Category: United States

Inventory Shortages Cause July Sales Pace to Weaken but Demand Drives Average Transaction Price Above $41,000 for First Time

2021-07-28

jillian.breska

The Retail Sales Forecast

New-vehicle retail sales for the month of July are expected to grow from July 2020 but decline from July 2019, according to a joint forecast from JD Power and LMC Automotive. Retail sales of new vehicles this month are expected to reach 1,187,300 units, a 3.7% increase compared with July 2020, but an 8.7% decrease compared with July 2019 when adjusted for selling days. July 2021 has one more selling day than July 2020 and two more selling days than July 2019. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 7.7% over 2020 and a decrease of 1.4% from 2019.

The Total Sales Forecast

Total new-vehicle sales for July 2021, including retail and non-retail transactions, are projected to reach 1,319,300 units, a 2.7% increase from July 2020 but a 12.4% decrease from July 2019 due to the decline of less-profitable non-retail/fleet sales. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 6.7% from 2020 but a decrease of 5.3% from 2019. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 15.0 million units, up 0.4 million units from 2020 but down 1.9 million units from 2019.

The Takeaways
Thomas King, president of the data and analytics division at JD Power:

“Inventory constraints, and its divergent effects on vehicle sales, continues to be the key theme for July. Too few vehicles in inventory mean the sales pace in July is well below the levels seen earlier this year. Conversely, the lack of inventory is driving the price of the vehicles to record highs as manufacturers and retailers continue to dial back discounts. While the quantity of sales is down, the quality of each sale is up, evidenced by the fact that consumers will spend more money buying new vehicles than ever before in the month of July, and dealer profits from selling new vehicles will reach an all-time high.”

Dealers currently have 932,000 vehicles available for retail sale, compared with 3.1 million two years ago and, while new inventory is arriving at dealers daily, it is being sold almost as quickly as it arrives. This month, more than 45% of vehicles will be sold within 10 days of arriving at a dealership, up from 43% in June 2021 and up from only 26% in July 2019. The average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to a record low of 31 days, down from 75 days a year ago, and down 6 days from last month.  

For July 2021, average transaction prices are expected reach an all-time high of $41,044. For context, average transaction prices are trending to be nearly 17% higher in July 2021 than they were in July 2020. This is partially due to the continued retraction in manufacturer incentives. The average manufacturer incentive per vehicle is on pace to be $2,065, a decrease of $2,170 from a year ago and the lowest amount on record for the month of July. Expressed as a percentage of the average vehicle MSRP, incentives for July 2021 are trending toward a record low of 4.8%, down nearly 5.5 percentage points from a year ago, and the first time on record below 5%.

The combination of strong retail volumes and higher prices means that consumers are on track to spend $48.7 billion on new vehicles this month, the highest on record for the month of July.

“Total retailer profit per unit, inclusive of grosses and finance & insurance income, are on pace to reach an all-time high of $4,260, an increase of $2,230 from a year ago and the first time higher than $4,000. Grosses have been above $3,000 for three consecutive months. Coupled with the strong retail sales pace, total aggregate retailer profits from new-vehicle sales are projected to be $5.1 billion, the highest ever on record and up an astonishing 216% from July 2019. July is on track to be the third consecutive month for aggregate retailer profits on new vehicle sales to exceed $4 billion.

“These record-breaking pricing and profitability results continue to be assisted by exceptionally strong used-vehicle prices, which translates into elevated trade in values for consumers. While average transaction prices are trending to be nearly 17% higher this month than in July 2020, the average monthly finance payment is on pace to be up only 6.4%, or $38, to $622 during the same period, aided mostly by average trade-in values trending towards $7,501, an increase of $3,353—or 81%—from a year ago. The low interest rate environment is also helping to moderate monthly payments. The average interest rate for new vehicle loans in July is expected to increase only 4 basis points to 4.24% from 4.20% a year ago, but down 132 basis points from July 2019.

“Looking forward to August, the dynamics observed in July are expected to continue. Inventory levels will not improve meaningfully in August and the sales pace will be depressed as many shoppers fail to find their desired vehicle. However, buyers who do find their desired vehicle will pay higher prices. The silver lining in this environment is that manufacturers and retailers will realize extraordinary profits on every unit that is sold, and in many cases the per-unit profit will more than offset the drop in volume.”

Sales & SAAR Comparison

U.S. New Vehicle	July 20211, 2	June 2021	July 20193
Retail Sales	1,187,241 units (+3.7% higher than June 2020; -8.7% lower than June 2019)2	1,127,900 units	1,204,236 units
Total Sales	1,319,275 units (+2.7% higher than July 2020; -12.4% lower than July 2019)2	1,293,229 units	1,393,771 units
Retail SAAR	13.1 million units	13.5 million units	14.2 million units
Total SAAR	15.0 million units	15.3 million units	16.9 million units

¹ Figures cited for July 2021 are forecasted based on the first 20 selling days of the month.
² July 2021 has 27 selling days, one more than July 2020 and two more than July 2019.
³ July 2019 is displayed to avoid July 2020 pandemic-influenced comparisons.

