Cars Online 11/12 - Changing dynamics drive new in technology and business models

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Capgemini’s Cars Online 11/12 study explores these topics – and more – and considers the impact they will have on the automotive industry. The study involves over 8,000 consumers in eight countries (Brazil, China, France, Germany, India, Russia, UK and US).

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Cars Online 11/12 - Changing dynamics drive new in technology and business models

  1. 1. Automotive the way we see itCars Online 11/12Changing Dynamics Drive New Developments inTechnology and Business Models
  2. 2. ContentsIntroduction 3Executive Summary 4Developing Markets: Localization Remains Key to Growth 6Shopping Behavior: ‘No More Tire Kickers’ 9The Role of the Web: Internet Usage Expands Into New Areas 14Online Buying: Latent Demand Strengthens 17Green Vehicles: Spotlight Shines on Electric Cars 21Customer Interaction: There’s an App for That 24Aftersales: Servicing Grows as a Factor in Vehicle Decisions 29Conclusion and Recommendations 32© 2011 Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written permission from Capgemini.
  3. 3. Automotive the way we see it Introduction “ The sellers should notfocus only on the technical aspects of the car and Uncertainty and change are among the dominant sentiments characterizing the automotive industry today. Vehicle sales in many markets have maintain their loyalty through the vehicle lifecycle. As the vehicle buying process evolves, the engines; instead they fluctuated up and down over the past it is important to recognize that year, reflecting the unstable economic selling vehicles is as much about should also be interested environment, volatile fuel prices and the car buyers as it is about the cars in the drivers and their the residual impact of the earthquake themselves. Noted one consumer hopes and needs that in Japan. from France: “The sellers should not focus only on the technical aspects of the aren’t just about the Similar uncertainty is evident in this car and the engines; instead they should mechanical aspects year’s Cars Online study. Positive signs also be interested in the drivers and their ” of the car. include an increase in the number hopes and needs that aren’t just about the of new – compared with used – car mechanical aspects of the car.” French consumer buyers in mature markets and an increase in overall satisfaction with Vehicle buyers lie at the heart of our the vehicle buying process. On the Cars Online research. This year’s report downside, however, brand and is based on research conducted with dealer loyalty declined slightly and more than 8,000 in-market consumers many consumers indicated they were in the mature markets of France, postponing buying a car until the Germany, United Kingdom and the economy shows more signs of stability. United States, and the developing Those consumers who are in the markets of Brazil, China, India and market are interested in innovative Russia. The study includes both technology and ownership models, quantitative and qualitative consumer including online buying, alternative- views on topics ranging from the fuel vehicles, smartphone applications shrinking vehicle buying cycle and and mobility solutions like vehicle electric vehicles; to mobility programs sharing. and expanded use of the web. Understanding these rapidly We are confident that the findings evolving dynamics is essential to of Cars Online 11/12 will provide success for automotive companies. automotive companies with insights Cars Online 11/12 – Capgemini’s 13th into the changing dynamics of vehicle annual global automotive study – buying behavior. And we believe those provides an in-depth look at these insights can be particularly valuable in trends. The study offers insight into helping to guide business decisions in how consumers in both mature a time of uncertainty and change. and developing markets shop for vehicles, factors that influence their buying decisions, the growing role of aftersales/servicing and how toCars Online 11/12 3
  4. 4. Executive SummaryCapgemini’s Cars Online research 71% said they would be likely to important factor in selecting a vehicleexamines key topics impacting purchase a vehicle from a particular this year (tied with interior/exteriorthe industry, including trends in car manufacturer or dealer if they styling and fuel economy), up fromdeveloping markets, consumer found positive comments posted seventh position the prior year.shopping behavior, the role of the web on social media sites; and 51% said In addition, servicing dealers canand social media, online buying, green they would be less likely to buy a influence future buying decisions.vehicles, customer interaction and vehicle from a particular manufacturer More than half of respondents saidaftersales servicing. Understanding the or dealer if they found negative they were likely to buy their nextshifting dynamics in these areas can comments. Both findings point to the vehicle from the same dealer theyhelp automotive companies respond increasing importance of managing, currently use for servicing.faster and more effectively to changing monitoring and analyzing social mediaconsumer needs and demands. content. The growing emphasis on servicing