With uncertainty mounting, price is the single most important factor in purchase decision – significantly more so than previous years. However, consumers find value-related criteria such as drive technology and brand more important than price-related criteria overall.
The 2023 Global Automotive Study*, conducted by global consultancy Simon-Kucher, reveals that a significant portion of car buyers across the world feel uncertain about the economic environment: half of those surveyed expect a decrease in purchasing power and three out of five customers say they intend to delay an upcoming vehicle purchase. The study, which surveyed more than 8,000 consumers across 20 countries, also uncovered that those who are ready to buy plan to spend 15-20 percent more than in recent years.
Perceptions still vary when it comes to the latest technology
Globally, electric vehicles (EVs) are now nearly as popular as gas/petrol options (63 percent vs. 64 percent that consider buying). While consideration of EVs is still on the rise, it is slowing down in some regions. Across the world, China has the highest consideration rate for EVs (89 percent) followed by Norway (74 percent) – on the other end of the spectrum is France (47 percent). For all consumers who would consider an EV, the top three reasons to buy one are environmental friendliness, regulation/financial benefits, and better driving experience. With regards to perception of autonomous driving, the differences are more generational than regional. In fact, 74 percent of Gen-Z are excited about autonomous driving and only 12 percent express fears of the current technology, as compared to 37 percent of Baby Boomers who say they are afraid of it.
“Consideration of electric vehicles has reached a peak in some countries, but there are still untapped markets across certain regions and consumer demographics which express concerns around price and insufficent range and charging infrastructure as their primary deterrents,” says Martin Gehring, Senior Partner and Head of Automotive at Simon-Kucher. “Now it is about developing and marketing the right products and infrastructure to alleviate these concerns and encourage customers to actually buy.”
Digital automotive sales are here to stay – but with proven elements from the past
When it comes to buying a car online, 55 percent of Gen Z indicate that this is their preference for their next purchase, compared to only 18 percent of Baby Boomers. More than half of customers are willing to accept more volatile price changes by car manufacturers – around one third are even hoping to get a better deal out of it than today. However, across all generations, almost 80 percent say they want to have a main point of contact they can turn to when purchasing a car.
“Customers like the idea of buying online -- but for many, it is one of the biggest purchases they’ll ever make. They want to have a single person they can talk to in case there are any problems,” says Matthias Riemer, Partner at Simon-Kucher. “Bridging the gap of online sales and offering that human-to-human interaction with somebody they trust will be key.”
Consumers are becoming increasingly receptive to new revenue models
A growing interest in subscription services and battery leasing for EVs by younger generations shows future trends in payment options. Vehicle subscription services have gained traction with the majority of respondents as 58 percent say they would consider a subscription service for their next car – up from 52 percent in 2022. When it comes to battery leasing, more than 70 percent of Gen Y and Gen Z are open to leasing the battery of an EV separately from the vehicle.
While only 50 percent of customers have heard of the Vehicle2Grid technology, the majority of respondents who are aware of the technology see it as key for more sustainable energy and are willing to adjust their charging pattern for it. But half of respondents reveal they would not trust a third party (i.e. energy company) to manage their vehicle battery – a clear challenge for Vehicle2Grid implementation. In contrast, more than 80 percent would be willing to share data from their connected vehicle and 75 percent are even willing to share personal driving data that can be used by OEMs to build new services. The top three data points they are willing to share are: fuel/energy consumption behavior, technical conditions of the vehicle, and battery level of EVs. On the flip side, the top three data points they’re least willing to share are: current location, start and end point of journey, and pictures and videos of the vehicle’s surroundings.
“With many of these new revenue models, a lot of consumer hesitation is due to unfamiliarity and skepticism, so it’s going to be increasingly critical to raise awareness and demonstrate the advantages,” says Antoine Weill, Partner at Simon-Kucher. “Vehicle2Grid will play a major role for sustainable energy, but in order to maximize the benefits of this technology, the focus for auto manufacturers and utility companies must shift to getting customers on board using smart monetization strategies.”
Complete study findings are available upon request, including country splits.
*About the Study: The Global Automotive Study was conducted in Q2 2023 by Simon-Kucher. The study surveyed 8,235 consumers across 20 countries: Australia, Belgium, China, Denmark, Finland, France, Germany, India, Italy, Japan, Netherlands, Norway, Saudi Arabia, South Korea, Spain, Sweden, Turkey, UAE, UK, USA, including representative quotas set for age, gender, living area, education level, employment status, & income level.