The Details

• The average new-vehicle retail transaction price in July is expected to reach a record $41,044. The previous high for any month, $39,942, was set in June 2021.
• Average incentive spending per unit in July is expected to fall to $2,065, down from $4,235 in July 2020 and $4,069 in July 2019. Spending as a percentage of the average MSRP is expected to fall to 4.8%, down 5.5 percentage points from July 2020 and down 5.4 percentage points from July 2019.
• Average incentive spending per unit on trucks/SUVs in July is expected to be $2,002, down $2,357 from a year ago and down $2,236 from 2019, while the average spending on cars is expected to be $2,284, down $1,561 from a year ago and down $1,333 from 2019.
• Consumers are on pace to spend $48.7 billion on new vehicles—a record for July—and up $9.9 billion from July 2020 and up $8.8 billion from July 2019.
• Trucks/SUVs are on pace to account for 76.5% of new-vehicle retail sales in July.
• Fleet sales are expected to total 132,000 units in July, down 5.3% from June 2020 and down 35.5% from July 2019 on a selling day adjusted basis. Fleet volume is expected to account for 10% of total light-vehicle sales, down from 11% a year ago.

Observations on the Used Vehicle Market
Jonathan Banks, vice president, Valuations Services:

“Used-vehicle prices remain near a record levels, however, the wholesale market is cooling from its red-hot spring and early summer pace. As a result, wholesale prices are expected to end the month down slightly from June. The decline marks the first time that prices in this channel will move lower since December 2020, and the start of historic seasonal depreciation that typically occurs during late summer and the fall months. Ultimately, inventory shortages of new vehicles continue to help bolster used prices as both consumers and dealers look to fill the gaps. Through the remainder of the year, used prices should continue drifting slightly lower each month—but still hover near all-time highs.”

Global Sales Outlook
Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:

“The ongoing chip shortage cut into the recovery pace of major markets in June as the selling rate stood unchanged from May at 82.9 million units. While the rate was up 4.5 million units from June 2020, growth was below expectations and has flattened out. On a volume basis, global light-vehicle sales were up 6% from June 2020 to 7.0 million units but declined nearly 15% from June 2019. Demand in China and South Korea was sluggish, making these two markets the worst performing major markets. China was down 13% from a year ago and South Korea was down 20%. The United States and Western Europe continue to recover but the effect of chip shortages is taking hold and further constraining volume. Despite an expected selling rate increase to 83.5 million units, global light-vehicle demand in July is expected to post the first year-over-year decline since November 2020 with volume at 6.6 million units.

“Lack of inventory is clearly affecting selling rates in key markets. With no immediate remedy in sight, there’s an increasing risk that the situation will worsen in coming months and put renewed pressure on the post-pandemic recovery. Continued disruption has triggered a more pronounced cut to the 2021 outlook. Global light-vehicle sales are now expected to grow 11%, with volume cut to 86.4 million units for the year, a reduction of 1.0 million units.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Emmie Littlejohn, LMC Automotive; Troy, Mich.; 248-817-2100; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

About LMC Automotive www.lmc-auto.com

 

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Kitchen Cabinet Satisfaction is Highest among Fully Involved Customers, JD Power Finds

2021-07-29

jillian.breska

Kitchen cabinet customer satisfaction is highest when customers shop and buy at a big box store rather than doing so through a dealer, according to the JD Power 2021 U.S. Kitchen Cabinets Satisfaction Study,^SM released today. Additionally, the study finds that the number of consumers doing a home improvement project increased to 61% in 2021, up 26 percentage points from 2020.

“As people are experiencing increased time at home and with the recent stimulus checks, homeowners are seizing the opportunity to take on more home improvement projects,” said Christina Cooley, home intelligence lead at JD Power. “Do-it-yourselfers are clearly taking advantage of having more money to put towards expensive projects like replacing kitchen cabinets. There’s a self-satisfaction when customers are involved in the process from beginning to end.”

Study Ranking

Quality Cabinets ranks highest with a score of 877, SEKTION (IKEA) (872) ranks second and KraftMaid (871) ranks third.

The 2021 U.S. Kitchen Cabinets Satisfaction Study is based on responses from 1,612 customers who purchased cabinets within the previous 12 months. The study was fielded from January through April 2021.

For more information about the U.S. Kitchen Cabinets Satisfaction Study, visit https://www.jdpower.com/business/home/kitchen-cabinets-satisfaction-study

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

Direct Banks Hit by Pandemic Headwinds Continue on Path to Digital Transformation of Retail Banking Industry, JD Power Finds

2021-03-31

jillian.breska

TROY, Mich.: 1 April 2021 — The pandemic-driven consumer shift to digital channels should have created the perfect environment for direct banks to excel, but overall customer satisfaction with branchless banking has declined significantly this year. According to the JD Power 2021 U.S. Direct Banking Satisfaction Study,^SM released today, top-line declines in customer satisfaction are driven primarily by historically low interest rates and a tough economic environment, but several key performance metrics show direct banks are continuing to set the standard for digital transformation in the retail banking sector.

“Direct banks have been showing consistent improvement in customer satisfaction, significantly outperforming traditional retail banks for the past several years,” said John Cabell, director of wealth and lending intelligence at JD Power. “So, it may come as a surprise to see such a sharp decline in overall customer satisfaction this year—at a time when digital banking has prominently been in the spotlight. Digging deeper into the data, the primary drivers of this year-over-year decline are macroeconomic. Looking at the core functionality of direct banks—primarily the digital and mobile channel usage—they continue to set the pace for the industry, but study results also highlight areas where there is room for improvement.”