is also reflected in the fact thatA number of key findings emergedfrom this year’s study: 3 Smartphone applications represent an emerging channel for customer interaction. Consumers service reminders are cited as the most useful/valuable form of post-sale communication and are1 The use of the Internet during the vehicle buying processand ownership lifecycle continues indicated strong interest in mobile/ smartphone applications for their vehicle, particularly post-sale. Apps among the most useful mobile apps listed by respondents. In fact, the Internet is becoming a moreto expand into new areas. Web considered most useful by consumers common tool for service support,usage for researching vehicles edged include remote support features including appointment scheduling,upwards this year, reaching 94% such as remote locking/unlocking car replacement booking, work orderoverall, driven in part by increased of vehicle doors (named by 68% approval, work order confirmation,use in developing markets. More of respondents) and a parked car post-service surveys and access to aimportantly, use of the Internet locator using GPS (64%); vehicle vehicle’s history. These developmentshas expanded into areas such as: information such as a vehicle make it clear that aftersales serviceonline buying of vehicles, parts and owner’s manual with easy navigation needs to be a key part of anaccessories; growing reliance on social (63%); driving support features automotive company’s sales plan.media and user-generated content like vehicle health information/as a source for vehicle and dealerinformation; and mobile web growthduring the buying cycle and post-sale status of vehicle operations (64%) and diagnostic trouble codes (63%); care information like service 5 Increasing consumer demand for alternative buying models reflects a growing shiftas consumers look for vehicle-related reminders (67%) and manufacturer from products to services; fromsmartphone applications. vehicle notifications (63%); and traditional vehicle ownership to communications such as roadside “power by the hour.” Nearly 40%2 Social media becomes more influential in vehicle buyingdecisions. Consumers, particularly in assistance with an easy-to-navigate single click (67%). Consumers are also interested in using smartphone of respondents would consider a vehicle-sharing or ride-share program as an alternative to traditional buying/developing markets, are increasingly apps during the buying cycle for leasing of a vehicle, and almost halfrelying on social media during the scheduling a test drive and vehicle would look at a mobility packageresearch process. Among the tools they configuration. (which offers access to a variety ofturn to are dealer and manufacturer vehicles, services and accessoriessocial media sites, automotive blogsand discussion groups, personal socialnetworking sites, social messaging/ 4 Aftersales servicing is a growing factor in consumers’ choice of vehicle and can be a key to vehicle that can be used as needed by the consumer for a fixed price and a specified time frame, such as “Mumicro-blogging sites, and video- and sales. Servicing is taking on a bigger by Peugeot”). The interest wasphoto-sharing sites. The content that role for many consumers, particularly particularly pronounced amongconsumers find on these sites can be in developing markets. Aftersales younger consumers and in developinginfluential in their buying decisions: servicing ranked as the fourth most markets. If this trend continues it4
  5. 5. Automotive the way we see itcould represent a significant shiftin the way consumers think aboutcar buying and ownership and lead 7 Consumers in developing markets have become more demanding about both the quality means that those customers who visit the showroom are serious, not just curious. Dealers must capitalize onthe industry to consider alternative and quantity of car dealerships. these visits since one chance may bebusiness models. Recognizing the As the number of vehicle owners and all they get.potential impact of this change, some dealerships increases in markets suchcar rental companies and vehicle as India, China and Brazil, consumersmanufacturers are testing models such are growing more particular aboutas mobility packages. what they expect from a dealer. They want proximity to their home as they6 The demand for new – rather than used – vehicles has edgedupward in mature markets. In a are unwilling to travel very far to buy a car. In China, for example, only 23% of respondents will travel farther than 10positive sign for the industry, a higher miles to buy a vehicle, compared with “number of respondents from the 53% of all consumers. In addition, theymature countries were in the market demand faster, higher-quality responses The way of sellingfor new vehicles this year, especially from dealers and will walk away if theirsmaller, more fuel-efficient cars. In only one brand in needs are not met.all four mature markets (France, one shop will be brokenGermany, U.S. and U.K.) the numberof intended new car buyers increasedby several percentage points, while 8 The vehicle buying cycle continues to shrink, especially when it comes to showroom visits. soon and car supermarkets will appear. This way wethe number of intended used car Increasingly, consumers are waiting can