcarsnow.com

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Page 1: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

2010 Dealer Survey: Online

Wholesale Used Car Buying & Shipping

March 8, 2010

Page 2: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

2A Union Pacific Company

Why is Auto Transportation Important to Online Sales? Cars are everywhere!

Wholesale used car trading is growing rapidly on the web…

• Upstream, simulcast, 24x7 online • Online Auctions are becoming global markets

… oddly in many cases, shipping has been left to online buyers to sort out

• Even with upstream sales…cars must transfer from seller to buyer

• Online buyers can not ignore transportation so they limit their buying zone

Auto Transportation is the silent engine behind the explosion of e-commerce

• People buy online because it’s easy and they get delivery direct to their home

• Convenience factor doesn’t yet exist in used car market

Online trading fulfills its potential when both buying and shipping are made easy

Page 3: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

3A Union Pacific Company

• Survey sent to 5,853 dealers in January 2010 via rental of Automotive News email list

• 169 responses, 3% response rate

• Median dealer bought 30% of total used inventory online

• 41% dealers sell 500-1000 new/used cars per year

• 90% Franchised 10%Independent

2010 Dealer Survey - Demographics

0 - 100 101 - 500 501 - 1000 1000 - 2000 2000+0%

10%

20%

30%

40%

50%

60%

19%

57%

19%

4% 2%

48%

40%

8%4%

Used Vehicle Purchases

2010

2009

Annual Volume of Used Vehicles Purchased Wholesale

% D

eale

rs R

esp

on

din

g

Page 4: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

4A Union Pacific Company

2010 Dealer Survey - Results

• Why dealers buy online– Saves time & expense– It’s easy– Better inventory selection available

• How far away will dealers buy online?– 27.2% I shop locally within 200 miles (60% in 2009)– 47.8% I shop regionally within 500 miles (30% in 2009)– 25.0% I shop nationwide (10% in 2009)

• Dealers who buy w/in 200-500 miles asked: what factors discourage buying farther away?– 54.0% Transportation concerns– 30.0% Inventory needs met locally– 14.0% Concern with vehicle condition reports– 2.0% Other reasons

Page 5: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

5A Union Pacific Company

2010 Dealer Survey - Results

• What dealers say about auto transportation– 64.2% want options. Let me choose between expedited delivery or

lowest cost– 18.4% I want lowest cost delivery. – 17.4% Speed is all that matters. I’ll pay more for faster delivery.

• If Internet Auctions offered integrated shipping, would you buy more online? – 67.4% of dealers surveyed said yes (vs 88% in 2009)

Comment: Online shipping of vehicles has gotten easier. Some Internet auctions now offer shipping links and there are more auto transportation web sites.

• Dealer comments about online trading:– “It seems arbitration is further complicated with greater distance” – “I would be more comfortable with the transaction [if it were integrated].”

Page 6: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

6A Union Pacific Company

2010 Dealer Survey – Outlook

• 42% of wholesale cars sourced online 2010 vs 39% in 2009 - trending upward

Expect to buy more

About the same

Less

0 0.1 0.2 0.3 0.4 0.5 0.6

50%

45%

5%

Outlook for 2010 Online Purchases

• Of those purchasing same or less in 2010, reasons included:

– Weak economy/sales– Good local supply– Easier to buy locally

Page 7: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

7A Union Pacific Company

ShipCarsNow = Nationwide Delivery Network Using All Transport Modes

Hawaii

Alaska

Puerto Rico and US Virgin Islands

• Rail, truck & vessel connecting all U.S. major markets

• Truck for regional moves; fuel-efficient rail for longer distance shipments

• Co-loading of new and used cars makes rail more accessible

• More options, more capacity, better value

• Easy-to-use; fully transactional onlinewww.ShipCarsNow.com

Union PacificNorfolk SouthernCSX

Page 8: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

8A Union Pacific Company

2010 Dealer Survey - Summary

• In other areas of e-commerce, location of the product is generally irrelevant to the online buyer … but when dealers buy used cars online, they often have to worry about shipping and where the cars are located.

• It doesn’t have to be that way. ShipCarsNow offers both expedited truck and lower cost rail shipping options.

• Dealers surveyed said they would buy more if buying and shipping are more integrated online.

• Dealers, just like other consumers, want shipping options– Speedy delivery to protect a customer order– Low cost delivery to fill inventory needs while protecting the bottom line

Page 9: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

9A Union Pacific Company

Resources for Used Car Data

• 2009 Market Report, Mid-Year Edition, Manheim Consulting

• PULSE, Latest Economic Indicators, 2009 Mid-Year Recap, Adesa

• US Light Vehicle Outlook, IHS Global Insight, presentation to ShipCarsNow/Union Pacific 1/20/2010

• AutoRemarketing Magazine

• Used Car News Magazine

Page 10: 2010 Dealer Survey: Online Wholesale Used Car Buying & Shipping

10A Union Pacific Company

About

• We are a Union Pacific Company – Trusted name & leader in transportation– Delivering over 6 million cars annually

• We deliver autos nationwide– Speedy truck delivery– Economical and green rail options

• We make it easy to ship cars!– Easy-to-use, no hassle, online

www.shipcarsnow.com– One call, we do it all 1-866-207-3360