Following are some key findings of the 2021 study:

• Direct bank satisfaction declines during pandemic: The overall satisfaction for direct banks is 852 (on a 1,000-point scale), down 12 points from last year’s study. Declines are most pronounced among customers who say they are worse off financially than a year ago and those with deposit-only accounts. The top performance attribute driving the decline is competitiveness of rates on checking, savings, CD and money market accounts.
• Increased digital channel traffic exposes some weaknesses: Mobile and online utilization increases significantly, but satisfaction with those channels shows declines. Specific shortcomings include clarity of information; ease of navigation; and appearance of interface. Additionally, customers this year are less likely to say that direct bank websites provide enough information to answer all their questions.
• Pandemic pushes traditional retail bank customers to direct bank priorities: According to data from the JD Power 2021 Retail Banking Study,^SM the percentage of traditional retail bank customers who use online and mobile channels only—with no branch use—increased to 41% from 28% in 2018, setting the stage for continued growth of direct banking.
• Proactive communication of pandemic response drives customer satisfaction: Overall satisfaction scores among customers who feel their direct bank has been completely supporting them by waiving fees during the COVID-19 pandemic, for example, are more than 200 points higher (902) than among those who say they have received no support (701).

Study Ranking

Charles Schwab Bank ranks highest in overall satisfaction for a third consecutive year with a score of 865. Discover Bank (862) ranks second. The industry average is 852.

The U.S. Direct Banking Satisfaction Study, now in its fifth year, measures overall satisfaction with direct banks based on five factors (in order of importance): channel activities; communication; products and fees; new account opening; and problem resolution. The channel activities factor includes five subfactors: website; mobile; assisted online; call center; and IVR. The study is based on responses from 3,212 direct bank customers nationwide and was fielded in December 2020-January 2021.

To learn more about the U.S. Direct Banking Satisfaction Study, visit https://www.jdpower.com/business/resource/us-direct-banking-satisfaction-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

NielsenIQ and JD Power enter strategic alliance to bring unparalleled automotive research to major growth markets

2021-04-22

jillian.breska

NielsenIQ, an industry leader in global measurement, and JD Power, a global leader in data analytics and consumer intelligence, today announced their intent to launch a multinational strategic alliance to bring benchmark automotive customer experience studies and deep auto industry data analysis to major growth markets such as India, Southeast Asia and the Middle East.

Drawing on the strong market presence of NielsenIQ and the deep industry expertise of JD Power, the alliance will feature JD Power benchmark automotive studies, recognized as the gold standard in the automotive industry, complemented by NielsenIQ’s new digital and technology-based platforms and value-added services like social listening analysis.

Combining NielsenIQ and JD Power capabilities will allow automotive sector clients to strategize for the future based on data-driven tools and insights. As the global economy recovers from the pandemic, data-driven decision-making will become more important than ever before. Access to accurate data, analytics and trends in consumer behavior will help decision-makers understand consumers wants and needs, and produce vehicles that are proven to be in demand.

“In today’s agile world, a key vision of NielsenIQ is to create the best alliances that deliver an unmatched value proposition to clients by combining our unique offerings with the best the external world has to offer,” said Prasun Basu, Global Head, Strategic Alliances and New Verticals. “We are thrilled that NielsenIQ and JD Power, two best-in-class trusted global leaders, have come together to offer that outstanding combination of client advisory and market understanding with expertise in the automotive sector through syndication.”

“JD Power data, analytics and benchmark studies are the industry standard for much of the world, and this alliance will allow global OEMs to use one structure for benchmarking and apply it to all the markets where they operate,” said Doug Betts, President of Global Automotive at JD Power. “This will drive efficiency to the structure and organization for improvement of product and service for their customers. NielsenIQ’s strong presence makes it the best possible teammate to bring this service into these markets.”

The NielsenIQ Consumer Insights team, led by Joe Ellis, Global Head of the Automotive, Tech, Telco and Finance verticals, will manage in-market activities, including sales, servicing, data collection and quality control. The integration of NielsenIQ’s local presence, impeccable servicing, and robust on the ground processes with the ingenuity of JD Power’s global approach of benchmarking automotive quality, service and sales will provide transformative data and insights to future-proof clients.

ABOUT NIELSENIQ
NielsenIQ is the leader in providing the most complete, unbiased view of consumer behavior, globally. Powered by a ground-breaking consumer data platform and fueled by rich analytic capabilities, NielsenIQ enables bold, confident decision-making for the world’s leading consumer goods companies and retailers.

Using comprehensive data sets and measuring all transactions equally, NielsenIQ gives clients a forward-looking view into consumer behavior in order to optimize performance across all retail platforms. Our open philosophy on data integration enables the most influential consumer data sets on the planet. NielsenIQ delivers the complete truth.

NielsenIQ, an Advent International portfolio company, has operations in nearly 100 markets, covering more than 90% of the world’s population. For more information, visit www.nielseniq.com

ABOUT JD POWER
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business.