compare more vehicles ”buyers declined. This may reflect until the final weeks before purchase on the spot.a return on the investments made to visit dealerships. Forty-three Chinese consumerby manufacturers in new product percent of respondents won’t visitdevelopment, especially around a showroom until a month priorsmaller vehicles, alternative fuels, to their purchase, compared withinfotainment and communication 39% the previous year. While thistechnology, navigation systems, and reduces the opportunities to interactsafety and quality features. with customers face to face, it also About Capgemini’s Cars Online Study Capgemini worked with SmartRevenue, a Ridgefield, Connecticut-based research firm, to conduct the survey for Cars Online 11/12. All analysis and interpretation of the data was made by Capgemini in collaboration with the Car Internet Research Program (CIRP) of the University of Ottawa, Canada. In total, more than 8,000 consumers were surveyed in eight countries: Brazil, China, France, Germany, India, Russia, United Kingdom and the United States. Fieldwork was conducted in June and July 2011. All consumers surveyed were in the market for a vehicle (25% plan to buy or lease a vehicle within two months; 36% in two to six months; and 39% in seven to 12 months). The composition of the consumer sample in each country was based on projectable national samples representative of the in-market vehicle-buying population in terms of region, age and gender.Cars Online 11/12 5
  6. 6. Developing Markets: LocalizationRemains Key to Growth “Looking ahead five years, all vehicle transactions can be made Much attention has been placed on developing markets because they represent a key to current and future growth for the automotive industry. Understanding the dynamics of these markets is essential to success. The Cars Online research demonstrates that consumers in developing markets with the help of mobile or However, significant risk/reward behave quite differently from those in challenges exist in these markets. mature markets. smartphones compared On the reward side, sales potential is ” with today. high. On the risk side are logistics, Demanding Consumers Indian consumer infrastructure and bureaucratic Characterize Developing challenges, as well as cultural Markets differences, complex tax structures, Car buyers in developing markets and political and regulatory obstacles. continue to be more demanding in a number of respects than their While automotive companies are counterparts in the mature markets. focused on building their business in For example, they are less willing to the developing markets, consumers travel to purchase a vehicle. Only point to a potential downside of the 44% of respondents in developing rapid growth. Noted a respondent markets will travel more than 10 from China: “Soon it may be more miles, compared with 64% of those in difficult to buy a car because there will be mature markets. The difference is even more cars on the road to create heavier more pronounced in China, where just traffic problems, so there could be more 23% of consumers will travel more restrictive policies for purchasing a car.” than 10 miles to buy a car. Consumers in the developing marketsWillingness to Travel to a Dealership (% saying) also expect especially fast response 100% times to e-mail and website inquiries. Sixty-seven percent of respondents 16 22 from China expect a response within 30 29 four hours and 43% would like a 80% More than 20 miles response within one hour, compared 11-20 miles 28 22 with the all-market average of 51% 5-10 miles and 28%, respectively. Similarly, 61% 60% Less than 5 miles of consumers in Russia and Brazil 35 35 expect a response within four hours and about one-third would like a 40% response within one hour. 42 44 Said a consumer from India: “I would 20% 29 28 like to be able to get an immediate response from a dealer when I make a 14 12 request for information and other details 6 8 about vehicles.” 0% Mature Mature Developing Developing Markets Markets Markets Markets 2010 2011 2010 2011 Consumers in developing markets differ from those in mature markets inSource: Capgemini a number of additional respects.6
  7. 7. Automotive the way we see it Required Speed of Response from Manufacturer/Dealer to Consumer Query – Less than 4 Hours (% saying) 80% 71 67 67 62 61 61 61 61 60% 57 56 55 52 2008 51 51 50 49 48 2009 47 46 45 44 43 43 43 43 43 2010 40% 40 41 39 37 2011 34 34 33 31 28 29 20% 0% All Markets U.S. U.K. France Germany Russia Brazil India China Source: CapgeminiType of vehicles: New cars remain However, this is trending downward of respondents said they wouldthe dominant choice in most of the and is likely the residual effect of consider a vehicle-sharing program;developing markets, where the used the tax incentives previously given in Brazil the number was 65%; andcar business exists only on a small to Brazilian consumers for buying in India, 52%. In comparison, 37%scale (with the exception of Russia). cars online. In India, consumers can of consumers overall were interestedIn addition, the distribution of vehicle now buy vehicles from the website of in vehicle sharing. As with onlinetypes spans a narrower spectrum their financial services provider. With buying, the traditional approach toin the developing