top of page
Writer's pictureInsightTrendsWorld

Insight of the Day: Tracking consumer trends in the automotive industry

  1. Vehicle Electrification:

    • Trend: Interest in electric vehicles (EVs) is slowing due to high-interest rates, sticker prices, and persistent concerns like range anxiety and charging infrastructure availability. Automaker price cuts and government incentives have had limited impact in some markets.

    • Consumer Shift: Some markets are seeing a rebound in interest for Internal Combustion Engine (ICE) vehicles as consumers prioritize affordability over environmental considerations.

  2. Future Vehicle Intentions:

    • Trend: Price, product quality, and performance are key factors influencing brand choice, but these priorities differ by region. Developed markets such as Germany, Japan, and the U.S. are more price-sensitive, while performance and quality drive choices in markets like China, South Korea, and India.

  3. Connectivity:

    • Trend: While there is strong interest in connected vehicle features (e.g., maintenance updates, traffic safety), consumers in developed markets are less willing to pay extra for them. Developing markets, particularly India, China, and Southeast Asia, show greater willingness to pay for connected services.

    • Willingness to Pay: Developing markets lead in willingness to pay for connected technology (India 71%, China 60%), while developed markets like the U.S. (25%), Japan (23%), and Germany (20%) lag behind.

  4. Vehicle Subscriptions:

    • Trend: Younger consumers, especially in markets experiencing financial uncertainty, are increasingly open to subscription-based models instead of traditional ownership. However, concerns about vehicle availability, costs, and high monthly fees remain barriers.

    • Consumer Interest: Among 18-34-year-olds, interest in vehicle subscriptions is growing as economic pressures prompt a reconsideration of the necessity of vehicle ownership.

Consumer Motivation:

  • Affordability: Across markets, price remains a primary consideration, particularly in developed economies. Consumers are also concerned about high costs of EVs and vehicle subscriptions.

  • Convenience & Innovation: Younger consumers are drawn to vehicle subscriptions and connected vehicle features, although they hesitate to pay a premium for them in developed markets.

Drivers of Trend:

  • Economic Factors: High-interest rates, inflation, and affordability challenges drive consumer hesitation regarding EVs and new vehicle ownership models.

  • Technological Preferences: Connectivity features and flexible vehicle ownership models appeal to tech-savvy younger generations, especially in developing markets.

Who are the People?:

  • Consumers: Globally diverse, with varying interests based on age, market conditions, and technological preferences. Younger consumers (18-34) are more open to innovative vehicle ownership models like subscriptions.

Product or Service:

  • Vehicles: Both electric and internal combustion engine vehicles, with increased interest in connected technology and flexible ownership models (e.g., vehicle subscriptions).

Conclusions:

  • For Brands: Automakers must focus on affordability and performance to appeal to different consumer segments. Brands should also consider regional variations in connectivity and subscription service interest.

Implications:

  • For Brands: Automakers must balance innovation (e.g., connectivity and EVs) with affordability, particularly in developed markets where price sensitivity is high. Offering vehicle subscriptions may resonate with younger consumers.

  • For Society: Slowing EV adoption could hinder decarbonization goals, while flexible vehicle ownership models may reduce the overall number of vehicles on the road, potentially easing congestion and emissions in urban areas.

  • For Consumers: Economic uncertainty is pushing consumers to reevaluate vehicle ownership models, with more flexible options like subscriptions gaining appeal, though price concerns still dominate decision-making.

Implication for the Future:

  • Future Trends: Slower EV momentum may impact decarbonization timelines, while growth in vehicle subscriptions and connected technologies could reshape traditional vehicle ownership models in the long term.

Consumer Trend:

  • Affordability-Driven Decisions: Price remains the dominant factor in vehicle brand choice, especially in developed markets. Consumers prioritize affordability over advanced features and EV adoption.

Consumer Sub Trend:

  • Vehicle Subscription Interest: Younger generations are increasingly questioning the necessity of vehicle ownership, showing growing interest in subscription models despite concerns about costs.

Big Social Trend:

  • Shift in Vehicle Ownership Models: The mobility ecosystem is seeing a shift toward flexible, subscription-based models driven by younger consumers and changing economic conditions, which may fundamentally alter car ownership in the future.

Comments


bottom of page