 

Online Brokerage Firms Strain under Weight of New Investor Surge, JD Power Finds

2021-04-26

jillian.breska

With more than 10 million new brokerage accounts opened in 2020 as mainstream investor interest skyrocketed during the pandemic, retail brokerage firms struggled to deliver a seamless customer experience. According to the JD Power 2021 U.S. Self-Directed Investor Satisfaction Study,^SM released today, the number of problems cited by customers doubled during the past year, with website issues, processing and trade execution failures and account statement errors leading the way.

“The significant influx of new investors—and increased trading volumes and overall engagement from clients—clearly put a strain on the system and a spotlight on some of the most critical areas that firms need to address if they want to continue to attract and retain self-service investors,” said Michael Foy, senior director and head of wealth intelligence at JD Power. “With virtually every firm now offering free trading and new investors showing lower levels of brand loyalty, firms that get the customer satisfaction formula right have a chance to set themselves apart from the competition.”

Following are key findings of the 2021 study:

• Frequent glitches sap customer satisfaction: Problem incidence has doubled in the past year, affecting 11% of all do-it-yourself investors and 12% of those in the seeking guidance segment of self-directed investors. The most frequent sources of problems are websites, processing and/or trade execution and account statements. Both overall customer loyalty and customer advocacy have increased significantly among investors who do not experience these problems.
• Robinhood leads in new accounts but struggles to build trust: Robinhood, the easy-to-use, mobile-friendly online brokerage that found itself at the center of the GameStop stock frenzy in January and February of this year, claimed 27% of all new do-it-yourself account openings, more than any other firm in this year’s study. While its market share has grown, its strength in digital channels and value for fees was offset by poor performance on trust, people and problem resolution.
• Investor education remains best resource, but brokerages not delivering: Overall customer satisfaction scores are 148 points higher (on a 1,000-point scale) among do-it-yourself investors and 155 points higher among those seeking guidance when they strongly agree that their brokerage firm provides useful guidance or advice. Despite this significant boost to customer satisfaction, fewer than half of self-directed investors say their firm provides useful guidance or advice.
• Meeting clients’ holistic financial needs: Overall customer satisfaction is highest when investors use four or more products with a wealth management firm, which can include services such as investment accounts, banking relationships and mortgages. Among do-it-yourself investors, satisfaction scores are 103 points higher when investors use four or more products than when they use just one. Among investors seeking guidance, that customer satisfaction differential is 76 points. Besides increasing satisfaction, deepening the client relationship is more critical than ever for firms needing to generate revenue in a free-trading environment.

The U.S. Self-Directed Investor Satisfaction Study, now in its 19^th year, evaluates key satisfaction drivers and firm performance among both investors seeking guidance (those who don’t have a dedicated financial advisor but do have access to interact with a registered investment professional) and true do-it-yourself investors (those who do not interact with professional advisors).

Study Rankings

Vanguard (736) ranks highest in self-directed investor satisfaction among investors seeking guidance. 
T. Rowe Price (705) ranks second and Charles Schwab (702) ranks third.

Vanguard (736) ranks highest in self-directed investor satisfaction among do-it-yourself investors. Charles Schwab (727) ranks second and T. Rowe Price (721) ranks third.

The U.S. Self-Directed Investor Satisfaction Study, which was redesigned for 2021, measures self-directed investors’ satisfaction with their investment firm based on performance in seven factors (in order of importance): trust; digital channels; the ability to manage wealth how and when I want; products and services; value for fees; people; and problem resolution. 

The 2021 study is based on responses from 4,895 investors who make all their investment decisions without the counsel of a full-service dedicated financial advisor. The study was fielded from December 2020 through February 2021.

For more information about the 2021 U.S. Self-Directed Investor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-self-directed-investor-satisfaction-study. 

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

U.S. Retail Banks Nail Transition to Digital during Pandemic, JD Power Finds

2021-04-26

jillian.breska

The nation’s retail banks have successfully navigated an historic transformation in which a record 41% of customers are now digital-only and although 24% of customers say they are worse off financially, overall customer satisfaction has increased. According to the JD Power 2021 U.S. Retail Banking Satisfaction Study,^SM released today, retail bank efforts to increase customer communication, introduce customer relief and community support efforts and deliver strong digital banking services have helped them score high marks for customer satisfaction in a very challenging year.

“If you’re looking for a case study in how to improve engagement and deliver a superior customer experience in the face of massive disruption, look no further than the U.S. retail banking industry’s response to the COVID-19 pandemic,” said Paul McAdam, senior director, banking intelligence at JD Power. “The fact that satisfaction has improved most among customers who say they feel worse off financially speaks volumes to the proactive efforts many banks launched to support their customers in a period of heightened financial stress. Moreover, banks’ ability to deliver consistently through digital channels has helped reassure branch-centric holdouts and ease the large-scale transition to digital-only banking.”