markets, where this model, they may get preferential buying a car is not entrenched in thefewer classes of vehicles are available. rates as well as a less cumbersome developing markets as it is in matureHowever, this is gradually changing as loan application process as the bank regions and so consumers are morenew models are being introduced in already has the necessary data to willing to consider alternatives.markets such as China and India. process the loan. Technical features of vehicles:Online buying: Most of the New buying approaches: Consumers in developing marketsdeveloping markets are particularly Respondents in the developing are more interested in the technicalinterested in purchasing vehicles, markets show greater interest aspects of the vehicle such asparts and accessories online. Brazil in alternatives to the traditional horsepower, performance and in-in particular stands out, with 67% of buying model, including mobility car systems. For example, 90% ofrespondents saying they would like packages, vehicle-sharing and ride- respondents from Russia and Chinato buy a vehicle over the Internet. share programs. In China 72% and 83% of those from India citedCars Online 11/12 7
  8. 8. this as an important factor in their key driver for vehicle sales, with choice of specific vehicle, compared China having a more developed road with 68% in the U.K. and France. network than India. On the other Said a respondent from India: “The hand, India’s political environment “ biggest things I look for in a car more and its positive view of foreign I want to buy more and more are new technology features investment are factors that bode well environmentally friendly, like GPS navigation systems, rear images for the country’s future automotive for backing up and automatic sensing of markets. new energy vehicles, potential accident situations.” such as electric vehicles Differences are also apparent in or other clean energy Income spent on vehicles: consumer behavior. Indian consumers Consumers in developing markets are are more likely than those in China vehicles. But I hope to be likely to spend a higher percentage to purchase a smaller, lower-cost able to learn and know of their income on vehicles than their car, while Chinese consumers are more so I have all the counterparts in the mature regions. more interested than their Indian For example, in China only 22% counterparts in alternative buying relevant information for a of respondents will spend less than approaches like vehicle sharing. ” purchase. one-quarter of their annual income Chinese consumer to purchase a car; by comparison, In many respects, Russia continues 41% of U.S. consumers will spend to resemble the mature markets more that amount. This is perhaps not than the other developing countries. surprising as cars are relatively more For example, Russian consumers are expensive and incomes are typically more likely to buy a used car than lower in the developing markets. those in other developing markets and are somewhat less interested in Localization Is Key to Success online buying of vehicles, parts and While certain trends are common accessories. across the developing markets, variances exist among the different countries. Local insight is particularly important in the developing markets as conditions often evolve rapidly. Take China and India, where a number of factors differentiate the two markets. For example, while vehicle sales in China have exploded in recent years, the growth in India has been steadier with many industry observers waiting for the market to take off. And China’s vehicle market is still much larger overall than India’s although the population of the two countries is similar in size. Some point to the differences in infrastructure as a8
  9. 9. Automotive the way we see itShopping Behavior: ‘No More TireKickers’One of the positive signs from this Intention to Acquire New vs. Used Vehicle (% saying)year’s study is an increase in the 100%number of consumers planning to buy 8 2 2 2 2 10 10 9a new – rather than used – vehicle, 12 12 14 10especially in the mature markets.In all four mature markets (France, 80% 26 30Germany, U.S. and U.K.) the number 33 31 Undecidedof intended new car buyers increased Usedby several percentage points, while 60% Newthe number of intended used carbuyers declined. This may represent 86 86 84 88a response to the many new vehicle 40% 66models and quality improvements 57 59 61made by manufacturers. 20%Not surprisingly, the overall numberof new car buyers remains higher inthe developing markets due to the fact 0%that the used car market is relatively Mature Markets Mature Markets Mature Markets Mature Markets Developing Markets Developing Markets Developing Markets Developing Marketsundeveloped in these regions where 2008 2009 2010 2011 2008 2009 2010 2011many consumers are first-time buyers. Source: CapgeminiThis year’s findings indicate a movetoward smaller cars, with consumersciting cost, fuel efficiency and Likelihood to Purchase Smaller/Lower-Cost Car (% saying likely/very likely)environmental concerns as the key 100%factors. In fact, consumers acrossmost of the markets reported a greaterlikelihood to buy smaller cars this 13year, perhaps reflecting the uncertain 80% 2010 2011economic situation and volatile fuelprices, as well as the introduction ofnew models. In the U.S., for example, 60% 7759% of respondents said they were 69 67likely or very likely to buy/lease a 62 59smaller car, up from 40% the prior 56 56 56year. Similarly, 52% of consumers in 40% 52 50 47the U.K. said they were likely to buy 46 45 40a smaller vehicle, compared with 35% 35 37 33 32the previous year. Overall, consumers 20%in Brazil and India were the mostlikely to buy smaller cars. In India thederegulation of fuel prices and thesubsequent sharp rise in the price of 0%gasoline in the past year are driving All Markets U.S. U.K. France Germany Russia Brazil India Chinaconsumers to smaller vehicles. Source: CapgeminiCars Online 11/12 9
