Almost everyone needs a car to get from point A to B. Many families have two or more cars. Due to the recent success of the new car market, there is a large inventory of used cars available for re-sale. New car sales have enjoyed the largest single month gain in October 2001, up 24%.
Our market segmentation will consist of four basic segments; students, retired, families, and singles.
Students will include high school and college age students who need a safe and economical car. This group is concerned with price, flashy looks, and being cool. These drivers tend to be less educated and will buy on impulse paying more for less car. They will also buy cars more often than others, on average every two to three years.
The retired group will focus on practicality. Cost may be less important than quality and features. This group wants comfortable, nicely equipped vehicles at a reasonable price. They will want a vehicle that will last for years.
Families will focus on safe, practical vehicles. Something that will last for years, can fetch groceries, carry the kids, and perform long trips. Many will be on a budget, and price may be a big factor. They will shop around and educate themselves on vehicles, shopping for a specific make or model.
The last group is the singles. They are similar to the students in that they want flashly cool cars, but may be a working professional who can afford to pay more for a higher-quality vehicle.
The Market Analysis pie chart shows an average increase of 10% in potential customers. Many of these groups will want to trade up for a newer or more expensive vehicle at a later date. This will create an ever increasing market for used car buyers.
We focus on providing for the average car buyer first. Our focus will be on those most likely to purchase low-end, low-cost vehicles (highest profit margin). The students, families, retired, and singles have very different needs and wants. We will focus on each group separately, and prioritize our efforts. We will look at every customer as a potential repeat customer, reference, or spokesperson for other car buyers.
There are two important underlying needs: quality vehicles at competitive prices, and a large supply of available vehicles.
We have four major trends that help us:
According to available market information, used car sales have risen 14%. Spending on used cars continues to rise, despite a slowing economy. As population increases in the area, so will the need for vehicles. Another strength is the fact that people are keeping cars for a shorter period of time before trading or selling. The average driver buys a new (or used) vehicle every four years. Vehicles are also maintaining more value. The result is continued increases in sales and profit margins.
Used car dealers are notorious for unethical sales practices. Customers are inherently cautious and untrusting as a result. The more we can provide a high-quality sales experience, the more successful we will be. Our salesmen will provide a friendly and personal experience for the buyer. We will follow up and ensure customer satisfaction. We will rely on these customers for an excellent reference to other car buyers. This company will build an excellent working relationship with our suppliers and customers.
Used car sales in the area are still relatively average in size. Dealers have varying degrees of success based primarily on location, products, and the sales team assembled. Quality sales personnel are usually not adequately compensated for their services, and as a result they tend to move from one dealer to the next.
Our closest, similar competitors are AA Auto Sales, Big Apple Car Sales, Frank's Auto Place, Guaranty, R & L Motors, and Sierra Truck, all on Hwy 99 between Eugene and Junction City.