Following are some key findings of the 2021 study:

• Customer satisfaction improves amid flight to digital: Prior to the pandemic, digital-only customers accounted for just 30% of the retail bank customer base, which routinely had the lowest levels of customer satisfaction of any channel. This year, 41% of customers are digital-only and satisfaction improves most among customers who have high levels of digital engagement with banking products and customer service.
• Banks step up efforts to help financially insecure customers: Nearly one-fourth (24%) of retail bank customers say they are worse off financially than they were last year—up from 14% in the 2020 study—and just half of customers say they are satisfied with their current financial condition. Despite the financial setbacks, overall customer satisfaction with retail banks improves this year, led by a significant 21-point gain (on a 1,000-point scale) in satisfaction among those who feel worse off financially.
• Majority of customers believe their bank supported them during pandemic: Nearly two-thirds (63%) of retail bank customers say their banks completely supported them during the pandemic, which drove an 86% increase in likelihood of reusing that bank; a 60-point increase in Net Promoter Score®¹; and a 48% decrease in problems or complaints. Specific bank actions that customers associate with support during the pandemic are waiving charges/fees; supporting the community; offering additional advice/guidance; and providing late payment forgiveness.
• Big banks continue to close gap: Big national banks are on track to surpass regional and midsize banks in overall satisfaction after achieving big gains in customer satisfaction with problem resolution; products and fees; communication and advice; and assisted online service. Midsize banks have historically been the leaders in customer satisfaction, with a 17-point gap in satisfaction vs. big banks as recently as 2018. Today, that gap is just 4 points.

The study measures customer satisfaction with banks in 15 geographic regions. Highest-ranking banks and scores, by region, are as follows:

California: U.S. Bank (818)
Florida: Chase (846)
Illinois: Chase (829)
Lower Midwest Region: BancFirst (871)
Mid-Atlantic Region: Atlantic Union Bank (854)
New England Region: Bangor Savings Bank (861)
North Central Region: Huntington (845)
Northwest Region: Umpqua Bank (830)
New York Tri-State Region: PNC (840)
Pennsylvania: Northwest Bank (834)
South Central Region: Chase (848)
Southeast Region: United Community Bank (884)
Southwest Region: FirstBank (823)
Texas: Frost (861)
Upper Midwest: Associated Bank (823) and Chase (823) in a tie

The U.S. Retail Banking Satisfaction Study, now in its 16^th year, measures satisfaction in six factors (listed in alphabetical order): account opening; communication and advice; channel activities; convenience; problem resolution; and products and fees. Channel activities include seven subfactors (listed in alphabetical order): ATM; assisted online; branch; call center; IVR; mobile; and website.

The study is based on responses from 94,784 retail banking customers of the largest banks in the United States regarding their experiences with their retail bank. It was fielded from April 2020 through February 2021. Big banks are defined as banks with more than $260 billion in domestic deposits; regional banks are those with $55 billion-$259 billion in domestic deposits; and midsize banks are those with less than $55 billion in domestic deposits.

For more information about the U.S. Retail Banking Satisfaction Study, visit https://www.jdpower.com/business/resource/us-retail-banking-satisfaction-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

¹Net Promoter,® Net Promoter System,® Net Promoter Score,® NPS,® and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

 

Despite Hesitations Caused by Pandemic, Paint Customers Continued In-Store Shopping, JD Power Finds

2021-04-27

jillian.breska

Nearly 4 of 10 U.S. consumers (37%) have a current or planned home improvement project in the next three months as COVID-19 has not stopped shoppers from visiting paint retailers in person. According to the JD Power 2021 Paint Satisfaction Study,^SM released today, the proportion of in-store buyers is consistent with the pre-pandemic rate of 92%. In fact, 98% of paint and stain buyers say they felt safe and comfortable while shopping in the store.

“The effort put forth by paint retailers and staff to ensure the safety of their customers has undoubtedly paid off,” said Christina Cooley, director of the Home Intelligence practice at JD Power. “Though we’ve seen a slight increase with exterior paint and stain being purchased online, interior paint shoppers still heavily rely on the consultative in-store experience.”

Study Rankings

Benjamin Moore ranks highest in the interior paint segment with a score of 863. BEHR (862) ranks second.

Sherwin-Williams ranks highest in the exterior paint segment with a score of 869. Benjamin Moore (858) ranks second and BEHR (853) ranks third.

Sherwin-Williams ranks highest in the exterior stain segment with a score of 850. Glidden (844) ranks second and Valspar (836) ranks third.

Sherwin-Williams ranks highest in the paint retailer segment with a score of 882. Benjamin Moore independent retailer (871) ranks second.

The 2021 Paint Satisfaction Study is based on responses from 5,804 customers who purchased and applied interior paint, exterior paint and/or exterior stain in the past 12 months. The study was fielded in January 2021.

For more information about the U.S. Paint Satisfaction Study, visit http://www.jdpower.com/business/resource/paint-satisfaction-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

 

April New-Vehicle Sales to Break Record Despite Low Inventory; Buyers Will Spend More on New Vehicles Than Any Other April

2021-04-28

jillian.breska

The Retail Sales Forecast

New-vehicle retail sales for April 2021 are expected to be the highest ever recorded for the month of April, according to a joint forecast from JD Power and LMC Automotive. Retail sales for new vehicles are projected to reach 1,325,500 units, a 110.6% increase compared with April 2020, and an 20.8% increase compared with April 2019, when adjusted for selling days. April 2021 contains the same number of selling days as April 2020 and one more selling day than April 2019. Comparing the same sales volume without adjusting for the number of selling days translates to a year-over-year increase of 110.6% from 2020 and a 25.6% increase from 2019.