  10. 10. Vehicle Buying Cycle Continues to Shrink (% saying) How long before your planned vehicle purchase/lease How long before your planned vehicle purchase/lease did/will you begin to research vehicles? did/will you visit a dealership showroom? 40% 40% <2 weeks 2 weeks-1 month 30% 30% 1-2 months 30 30 31 2-4 months 20% 24 20% 4-6 months 17 6-12 months 19 10% 13 10% 13 7 7 6 3 0% 0% All Markets All MarketsSource: Capgemini Buying Cycle: ‘Tire Kicking Is respondents had decided on one “ Being Done Online’ vehicle make, compared with about There is a trend Regardless of their intentions to buy 10% in the earlier stages of the buying new or used cars, consumers spend cycle. towards minimization of less time shopping for vehicles today. personal interactions with In particular, consumers are waiting Evidence of the shrinking buyingdealers during the process until the final weeks before purchase cycle can also be found in the results to visit dealerships. Forty-three focused around the type of channel/ of buying cars. I think this device that consumers use at different percent of respondents won’t visit trend will become more a showroom until a month prior to points in the research process. Dealer ” prominent. purchase, compared with 39% the visits to the showroom are low until previous year. The bad news is that the final weeks before purchase. For Russian consumer this reduces the opportunities to example, at six to 12 months from interact with customers face to face. purchase, only 15% of consumers The good news is that those who said the dealership is their preferred visit the showroom are serious, not channel for gathering information. just curious. “I expect to have my mind Within two weeks of purchase, that pretty much made up by the time I go number grows to 58% of consumers. to a dealership for a test drive,” said a consumer from the U.S. Consumers Use Wide Range of Devices for Research As the buying cycle continues to The rise of tablets and smartphones shrink, dealers must take advantage for information gathering was evident of every face-to-face interaction since this year in both the quantitative and one chance may be all they get. As qualitative data. “I’d like to buy a car one industry observer noted, “Today using my tablet and be able to see models there are no more tire kickers. All the tire with all the specifications I want,” said a kicking is being done online, not in the Brazilian respondent. dealer lot.” Use of tablets and smartphones The research makes it clear that two was highest between one and four weeks from purchase is a critical months before purchase: About 20% tipping point, as this is when many of respondents said their mobile/ buyers narrow down their search to smartphone was their preferred one final make and model. Within channel for gathering information two weeks of purchase, 32% of during this period; 15% of consumers10
  11. 11. Automotive the way we see itpreferred their tablet computer during ■ In the U.S. consumers arethis phase of the buying process. particularly likely to prefer theWhen researching, consumers were dealership for gathering informationinterested in smartphone applications in the last two weeks.such as scheduling a test drive, ■ Brazilian respondents indicate moreconfiguring a vehicle and visiting a even distribution across the differentvirtual vehicle showroom. research channels, compared with other markets.“I think in a few years most things will be ■ In Russia consumers report higher-done using smartphones and buying a car than-average use of desktops andwill probably be as simple as looking for laptops all the way through thea car on your mobile phone, then going research, shopping and buyingto the dealer to look at it and completing process.the transaction (paying for it) using your ■ In France, consumers werephone,” said a U.K. consumer. somewhat more likely than theirAs with many of the research findings, counterparts to visit the dealer earlierthe devil is in the details, with in the buying cycle.noticeable variances by market thatneed to be considered. For example: Once consumers enter the showroom,■ Preference for mobile or smartphone they are interested in finding a variety is higher than average in China and of additional services, especially India during the full buying cycle. vehicle accessories for sale (cited by 51% of respondents), car care tips Preferred Research Device/Method (% saying) 6-12 months before purchase 4-6 months before purchase 2-4 months before purchase 70% 70% 70% 60% 60% 60% 50% 50% 50% 51 48 50 40% 40% 40% 30% 32 30% 30% 20% 20% 24 20% 21 18 17 15 14 15 10% 10% 14 13 10% 11 10 10 9 7 0% 0% 0% All Markets All Markets All Markets Desktop or laptop computer Tablet computer 1-2 months before purchase 2-4 weeks before purchase Up to 2 weeks before purchase Mobile or smartphone 70% 70% 70% Landline phone Dealer visit 60% 60% 60% Not applicable 58 50% 50% 50% 50 47 40% 40% 43 40% 30% 33 30% 30% 34 20% 20% 20% 20 20 16 18 16 17 10% 14 12 10% 10% 13 11 11 10 0% 0% 0% All Markets All Markets All Markets Source: CapgeminiCars Online 11/12 11
