Gen Y Consumers in the Market for Affordable, Technology-Enabled Cars
While young consumers view car ownership as less important for mobility than previous generations, they are, nonetheless, excited about affordable, technology-enabled vehicles – especially hybrid electric cars. According to preliminary results from a soon-to-be-released report from Deloitte, over half (61%) of Gen Y consumers expect to buy or lease a car within the next three years. Almost a quarter (23%) expect to purchase or lease in the next 12 months – and a mere 8% do not expect to ever purchase or lease a vehicle.
Among Gen Y consumers who do not currently own or lease a vehicle, cost seems to be the main barrier – with most (80%) saying it is because they cannot afford it and three quarters citing high operational and maintenance costs. In addition, 67% said their lifestyle needs are met by walking or public transportation, while 40% said their lifestyle needs are met by car borrowing and car sharing.
WHAT DOES GEN Y WANT IN A CAR?
Most Gen Y consumers – whether they currently own a vehicle or not – demonstrate a clear affinity for cars and trucks with alternative powertrains. More than half (59%) think they will be driving an alternative engine vehicle five years from now, with more than a quarter (27%) naming hybrid electrics as their single most preferred type of alternative engine – far ahead of plug-in hybrids (8%), all-battery electric vehicles (7%), and fuel-cell vehicles (4%). What is more, they would like the government to help defray the higher costs of alternative powertrains, with 58% saying they would support government programs that reward consumers for choosing alternative/high-efficiency engines.
“Gen Y consumers across the board also want safety technology, especially features that mitigate the risks of distracted driving,” says Masa Hasegawa, principal, Deloitte Consulting LLP. “Almost three quarters (72%) want technology that recognizes the presence of other vehicles on the road and 63% want technology that lets them know when they have exceeded the speed limit.”
Plus, more than half (56%) want technology that entertains them while they are driving and 57% wish it were easier to customize a vehicle’s technology after purchase or lease. And more than half would like to connect their smart phone to use all its applications from the vehicle’s dashboard interface.
AN OPPORTUNITY FOR THE AUTO INDUSTRY
Deloitte’s soon-to-be-released report indicates that Gen Y consumers bring an open mind to the car-buying process, taking their customer experience cues from outside the industry. They expect their automotive shopping experience to be similar to their retail and technology experiences.
Forty-one percent of Gen Y consumers have a positive attitude towards automotive dealers – an almost two-to-one margin over other generations, which top out at 22% on average. And 40% of Gen Y consumers say the salesperson at the dealership has a major or significant impact on their vehicle purchase, well above the 27% of consumers from other generations saying so. Further, 53% of Gen Y consumers feel that auto manufacturer websites have a major or significant impact on their vehicle purchase, compared to only 35% of other demographics.[Source: Research conducted by Deloitte. 16 Jan. 2014. Web. 17 Jan. 2014.]