Only a third of Gen Y consumers (born 1977-1994 feel that they are treated fairly by automotive salespeople and an equal amount would prefer to skip the negotiation process.
Some 36% of Gen Y of consumers agree with the notion: “I would prefer to purchase a vehicle without negotiating with a salesperson,” while 34% agreed with the following: “Automotive salespeople treat me fairly and with respect.”
Gen Y trusts family and friends the most to help them in making a purchasing decision (67%), in second place are car reviews on independent websites (55%), third placed is news articles/media
reviews (41%), followed by manufacturers’ websites (39%), the salesperson at the dealership comes in fifth (34%), and in last spot is social networking websites (22%).
These are some of the findings of a Deloitte survey based on over 1000 Australians – 33% of them ‘Generation Y’ – on their vehicle buying behaviours.
The study – of much interest to car dealers and distributors dealerships – shows some interesting findings from not only Gen Y, but overall every generation.
One key finding shows that the top three factors that will motivate Gen Y consumers to buy are: cheaper vehicles, more affordable and convenient parking options, and more fuel efficient vehicles.
On the other hand the top three reasons why Gen Y won’t buy a car are: lifestyle needs are met by walking or public transport, high operational / maintenance costs, and the affordability of buying a new car.
Almost half of Gen Y consumers in Australia think they will be driving an alternative powertrain five years from now, with strong preference for hybrid electrics, and they are willing to pay more for it. The study also found that, today, 89% of all consumers drive petrol, 8% diesel and 3% alternative powertrains.
More than half of all consumers (54%) feel that there are not enough alternative powertrain options in the market, and two-thirds prefer a broad range of powertrain options in each vehicle model. A total of 68% of consumers agreed with the following notion: “I would prefer that manufacturers offer a range of engine options for each model that they produce.” In this instance 26% remained neutral, and only 6% disagreed with the notion.
The study shows just under two thirds (63%) of Gen Y consumers in Australia are interested in driving but they are not as devoted to their car compared to the other generations, with Gen Y consumers twice as likely than any other generation to abandon their car if costs increase. However, it also shows that Gen Y are more willing to pay more for an alternative powertrain with 44% of Gen Y willing to pay $2000 or more compared to only 36% of any other generation willing to pay $2000 or more.
Gen Y also are also more interested in cockpit technologies than other generations, they want cars that have, ‘features that help or make tasks more convenient (e.g. assisted parking, adaptive cruise control, etc)’ and they want OEM’s to ‘make it easier to customise a vehicle’s technology after purchase/lease’, and want ‘more In-vehicle technology that helps them manage daily activities’.
Research is king, car dealers still not trusted sources
Some findings worth a mention, especially for car dealers, show that, over half (58%) of all consumers spend more than 10 hours researching and more than three quarters consider three or more brands before they purchase or lease a vehicle. 85% of Gen Y researches three brands or more, while 77% of other generations consider three brands or more
An interesting find is that nine out of 10 overall consumers want the vehicle purchasing process to be over and done with quite quickly. For example, Gen Y want ‘info from dealerships in 32 minutes’, ‘want to wait to test drive a vehicle only 27 minutes’, they want’ paperwork and registration done in 35 minutes’, ‘processing financing should only take 52 minutes’, while ‘performing a simple maintenance service should be done in under an hour’.
Gen Y are also far less trusting when it comes to repairs and services with only 55% of Gen Y confident on the dealers’ ability to repair, compared to 68% from other generations. However, 40% of Gen Y consumers are willing to pay for services that make their lives easier, such as having a dealer ‘pick up their vehicle to be serviced and drop off a loaner vehicle’, compared to only 29% of other generations.
Key insights and takeaways from the study:
- 75% of consumers are interested in acquiring a car within the next 5 years
- Improved safety and efficiency technologies are seen as the greatest technology benefits by Gen Y (over cockpit technologies)
- 55% of Gen Y (26% all others) like using a smartphone app to plan transport
- About two-thirds of Gen Y consumers are influenced by friends and family, the most during purchase decisions
The third Deloitte Motor Industry Services study surveyed over 29,000 people worldwide, with Australia accounting for 1000 people. The study, initiated in 2013, focused on “the changing nature of mobility” and how the consumption of mobility affects various aspects of the automobile buying and ownership experience.
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