  12. 12. Use of Information Sources to Research Vehicles (% saying) Information Source All Markets U.S. U.K. France Germany Russia Brazil India China Car dealer (both new and used cars) 49 52 58 56 58 52 25 51 33 Vehicle manufacturer websites 44 51 48 37 47 55 26 44 41 Search engine 43 42 49 36 40 59 20 45 43 Dealer websites 42 49 53 36 44 53 24 38 37 Family and friends 40 30 40 28 36 51 27 50 46 Information websites/independent car 30 40 31 23 36 40 19 33 34 valuation services Specialist motoring/automotive press 30 17 28 31 34 50 17 22 43 Top information Auto shows 27 14 13 22 22 39 24 38 46 sources TV advertising 27 24 21 20 16 28 27 44 30 Internet news sites 26 19 21 21 15 33 25 40 32 Web forums, blogs, Internet discussion groups 25 18 17 18 20 47 16 22 43 Independent e-tailer sites 25 16 17 21 43 40 16 13 33 Car dealer (used cars only) 22 22 29 22 28 22 14 22 13 Print advertising 20 23 17 14 13 30 18 27 15 Manufacturer/dealer social media site 19 14 16 16 7 26 15 28 32 Multiple responses allowed Source: Capgemini(50%), newspapers/magazines (37%) sophistication and increasing options consumers in the mature markets useand an Internet café or wireless access available on dealer sites. In addition, TV advertising when they research(36%). Of less interest are: having dealer social media sites often drive vehicles.a children’s play area, TV/movies traffic to their corresponding websites.available for viewing, food for sale or The use of search engines, and web Interest Grows in Alternativemusic listening stations. The pattern forums, blogs and discussion groups Buying Modelswas quite similar across all markets. also rose this year. In a continuation of a trend identified last year, consumers express a growingWeb is Key Source for Vehicle Among non-web-based sources, willingness to consider new, non-Information TV advertising posted gains in the traditional approaches to vehicleDuring the research process developing markets, particularly buying and ownership. Almost half ofconsumers turn to a wide array of India (cited by 44% of consumers, respondents would look at a mobilityinformation sources, but increasingly compared with the average of 27%) package as an alternative to traditionalweb-based sources dominate. This and China (30%). This finding buying/leasing of a vehicle and nearlyyear saw a rise in the number of indicates that building brand 40% would consider a vehicle-sharingrespondents saying they use dealer awareness via TV remains vitally or ride-share program. A mobilitywebsites during the buying process, important in newer automotive package typically provides accessperhaps reflecting the growing markets. In contrast, only 21% of to a wide range of vehicles, services12
  13. 13. Automotive the way we see itand accessories that can be used as Likelihood to Consider Alternative Buying Approaches (% saying likely/very likely)needed by the consumer for a fixed Vehicle-Sharing Program Mobilty Package Ride-Share Serviceprice and a specified time frame. This 100% 100% 100%developing trend may reflect a gradualshift from products to services; fromtraditional vehicle ownership to 2010 2011 2010 2011 2010 2011“power by the hour.” 80% 80% 80%“I think that the future will be short-term 64hire of a vehicle,” said a U.K. consumer. 60% 60% 60%“It is simply going to become far too 56 53impractical to own a vehicle.” 49 52 49 40% 40% 40%A respondent from Germany agreed,expressing a growing sentiment 28among consumers: “I would like to pay 23 20% 20% 24 20%a certain amount to a manufacturer, and 21 17 15use a car from them for a certain periodof time and then return it to any of theirdealers – car-sharing, so to speak.” 0% Mature Developing 0% Mature Developing 0% Mature Developing Markets Markets Markets Markets Markets MarketsThe interest in new buying modelswas particularly pronounced in Source: Capgeminideveloping markets (excluding Russia)and among younger consumers.Half of respondents age 18 to 34 and depending on their needs at that safety, reliability, price and interior/would consider a mobility package, time. Participants open an account exterior styling. This year was nocompared with 34% of consumers 50 online and get credits that are debited exception. As in the past, all theor older; 42% of younger consumers from the account when they rent a elements tend to matter somewhatwere interested in vehicle sharing, vehicle. more in the developing markets thancompared with 26% of those 50 or in the mature regions, no doubt dueover; and 44% of younger consumers In addition, vehicle manufacturers to the inexperience of buyers in thosewould consider ride-share programs, including Ford, Daimler, VW and developing regions.as compared to 27% of older BMW are involved in vehicle-sharingrespondents. services. And the Hertz On Demand Aftersales servicing has gained ground program enables consumers to rent in