Automakers continue to grapple with the consumer fallout from the pandemic.
Like the tendency to grab our favorite old sweater or want to eat a standby comfort food, car buyers are also drawn to familiarity and affordability, with the majority (74%) of U.S. buyers looking for a traditional internal combustion engine in their next vehicle rather than an electric vehicle.
Just one-quarter (26%) of U.S. consumers are considering alternative engine solutions for their next vehicle, down 15% year-over year.
These findings fly in the face of announcements last week by General Motors and Kia, who announced the aim to try to make electric vehicles more appealing to the masses.
While the long-term trend towards electric vehicles continues to solidify, consumer anxiety amid the pandemic may be shifting automotive priorities, according to Deloitte’s 2021 Global Automotive Consumer Study.
This year’s report explores opinions from more than 24,000 consumers in 23 countries and provides insights on a variety of issues impacting the global automotive sector. In addition to including the pandemic's implications on consumer perceptions, the report also addresses the development of advanced technologies and the impact of digital automotive retail platforms.
Before the transportation torch is officially passed from internal combustion engines (ICE) to electric powertrains, consumers require greater assurance about mileage, robust charging infrastructure rollouts and the affordability of the electric segment, according to the report.
While the pandemic continues to play a large role in exacerbating this apprehension, stricter carbon emission regulations on the horizon point to a “closing window” for the traditional ICE segment experience.
Financial concerns and uncertainty, driven by COVID-19, continue to impact both consumer mobility and the overall global automotive sector.
Continued financial concerns are affecting vehicle ownership across the globe. Consumers in many markets are rethinking not only when they will be buying their next vehicle but also what type of vehicle they will buy next. As affordability concerns increase, a growing number of people are deferring vehicle loan/lease payments, with some intending to acquire a less expensive vehicle than originally planned.
Vehicle payment deferments are also raising some concern across the globe. One in 10 Americans (10%) opted to defer their automotive payment in 2020, but that rises to 23% among consumers aged 18-34.
Timelines for acquiring their next vehicle vary greatly around the globe, with 66% of U.S. consumers remaining on initial timelines.
While online automotive sales have risen in popularity globally due to the pandemic, a surprising 71% of U.S. consumers still want the in-person experience moving forward. Again, the dealership visit might be a case of “the devil we know.”
Having the ability to see the car in-person remains a major deterrent for fully virtual sales noted by 75% of U.S. consumers. Similarly, almost two thirds (64%) of U.S. consumers listed the lack of physical test drives as a deterrent to a fully virtual transaction.
Unlike many other retail sectors that have seen a wholesale shift to online buying, purchasing a vehicle remains a largely personal experience for many consumers, says Karen Bowman, vice chairman, Deloitte LLP and U.S. automotive sector leader
“However, some people will be looking for a virtual sales experience to maximize convenience, speed and ease of use,” Bowman says in a release. “This will likely result in a more complicated, and potentially costly, set of consumer expectations for dealers to meet at a time when businesses are looking to recover and thrive in the wake of the pandemic.”