The Total Sales Forecast

Total new-vehicle sales for April 2021, including retail and non-retail transactions, are projected to reach 1,479,800 units, a 107.1% increase from April 2020 and a 7.8% increase from April 2019 when adjusted for selling days. Reporting the same numbers without controlling for the number of selling days translates to a 107.1% increase from April 2020 and a 12.1% increase from April 2019. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 18.1 million units, up 9.4 million units from 2020 and up 1.7 million units from 2019.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“Despite low inventory, April 2021 will be another record-breaking month for the U.S. auto industry. Building on the strength that began in Q4 2020 and continued through Q1 2021, the industry will set records for April sales volumes, transaction prices, consumer expenditure and retailer profitability. However, with the sales pace exceeding the rate at which vehicles are being produced, compounded by significant production disruption due to microchip shortages, there is a growing risk to the industry’s ability to sustain the current sales pace in the coming months.

“While falling numbers of vehicles in inventory at retailers is the primary risk to sales results in the coming months, to date, low inventories have not had a material effect on aggregate sales results. Instead, they have enabled manufacturers and retailers to reduce discounts and consumers are demonstrating a willingness not only to buy vehicles closer to MSRP, but also to buy more expensive vehicles.”

Total retailer profit per unit, inclusive of grosses and finance & insurance income, are on pace to reach $2,697, an increase of $1,313 from a year ago. Grosses have been above $2,000 for eight of the last 10 months. Coupled with the strong retail sales pace, total retailer profits from new vehicle sales will be $3.5 billion, the highest ever for the month of April and up 151% from April 2019.

Average transaction prices are expected reach another monthly high, rising 6.8% to $37,572, the highest ever for the month of April and second highest all time on record behind December 2020. For context, average transaction prices are 20% higher in April 2021 than they were in April 2016 at $31,240.

“Record prices and retail sales mean that, in aggregate, consumers will spend more money on new vehicles than any April on record. Consumers will spend $49.8 billion on new vehicles this month, the highest ever for April and the third-highest consumer expenditure month on record—eclipsed only by the $51.2 billion spent in March 2021 and the $51.5 billion spent in December 2020.

“Retailers continue to prove to be very adaptable to the current environment by turning inventory quickly to maintain sales pace as the average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to 50 days, down 34 days from a year ago. More notably, retailers are selling a larger proportion of vehicles almost as soon as they arrive in inventory.  This month, nearly one-third of vehicles were sold within 10 days of arriving at a dealership, up from one-fourth of vehicles sold within 10 days in April 2019.

“SUVs and trucks are on pace to account for a combined 76% of retail sales, flat with April 2020 and equal to the highest April on record. This is partially due to SUVs and trucks having a more limited inventory than cars. The last time SUV and truck share did not post year-over-year gains was in January 2013.”

The average interest rate for loans in April is expected to increase 46 basis points to 4.3 % from a year ago, on track for the first year-over-year increase since July 2019.

“The strong sales pace, despite smaller discounts and more expensive vehicle purchases is due in part to extremely strong used-vehicle prices. Even with interest rates being slightly higher, the average monthly finance payment is $593, up only $2, aided by average trade-in values rising to $5,502, an increase of $3,087 (up 128%) from a year ago.

“While the April results are outstanding for retailers in aggregate, the results for manufacturers are mixed. Manufacturers are benefitting from reduced levels of incentives which directly improves their profitability. However, manufacturers recognize revenue when vehicles are shipped from the factories—not when they are sold by retailers. Hence, manufacturers Q2 revenues will be directly affected by microchip-related plant shutdowns which are limiting the number of vehicles they can build in the quarter.

“Looking forward to May, with inventory levels materially lower than they were at the start of April, the risk of inventory related sales disruption is increasing, but April did demonstrate that lower than normal inventories were still sufficient to deliver record sales volumes. Whether inventory levels will finally fall in May to the point where aggregate industry sales are disrupted is unclear, but a couple of things are relatively certain.  First, sales of certain models in select geographies will be disrupted. Second, retailers with inventory will continue to benefit from strong consumer demand and the opportunity to sell that inventory with minimal discounts.”

Sales & SAAR Comparison

U.S. New Vehicle	April 20211	March 2021	April 20193
Retail Sales	1,325,500 units (+110.6% higher than April of 2020; +20.8% higher than April 2019)2	1,380,697 units	1,055,077 units
Total Sales	1,479,800 units (+107.1% higher than April 2020; +7.8% higher than April 2019)2	1,605,520 units	1,319,894 units
Retail SAAR	16.7 million units	15.5 million units	13.5 million units
Total SAAR	18.1 million units	18.0 million units	16.4 million units

¹ Figures cited for April 2021 are forecasted based on the first 21 selling days of the month.
² April 2021 has 26 selling days, the same as April 2020 and one more day than April 2019.
³ April 2019 is displayed to avoid April 2020 pandemic-influenced comparisons.