the past year. Aftersales was rankedIf this trend continues it could lead a vehicle when they need it, without the fourth most important factorthe industry to consider alternative membership fees. in selecting a vehicle this year (tiedbusiness models. Recognizing the with interior/exterior styling and fuelpotential impact of this change, some Vehicle Choices: What Matters economy), up from seventh positioncar rental companies and vehicle Most the prior year.manufacturers are testing models like When consumers finish theirmobility solutions and vehicle sharing. shopping and decide to buy, thePeugeot, for instance, launched key factors that influence their finalits “Mu by Peugeot,” which allows decision come down to the intrinsicconsumers to rent a vehicle, scooter, elements of the vehicle and whichbike or accessory whenever they want have been consistent for many years:Cars Online 11/12 13
  14. 14. The Role of the Web: Internet UsageExpands Into New AreasInternet is Dominant Research Tool (% of consumers saying they use the Internet as an information; and mobile web growthinformation source during the vehicle buying process) during the buying cycle and post-sale as consumers look for vehicle-related 100% smartphone applications. 80% What Consumers Want From the Web Price and product information 60% continue to be the primary web features consumers look for when they research vehicles. Additional 40% options high on the list include the ability to compare vehicles and the 20% ability to get guidance and advice over the web. 0% Some consumers said they would like 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 to get further price-related information such as usage costs during ownership.Source: Capgemini Noted a French respondent: “You are given lots of information on the web about the car and the purchase price when you Just when we thought the use of the buy it, but what about the real costs to web during the vehicle buying process drive the car over a year according to had hit a saturation point, it grows a various usage models?” bit more. One of the most pronounced trends in car buying behavior over the Influence of Social Media Grows past decade has been the increased dependency on the Internet during Consumers are increasingly expanding the research process. This year the their web usage during the research number of consumers using the web process to include social media, edged upwards to 94% overall. particularly in developing markets. Among the tools consumers turn to The increased role of the web are dealer and manufacturer social was driven in part by gains in media sites, automotive blogs and the developing markets. More discussion groups, informational/ importantly, the use of the encyclopedia sites, personal and Internet has expanded professional social networking sites, into areas such as: video- and photo-sharing sites and online buying of social messaging/micro-blogging sites. vehicles, parts and accessories; China reports especially high use growing reliance across most types of social media sites. on social media This likely reflects overall gains in and user-generated Internet penetration in the country, content as a source as well as growing interest in sites for vehicle and dealer such as Weibo, a China-based micro-14
  15. 15. Automotive the way we see itblogging site that claims to have Use of Social Media and Other Online Tools (% saying)140 million users. Dealer or manufacturer social media sites 31 43 28Consumers are turning to social Third-party automotive discussion group/forum 42 24media for opinions and reviews about None of these 2 23specific car brands/makes and dealers, Third-party automotive weblog 33 19discussions with other consumers, Informational/encyclopedia site with user-generated content 31 16special deals or offers, discussions Personal social networking sites 28 13with automotive experts, helpful hints Online video site/video-sharing service 31about vehicles and news about new Professional social networking sites 12 24vehicles. The content that consumers Photo-sharing sites 9 26find on these sites can be influential in Mobile phone applications/advertisements 9 18their buying decisions: 71% said they Social messaging/micro-blogging services 8 23would likely purchase a vehicle from a Social bookmarking sites 8 16 Mature Marketsparticular car manufacturer or dealer RSS feeds 7 12 Developing Marketsif they found positive comments Other 1posted about that vehicle make/brand, 0% 10% 20% 30% 40% 50%manufacturer or dealer; and 51% saidthey would be less likely to buy a Multiple responses allowed Source: Capgeminivehicle from a particular manufactureror dealer if they found negative Influence of Positive and Negative Comments on Buying Decisionscomments posted on social media (% saying likely/very likely)sites. Both findings highlight the 100%increasing importance of managing,monitoring (by vehicle brands/ Positive Comments Negative Commentsmodels, themes, positive/negativesentiment, purchase intent, consumer 80% 81 13 83 78 78demographics, etc.) and analyzingsocial media content. 