The drop in oil prices that began in mid-2014 has undoubtedly affected many consumers and car owners all over the world. Here at Crimson, we decided to explore the social media conversation surrounding this market fluctuation and analyze the differences in conversation between consumers living in the U.S. and the U.K., two countries that use automobile travel very differently. As these insights have a significant impact on the automotive industry, we also wondered is there a relationship between the drop in oil prices and consumer intent to purchase new cars in both countries? The results were surprising.
Completely filled up my tank with $25 loving these low gas prices
— KariAnna Kuklinski (@k_kuklinski) December 19, 2014
In the U.S., the majority of people discussing gas prices are really excited about the financial dip. Thousands of U.S. consumers have tweeted about how happy they are filling up their tanks for less and being able to pocket some extra cash. By diving into the Post List, we found that many users have expressed a desire to always have their tanks full, drive more, and purchase new cars. According to CNBC, Capital Economics economist Paul Diggles stated that “the plunge in fuel costs will likely add momentum to the car sales rebound”. We found in our analysis, that the increase in discussion about lower gas prices in the U.S. coincides with an increase in conversation from consumers planning to purchase new cars. The latter occurs in September 2014, right around the time when people started talking about the drop in gas prices, with a dramatic 38.6% increase in post volume from the month of August. Both conversations spike in January 2015, the month when most people in the U.S. were talking about wanting to buy a new car and about the drop in oil prices. What does all this mean for the auto makers and buyers of the world? Companies within the auto industry should understand this relationship and listen to what consumers are saying. Car dealerships should stay alert and make sure that they can keep up with the increasing demand for particular models, it could be the difference of a good or bad sales month. Some consumer trends could emerge from this shifting sentiment as well. For example, consumer preferences may shift from small to mid-sized vehicles to SUVs and trucks, and both hybrid and electric car sales could be affected. Consumers in the U.K., however, have expressed their dissatisfaction with the drop in British gas retail prices of only 3.5%-5% of cost. Since oil prices dropped by 50%, consumers believe that those savings should be passed on to the end user and that the current reduction on cost is too minimal.
Oil has come down by 50% a barrel, so why are we not seeing more of a cut in petrol prices? — Tom Flynn (@TomFlynnmusic) December 24, 2014
A unique insight we found was a similar increase in intent to purchase new cars from U.K. consumers. Midway through September 2014, we found that chatter regarding intent to purchase nearly doubled and has remained elevated. During the same time period from 2012-2013, we saw an increase in volume of only 5%, and from 2013-14 a decrease in volume of 12%, yet 2014-15 shows a 41% increase in total post volume.
We also explored the differences between the interests of those involved in the social conversation about decreasing gas prices. Using our Affinities™ function, we observed that users in the U.K. have much stronger affinities towards sustainability, renewable energy, the oil industry, and economics, compared to users in the U.S. This highlights the difference in conversations between the American and British social users, where a higher portion of consumers in the U.S. are satisfied with the decrease in prices and a larger portion of U.K. consumers are not.
ForSight™ offers customers a diverse set of tools that provide valuable and actionable insights to work with. While the insights focused on the decline of oil prices, the interesting results were the common ground and key differentiators in these two global markets. With the wealth of data supplied through Crimson’s analysis, marketers and executives within the automotive industry are able to carry out strategy with greater confidence.