The Details

• The average new-vehicle retail transaction price in April is expected to reach a monthly record $37,572. The previous high for any month, $37,966, was set in December 2020.
• Average incentive spending per unit in April is expected to fall to $3,191, down from $4,953 in April 2020 and $3,573 in April 2019. Spending as a percentage of the average MSRP is expected to fall to 7.5%, down 4.2 percentage points from April 2020 and down 1.5 percentage points from April 2019.
• Average incentive spending per unit on trucks and SUVs combined in April is expected to be $3,173, down $1,989 from a year ago and down $445 from 2019, while the average spending on cars is expected to be $3,219, down $1,049 from a year ago and down $247 from 2019.
• Consumers are on pace to spend $49.8 billion on new vehicles, the highest ever for the month of April, and up $27.7 billion from April 2020 and up $14.2 billion from April 2019.
• Truck/SUVs are on pace to account for 76.1% of new-vehicle retail sales in April.
• Fleet sales are expected to total 154,400 units in April, up 81% from April 2020 and down 44% from April 2019 on a selling day adjusted basis. Fleet volume is expected to account for 10% of total light-vehicle sales, down from 12% a year ago.

Observations on New Vehicle Residual Values

Eric Lyman, vice president, ALG:
“Unique market conditions behind ALG’s highest residual value forecast on record continue to unfold in favor of remarketers and lease portfolio risk managers—who may have some of the easiest jobs in the auto industry right now. The 2020 declines in overall sales, lease penetration and rental fleet units are driving a 5% decline in ALG’s Used Supply outlook for 2021, with further declines expected until 2023 when the volume of one- to five-year-old vehicles expected to change hands will be down 11.5% from 2020 levels. The continued shortage of vehicles contributes to lower incentive spending and higher transaction prices which serve to strengthen our benchmark residual value forecast.”

Observations on the Used Vehicle Market

Jonathan Banks, vice president, Valuations Services:
“The used vehicle market continues to be red hot and prices remain at record levels. This isn’t going to change in the foreseeable future. Year to date, wholesale prices have increased a massive 32% while used retail prices are 10% above where they were at the end of 2020.”

Global Sales Outlook for March 2021

Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:
“The global light-vehicle sales recovery remained strong through March, ending the first quarter up 22% from a year ago. The first quarter selling rate averaged 84 million units, a significant improvement from the average of 70 million a year ago. Top market performers were China and India, up 72% and 41%, respectively. Both markets were affected by the pandemic early and substantially, thus the sharp increase. While the improvement is not nearly as marked, North America has been the surprise of the recovery. Strength has accelerated in the United States and Canada, pushing the region’s selling rate to 19.7 million units, nearly back to pre-pandemic levels. We expect sales to remain strong globally as April closes. The selling rate in April is expected to hold at the rate of 84 million units with some upside potential, thanks to a very strong U.S. market. It will be offset by the continuation of a slower recovery in Europe.

“The effect from vehicle inventory shortages has been muted thus far in America and other key markets. But inventory is reaching a critical low and consumers are scrambling to buy vehicles, even if their first choice is not available. Some effect through the second quarter is expected as demand continues to outpace supply in the U.S. and Canada. Western Europe is a different situation. While sales have improved, the increase was reduced as several countries faced additional virus-related restrictions. The result is inventory levels returning to a healthier level. Our 2021 forecast for global light-vehicle sales has increased slightly to 88 million units, a 13% improvement from 2020. There is a growing feeling of optimism with the expected global economic recovery which spills over to the auto industry as long as manufacturing can weather the disruptions that are likely to be with us for the remainder of the year.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Emmie Littlejohn, LMC Automotive; Troy, Mich.; 248-817-2100; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.co

 

Auto Insurance Shopping Surged during Pandemic in 2020 but Little Brand Differentiation Apparent, JD Power Finds

2021-04-28

jillian.breska

A 55% decrease in the average number of miles driven and a record 15% unemployment rate sent many auto insurance customers shopping for a new policy after the onset of the pandemic in 2020. What they found was an increasingly homogenized marketplace differentiated primarily by price. According to the JD Power 2021 U.S. Insurance Shopping Study,^SM released today, insurers’ efforts to differentiate themselves in the marketplace will increasingly hinge on bringing more innovative customer solutions to market.

“The pandemic has revealed a lot about insurance shopping behaviors in 2020, as there was a significant surge in shopping activity among customers who were financially affected and many gravitated to big, well-known brands and offers for lower rates,” said Tom Super, head of property & casualty insurance at JD Power. “The experience shines a spotlight on the need for more sophisticated acquisition and retention tools. Ironically, while the industry’s estimated annual ad spend now nears $10 billion, consumers say they see less differentiation among the top brands. Following a period of massive disruption and a prolonged, uneven recovery, auto insurance customers have a heightened expectation about factors such as price, flexibility and coverages. Insurers need to get more creative around customer service and delivery because the current incremental changes are missing the mark.”

