Automotive Blog

Market share numbers: Now carmakers can get ’em while they’re hot




The global automotive industry is humming, but potholes still abound. India’s Tata Motors badly overestimated demand for its $2,000 Nano minicar in its high-growth native market, for instance, while Volkswagen has been unable to avoid a leveling-off in sales, even in a market as well understood as the US.

Such missteps underscore the still-glaring need for global automotive companies to embrace the potential of Big Data, not only to avoid planning mistakes but to gain competitive advantages at both the tactical and the strategic levels.

One tactical Big Data blind spot for carmakers has been access to timely monthly market-share data. They rely on this data to plan their advertising and incentive campaigns. For instance, if one car company sees its market share for midsize cars slipping in one region in one month, it can mount an ad campaign the next month to try to win that share back. Advertising spend globally for autos in 2013 will be roughly $31 billion, according to Nielsen. Incentive spend in the United States alone is expected to be more than $30 billion, the National Automobile Dealers Association has stated.

In the United States, market-share information for every zip code in the country has been generated from auto registrations reported within the 50 states and compiled by R.L. Polk & Co. Polk has been the source of record for registration data in the United States for almost 100 years and is now part of IHS Automotive. (See Spotlight on page 54 for more details on the acquisition and its implications.)

Historically, some of the states would take 30 to 40 days to release the monthly registration data. Of course, this delay negatively impacted automakers’ ability to mount effective ad campaigns.

This is where Big Data analytics come in. Today, IHS is blending the monthly vehicle registration data with transactional and navigational data from a variety of sources, including online car shopping sites. Using sophisticated data analytics—along with insight from IHS Automotive analysts—it is now possible to provide weekly market-share estimates within 48 hours of the previous week’s results. This is a 20-fold improvement in the timeliness of the data that enables automakers and dealers to target their ad campaigns to ideal audiences with razor-sharp precision.

From Anchorage, Alaska, to Zachary, Louisiana, auto dealerships can now spend their precious marketing dollars with more confidence and effectiveness.

John Brennan Senior Director, strategy and product management, IHS Automotive.