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J.D. Power: Consumers Debunk Industry Definition of Superstores

25 March 1998

J.D. Power and Associates Reports: Consumers Debunk Industry Definition of Superstores

    AGOURA HILLS, Calif., March 25 -- J.D. Power and Associates
1998 Consumer Insights: Dealers, Superstores and the Internet Study(SM)
reveals that consumer perceptions of what constitutes a vehicle superstore are
not the same as the auto industry's definition.
    According to the study, consumers define a "vehicle superstore" as having
a large selection and lower prices.  On the other hand, the industry defines a
superstore as having a large number of vehicles, no-hassle sales and non-
negotiable prices.
    The study also shows that consumer perception of superstores is different
than their perception of today's largest dealers.  Large dealers are only seen
as offering a wide selection, but not lower prices.
    "If superstores are unable to provide lower prices or additional value to
justify a higher price or a better purchase process, they will be challenged
by alternative vehicle shopping channels," commented Doris Ehlers, a partner
at J.D. Power and Associates.  "This may open the door for manufacturers to
market vehicles directly to consumers," she added.
    Finally the study shows that the bottom line for consumers is simply lower
prices and that, armed with information from the Internet, those consumers are
pressuring the industry to meet their needs.  Essentially, consumers do not
look to escape the system of the traditional dealership, but instead want to
find a way to obtain the best deal within the traditional system.
    "We are seeing a trend in which vehicle buyers are armed with more
information and will command more negotiating power away from the dealer,"
continued Ms. Ehlers.  "As a result of this drive for lower prices, we expect
to see a race for cost efficiency among independent new vehicle dealers and
publicly owned retailers," she concluded.
    The J.D. Power and Associates 1998 Consumer Insights: Dealers, Superstores
and the Internet Study is based on survey responses from more than 6,000
driving-age Americans.  The purpose of the study is to analyze retailing
concepts from the consumers' perspective in order to give the automotive
retail industry an accurate portrait of what, where, how and why consumers are
purchasing vehicles.
    J.D. Power and Associates is an international firm best known for its
marketing information services in key business sectors including market
research, forecasting and customer satisfaction.  The firm's quality and
satisfaction measurements are based on actual customer responses from over a
million consumers annually.  With its headquarters in Agoura Hills,
California, the firm also has U.S. offices in Torrance, California; Michigan;
and Connecticut.  Its international locations include Japan, Korea, England,
Canada and Brazil.  J.D. Power and Associates can be accessed through the
World Wide Web at http://www.jdpower.com.  Media email contact:
john.pepitone@jdpower.com.
    This press release is provided for editorial use only.  No advertising or
other promotional use can be made of the information in this release or J.D.
Power and Associates survey results without the express prior written consent
of J.D. Power and Associates.
SOURCE  J.D. Power and Associates