Following are some key findings of the 2021 study:

• A tale of two auto insurance customers: More than half (54%) of auto insurance customers have taken no action to manage their insurance costs during the pandemic. Among the 46% who have made changes, the most frequent are reducing coverage (17%); shopping for another carrier (15%); increasing deductible (12%); or switching to another carrier (12%). There has been a 6-percentage-point increase in shopping activity among customers who have had a pandemic-related change in their financial circumstances.
• Many customers unaware of insurance industry relief efforts: The auto insurance industry returned an unprecedented $18 billion in auto insurance premiums—representing approximately 7% of total industry premiums—to customers who have driven significantly less miles since the beginning of the pandemic. Despite the size and scale of this relief effort, 43% of shoppers were not aware of their insurer making any changes because of the pandemic.
• Customers continue migration to big brands: The top five insurers—in terms of total premiums—now account for 60% of all auto insurance premiums, up from 44% two decades ago. This past year saw another 3% year-over-year increase in auto insurance customer migration to the five biggest insurers. Unaided brand awareness—despite an estimated $10 billion in consumer advertising—has been a major driver of this trend.
• Customer lifetime value becomes critical metric for carriers: One-fourth (25%) of auto insurance shoppers are projected to have higher customer lifetime value by virtue of strong credit scores and high likelihood of adding additional insurance products. According to this year’s study, MetLife (33%), Travelers (32%) and Erie Insurance (31%) have the highest mix of high lifetime value shoppers.

Study Rankings

Liberty Mutual and State Farm rank highest in a tie among large auto insurers in providing a satisfying purchase experience, each with a score of 872 (on a 1,000-point scale). The segment average is 871.

American Family ranks highest among midsize auto insurers, with a score of 899. Amica Mutual (891) ranks second and Erie Insurance (882) ranks third. The segment average is 858.

Now in its 15^th year, the U.S. Insurance Shopping Study captures advanced insight into each stage of the shopping funnel and is based on responses from 12,971 insurance customers who requested an auto insurance price quote from at least one competitive insurer in the previous nine months. The study was fielded from March 2020 through January 2021.

For more information about the U.S. Insurance Shopping Study, visit https://www.jdpower.com/business/resource/jd-power-us-insurance-shopping-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-inf

 

Water Utility Residential Customer Satisfaction Remains Steady as Usage Surges in Pandemic, JD Power Finds

2021-05-05

jillian.breska

A combination of major regional service interruptions, significantly increased water consumption, higher utility bills and a lack of effective communication during the pandemic have resulted in no change year over year in customer satisfaction with residential water utilities, according to the JD Power 2021 U.S. Water Utility Residential Customer Satisfaction Study,^SM released today. Overall customer satisfaction remains at 737 (on a 1,000-point scale) as usage has increased about 6% nationwide, and this year marks the first time that satisfaction has not improved since the study began in 2016.

“Between the massive weather event in Texas and the overall heightened sense of anxiety among consumers who have been spending more time at home and consuming more water, the past year has put local water utilities to the test,” said Andrew Heath, senior director of utilities intelligence at JD Power. “Despite recent efforts to improve communications and ramp up digital customer service channels, water utilities still have a long way to go when it comes to delivering valuable, proactive communications to help their customers through challenging situations. For example, the widespread service interruptions in Texas really put a spotlight on just how vulnerable utilities can be to adverse weather events.”

Following are key findings of the 2021 study:

• Customer satisfaction remains static or declines as usage spikes: Overall customer satisfaction with residential water utilities remains the same nationwide in 2021, following five consecutive years of steady improvement. Specific areas showing declines in customer satisfaction are billing and payment and customer service. Residential water usage has increased about 6% year over year.
• Texas storm reveals cautionary tale: Three-fourths (75%) of residential water utility customers in Texas experienced some type of water service interruption and 44% were subject to a boil advisory following the severe winter storm in February 2021. Accordingly, quality and reliability satisfaction scores throughout Texas fell 20 points during the fourth wave of the study (conducted in March 2021). Overall customer satisfaction scores  average 116 points lower among customers who experienced boil advisories.
• Need to communicate results of annual water quality report: Water utilities are required to test the tap water and publish an annual Consumer Confidence Report to reassure their customers that the  water is safe to drink. Only 41% of customers recall seeing or receiving such a report but, among customers who do recall seeing or receiving a report, satisfaction scores increase 83 points, on average.

Study Rankings

The study measures customer satisfaction with water utilities in eight geographic regions. Highest-ranking utilities and scores, by region, are as follows:

• Midwest Large: Illinois American Water (759) (for a second consecutive year)
• Midwest Midsize: City of Minneapolis (759) (for a second consecutive year)
• Northeast Large: New Jersey American Water (760)
• Northeast Midsize: Monroe County Water Authority (756) (for a second consecutive year)
• South Large: Fairfax Water (780)
• South Midsize: OUC (800)
• West Large: Seattle Public Utilities (767) (for a second consecutive year)
• West Midsize: Aurora Water (767)

The U.S. Water Utility Residential Customer Satisfaction Study, now in its sixth year, measures satisfaction among residential customers of 90 water utilities that deliver water to at least 400,000 customers and is reported in four geographic regions and two size categories: Midwest Large, Midwest Midsize, Northeast Large, Northeast Midsize, South Large, South Midsize, West Large and West Midsize. Overall satisfaction is measured by examining 33 attributes in six factors (listed in order of importance): quality and reliability; price; conservation; billing and payment; communications; and customer service. The survey was conducted in four waves from June 2020 through March 2021.

For more information about the U.S. Water Utility Residential Customer Satisfaction Study, visit https://www.jdpower.com/business/utilities/water-utility-residential-customer-satisfaction-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-inf