71 71 68 67 60%Said a Russian respondent: “I will not 59buy a car that is not liked by my friends 51 54 52 54 50 50and relatives and doesn’t have the largest 45 44number of positive comments on the 40% 42Internet.”Growing Focus on User- 20%Generated ContentIncreasing usage of social mediaisn’t surprising given the importance 0%consumers place on user-generated All Markets U.S. U.K. France Germany Russia Brazil India Chinacontent during the vehicle buyingprocess. Nearly three-quarters of Positive comments: “For those online social media tools that you expect to use when researching your vehicle purchase, howrespondents say it is important to find much more likely would you be to purchase a vehicle from a particular car manufacturer or dealer if you found positive comments posted about that vehicle make/brand, manufacturer or dealer?”user-generated content on dealer and Negative comments: “For those online social media tools that you expect to use when researching your vehicle purchase, how much less likely would you be to purchase a vehicle from a particular car manufacturer or dealer if you found negative commentsmanufacturer websites, up from 65% posted about that vehicle make/brand, manufacturer or dealer?” Source: Capgeminithe prior year. The results were highestCars Online 11/12 15
  16. 16. in the developing markets. This to find owners who would be experiencing seems to point to the importance the same driving conditions as you.” of including both subjective (consumer reviews and In the U.S., many automotive-related opinions) and objective websites, such as Edmunds.com information (price and and AutoTrader.com, include user- product specifications) generated content and reviews to help on websites. their online customers with vehicle buying decisions. On AutoTrader’s site This sentiment was evident consumers can read a consumer or in the qualitative data, such as this expert review, write a review or watch comment from a consumer from the a video review. U.S.: “The input from average users/ owners posting on social websites and manufacturer websites and the ability to ask questions and obtain answers, interact with those individuals on those sites is a bigger factor in my decision than previously. One feature that would be helpful would be a way to sort owners’ posts by general location or state in order Importance of User-Generated Content on Dealer and Brand Sites Grows (% saying important/very important) 100% “ 2010 2011 I will continue to get 83 83 83 information over the 80% 79 78 80 81Internet, especially through 73 69 forums and also opinions 65 65 67 60% 62 61 of other web users who 60 57 54 own the car in which I am ” interested. 40% 39 French consumer 20% 0% All Markets U.S. U.K. France Germany Russia Brazil India China Source: Capgemini16
  17. 17. Automotive the way we see itOnline Buying: Latent DemandStrengthensConsumer interest in buying vehicles,parts and accessories over the Internet(the complete transaction, exceptdelivery of the vehicle) continuesto grow despite the fact that thecapability remains scarce in mostmarkets. In this year’s study, 42% ofconsumers said they were likely orvery likely to purchase a vehicle overthe Internet, up from 37% two yearsago. That translates into millions ofpotential transactions. Consumers indeveloping markets are particularlyinterested in online buying and arequite willing to consider this new typeof purchase model. Likelihood to Purchase Vehicle Over the Internet (% saying likely/very likely)100% 2009 2010 2011 84 80% 75 67 60% 63 57 53 52 49 42 40% 41 37 35 34 33 32 29 30 30 28 28 29 23 23 21 22 20% 21 19 0% All Markets U.S. U.K. France Germany Russia Brazil India China Source: CapgeminiCars Online 11/12 17
  18. 18. Primary Reason to Purchase Vehicle Over the Internet (% saying) Expect price discount Do not want to interact in person with dealer Do not want to negotiate price in person with dealer Ease and speed of transaction Ability to purchase vehicle that is not available locally Do not want to be talked into buying something I do not want Nearest dealership is too far away Other 50% 46 43 40% 38 36 35 30% 35 35 35 35 29 28 28 23 20% 18 13 15 10% 11 11 11 12 11 9 8 9 10 7 8 5 2 0 4 1 1 5 5 1 0 6 4 2 0 2 0 3 0% All Markets U.S. U.K. France Germany 50% 44 40% 39 35 33 34 30% 25 26 25 20% 15 14 12 13 10% 12 12 9 10 9 4 1 0 5 1 0 4 5 4 0 3 1 0 2 3 0% Russia Brazil India ChinaSource: Capgemini New car buyers and younger This has remained consistent over consumers are also especially the past few years, although price interested in online vehicle buying. is a somewhat stronger factor in Almost half of intended new car the mature markets. Germany is buyers said they would consider particularly focused on price, with buying a vehicle online, compared 46% of consumers identifying it as the with 27% of used car buyers. Among primary reason to buy a car online. the 18-34 age group, 43% would like to buy a car online, as compared to “I’ve bought my last two new vehicles 36% of those 50 or older. over the Internet and expect to do the same in the future. The big thing I’d like Price Drives Online Buying to see is having one price, doing away Price discount along with ease and with negotiation and haggling, which I speed of transaction are cited by find to be both distasteful and unpleasant. consumers as the main reasons to I don’t mind if I never have to talk with a purchase a vehicle over the Internet. car salesman again,” said a respondent from the U.S.18

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