Fewer consumers in Europe feel connected vehicles will be beneficial
For more than a decade, research organisation Deloitte has explored automotive consumer behaviours and trends towards vehicle ownership, usage and mobility. This year’s findings reveal how the COVID-19 pandemic has affected attitudes.
In 2020, Deloitte surveyed more than 24,000 consumers in 23 countries to explore opinions regarding issues affecting the automotive sector, including the development of advanced technologies. This year, highlights of the research include: that EVs have hurdles to clear in terms of addressing range anxiety and charging infrastructure; younger consumers are feeling the pressure financially; drivers want advanced features as standard and vehicle sales are moving online, but not so fast.
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Attitudes towards electrification and connectivity
As with most vehicle sales, demand for battery electric vehicles (BEVs) has stalled globally during the pandemic and any car buying that has remained has been focused on affordable, tried and tested technologies.
The preference for internal combustion engine (ICE) vehicles has remained highest in South Africa (77%) and the United states (74%). This percentage of respondents are selecting petrol or diesel vehicles as their preferred choice for engine type in their next vehicle purchase. The Japanese have equal preference for ICE and hybrid electric vehicles (HEVs) (45% each). HEVs were the most popular choice in Italy (54%) but less popular in Germany (25%).
Although a positive consumer perception of connected vehicles is edging up in some markets (China, Japan and Republic of Korea), in EMEA the research showed that the benefits of connected vehicles are becoming less clear over time. The percentage of consumers who feel that increased vehicle connectivity will be beneficial has dropped in 2021, compared to 2020 in South Africa, Spain (although only by 1%), Belgium, UK, France, Germany and Austria. Compounding the issue is the fact that people globally are concerned about the security and safety of connected vehicles.
Attitudes towards safety features
Consumers want safety features in vehicles, such as blind-spot warning alerts and emergency braking, but the majority expect them to be standard and are not willing to pay (even a small premium) for them. That said, consumers in EMEA are more accepting of the price premium of electric and hybrid vehicles.
Vehicle Financing Trends
Generally, consumers either didn’t spend time researching (or spent less than an hour looking for) finance options for their current vehicle. Flexibility and convenience top the list of the most important characteristics of vehicle financing for consumers in the majority of EMEA nations. In Turkey and South Africa, they see acceptance based on low credit scores as important. Meanwhile in France, a third believe that 'all in rates' are most desirable. Having the flexibility for early termination and swapping vehicles is the most important characteristic of a vehicle finance in Germany, China, and India.
Consumers in India and China are most risk averse when it comes to taking a car loan, and requests for payment deferment during the pandemic was highest among younger people (18-34 year-olds).
Future vehicle intentions
Despite COVID-19 disruption, the majority of consumers in EMEA have not altered their timeline for buying a new car. However, the slight delay in demand that is expected will have a negative impact on sales. In the rest of the world, however, a significant downside demand risk exists in India, China, and the Rep. of Korea, as roughly a third of consumers plan to delay buying their next vehicle.
The research also indicates that consumers in India and China may be rethinking the type of vehicle they acquire next and choosing a cheaper option, whereas in EMEA things are more stable with only small signs of caution, other than in Turkey where 38% of respondents answering “Yes” to the question: Has COVID-19 caused you to change your mind regarding what type of vehicle you would most like to acquire next?
The slow rise of buying online
Buying cars online is increasing in popularity but most consumers prefer the in-person experience afforded by conventional dealerships. In Japan, 80% of respondents said they would buy their next vehicle at a dealership in person. In Germany it was 76% and USA 71%. Amongst consumers in EMEA, the preferences were similar. That said, India and the UK showed the highest levels of acceptance to buying cars fully virtually (27% and 19% respectively).
In terms of virtual servicing, whereby their vehicle is picked up from home or office when it requires servicing, most consumers (the world over) are interested but don’t want to pay extra for the convenience.
Interest in vehicle subscriptions, that allows access to different models from the same brand, is mixed. Consumers in India (69%), China (60%) and the Rep. of Korea (45%) are receptive to it, as are consumers in Turkey (56%) and South Africa (50%). In Belgium, UK, Germany and France interest was lowest (19%, 22%, 23% and 26%). The research showed that most consumers want vehicle subscription services to be either cheaper or the same cost as other forms of finance and are not willing to pay a premium for a subscription.
In essence, not much has changed other than the pandemic making car buyers more cautious about personal safety and committing to high-value, long-term finance. It’s too soon the say if these effects will be prolonged or short-term, suffice to say next year’s research will be interesting.
Image: Front cover of Deloitte's 2021 Global Automotive Consumer Study Report, courtesy of Deloitte