A closer inspection into Generation Y’s influence on the automobile industry
Representing one of the largest consumer segments since the Baby Boomers, Generation Y is transforming the global and local automobile market landscape and the way automobile companies are doing business.
Deloitte, Southern Africa, recently participated in the Deloitte 2014 Global Automotive Consumer survey, which focused on the changing nature of consumer mobility, and how the changing nature of mobility will affect the consumer automobile buying and ownership experience.
The survey identified consumer automobile needs and wants. Further insights drawn from the report highlighted the growing power and influence of Gen Y, whereby 80% of these consumers planned or expected to make a purchase or lease a vehicle within the next 5 years. Of those surveyed, Generation Y and X consumer base, represented over 70% of South African participants, which has led to closer inspection of these generations buying patterns.
According to Bronwyn Kilpatrick, Manufacturing Industry Automotive Leader at Deloitte.“The survey’s findings present some complex challenges – and opportunities – for automakers that are desperately trying to better understand and connect with this young, powerful and increasingly influential market force
Emerging Consumer Trends
Some of the emerging trends from the survey:
> 70% of consumers indicated high operational and maintenance cost served as the top reason not to buy a car.
Generation Y identified convenience as key influence on their purchasing decision
Generation Y looks to trusted sources to inform their vehicle purchase decisions.
Gen Y Purchase Motivations
The top reasons for and against vehicle purchases:
|Reason For Vehicle Purchases||Reason Against Vehicle Purchases|
|2)||Affordable Vehicle Finance||Operational Maintenance Cost|
|3)||Fuel Efficiency||Lifestyle meet by public transport|
“What we observe is that Gen Y is more price-sensitive when making their car purchasing decisions. This is interesting to note for vehicle manufacturers, as it indicates that many are looking to value and lower maintenance costs rather than reasons such as aesthetics and status,” says Kilpatrick.
How Gen Y chooses their cars
Given that access to information is readily available to consumers a their finger tips, it is not unfamiliar to find that 89% Gen Y consumers spend more than 10 hours researching and considering other brands when making a purchase decision.
Family and friends make for attractive trusted sources of information when it comes to deciding which vehicle they should be buying, in contrast 49% of Gen Y consumers consulting sales people for vehicle purchase advice and only 26% using social networks to find out more about a particular vehicle.
Gen Y Looking Ahead
Interestingly, it was found that a high percentage of South African Gen Y consumers would consider alternative powertrains, such as hybrid electric, plug-in hybrid and compressed natural gas vehicles for their next vehicle purchase.
Technology also plays a role in how South African Gen Y consumers are choosing to mobilize. 59% liked using smartphone applications to explore transportation options and plan their trips. Furthermore, 51% indicated they would use a ride-sharing application if it were recommended by a family member or friends.
“What this tells us that being part of the connected world is important for SA millennials, and what is important this year may not be important in the next one, which means a constant shift in brand loyalties and values,” says Kilpatrick.
What does this mean for automakers?
Carmakers that are able to influence the consumer buying experience focusing their offering on affordability, convenience and low maintenance cost, will likely win over and influence the younger generations brand loyalty decision.
To download the info-graphic highlighting South African insights click here
If you have any questions or require a more detailed discussion, feel free to contact Karthi Pillay (Deloitte’s Southern Africa Manufacturing Leader) or Bronwyn Kilpatrick (Deloitte’s Southern Africa Automotive Leader)