Prosper Insights & Analytics, an Ohio-based provider of “consumer intent” data serving the financial services, marketing technology, and retail industries, has issued its January Consumer Intentions & Actions data. The takeaway: 2020 is off to a good start. Its January consumer survey shows consumer confidence in the economy is up, both year over year and month over month.
The percentage of respondents who categorize themselves as confident/very confident grew from 56.5 percent in the December 2019 survey to 57.1 percent in the current survey. Both these numbers compare favorably to January 2019, when a percentage just south of 49 was recorded.
The report paints a positive picture of consumer sentiment. How will this confidence spur consumers to action? Prosper provides some insight by measuring shoppers’ focus on just what they need as opposed to what they want. In this regard, we might remind ourselves that for most consumers a professional car wash is a discretionary expenditure. The current survey found that 38.7 percent of respondents focused on need compared to 38.6 percent who did so in January 2019, which shows some consistency. That the percentage for December 2019 stood at 34.7 might be explained by Holiday shopping when most consumers tend to loosen the purse strings some.
Prosper also surveyed consumers on their planned purchases. This, too, produced good news: year over year, plans to buy a home and vehicles are up, as is intended spending on major home improvements and vacation travel. Those with vehicle-purchase plans grew from 17.5 percent last year to 22 percent currently. The top three brands respondents were considering were BMW (11.6 percent), Honda (11.2 percent), and Toyota (10.7 percent). These choices are interesting. All three offer several SUV options, but only Honda and Toyota have a pickup-truck line and Honda’s is a pretty slim one.
Jato Dynamics Ltd, a London UK-based provider of auto data, issued an analysis of the U.S. truck market in December 2019 in which it declares that American loyalty to pickup trucks remains strong despite price increases. This is a loyalty uniquely American. Jato points out that in the United States, from 2010 through 2019, pickup trucks accounted for 14.6 percent of new vehicle sales, while globally this vehicle type captured only 3.7 percent of the market over the same time period.
“Americans have been able to transform a work vehicle into a fashionable and semi-luxury product that appeals to more consumers than ever before,” says Donald Smith, vice president sales and marketing at Jato. “Despite price increases, consumers are willing to pay more if the offer is in appealing subsectors — such as trucks and SUVs — and continues to be upgraded with new applications and accessories.”
This assessment is echoed in a report issued last month, by S&P Global Ratings that refers to the higher profits automakers earn on SUV and truck sales. The firm expects significant new product launches in this category despite rising gas prices. It believes that this, together with improved fuel efficiency, higher perceived safety, and steady incentives will have automakers stick to their current product mix in favor of trucks and SUVs.
So prepare the tunnel to welcome — or continue to welcome — more, larger vehicles, more vertical back ends, more rear window wipers, more empty truck beds.