Impact of Consumer Preferences on the Global Automobile Industry

A product that does not meet the needs of consumers is truly hard to sell. It often fails, because consumers love to use that product daily and resolve a large portion of their problem by using this product. 

Keeping this fact in mind, we acknowledge that consumers’ preferences are highly volatile in this era. Hence, the automobile industry has seen some remarkable changes that we would love to explore today. 

Let’s diagnose the psychology running at play that shapes automobile buying behaviour. Throughout this blog, we shall use the latest statistics and figures that equip us with a deeper knowledge of this evolution. 

 

Statistics on the Customer Shift 

Several opinion polls were conducted on the PollPe app to analyse the statistical shift of consumers. Here are the insightful data snippets: 

 

1. 50.9% of Asian youngsters do not own a personal vehicle. This opens a significant space to advertise and promote vehicles to younger consumers. 

2. ‘Commuter’ motorcycles are much in demand, as responded by 32.3% audience in an opinion poll. 

3. 42.9% of Indian Respondents said that they prefer Public Transport services for daily commutation. 

4. Ride-hailing services have been highly satisfactory in the Indian market, catering to 21.3% of daily commuters. 

5. Convenience and cost-effectiveness are the most important reasons for choosing ride-hailing services. 

6. In another poll conducted by PollPe, it was found that Fuel Efficiency was the primary factor that drove 43% of respondents to consider an automobile purchase. 

7. Indian consumers are very likely to consider Electric Vehicles for their next purchase. 

8. Traditional automakers still rule the automobile market by a gigantic margin. Consumers prefer to buy their vehicles from a trusted company that has a good history. 

 

With these statistics, you can understand that the Asian market is full of opportunities for automobile companies. The emergence of EVs is creating a large diversion in sales, and by 2030, the market will be largely dominated by eco-friendly vehicles. We need to ask, why this shift? What are the reasons that are driving consumers to prefer these new alterations?

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Evolving Needs of Automobile Customers\

Modern consumers have a diverse range of tastes and needs when it comes to automobiles, influenced by various factors like demographics, lifestyles, and environmental concerns. Here are some key trends:

 

1. Environmental Friendliness

Consumers are increasingly interested in EVs due to rising fuel costs, environmental consciousness, and government incentives. Even for non-EV buyers, fuel efficiency is a major consideration due to concerns about affordability and environmental impact.

 

2. Connectivity and Technology

Advanced driver-assistance systems (ADAS): Features like lane departure warning, automatic emergency braking, and adaptive cruise control are becoming increasingly desired for safety and convenience. Integration of smartphones, navigation apps, and infotainment systems is crucial for many consumers, especially younger generations.

 

3. Practicality and Versatility

SUVs and crossovers remain popular: These vehicles offer a blend of passenger space, cargo capacity, and perceived safety, making them suitable for families and various lifestyles.

Increased interest in pickup trucks: Particularly in specific regions, trucks are popular due to their utility and towing capabilities, appealing to both personal and professional use.

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4. Personalization and Style

 

Consumers are increasingly looking for ways to personalise their vehicles, with features like custom paint colours, interior trims, and accessory packages. Design continues to play a significant role, with consumers drawn to vehicles that match their style and preferences.

 

5. Additional factors\

Affordability: Finding the right balance between features, functionality, and budget remains a key concern for many consumers. Safety remains a top priority, with consumers prioritising vehicles with high safety ratings and advanced safety features.

It's important to note that these are general trends, and individual preferences can vary greatly. The specific tastes and needs of a modern consumer will depend on various factors, making the automotive market diverse and dynamic.

 

What are Subscription Models in the automobile market?

Subscription models and shared mobility are innovative approaches to transportation that are reshaping the way people access and use vehicles. Here's a breakdown of each concept. 

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Subscription-based models offer consumers the opportunity to access vehicles on a flexible, subscription basis rather than committing to traditional ownership or leasing. Here's how they work:

 

Monthly Subscription: Consumers pay a recurring monthly fee to access a fleet of vehicles owned by a subscription service provider.

Flexibility: Subscribers can typically choose from a range of vehicle types, makes, and models based on their needs and preferences. Some services even allow subscribers to switch vehicles periodically or as needed.

All-Inclusive Pricing: The monthly subscription fee often covers various costs associated with vehicle ownership, including insurance, maintenance, roadside assistance, and sometimes even registration and taxes.

Digital Experience: Subscription services usually offer a seamless digital experience, allowing subscribers to sign up, manage their accounts, and book vehicles through a mobile app or website.

No Long-Term Commitment: Unlike traditional car ownership or leasing, subscription models typically offer more flexibility, allowing subscribers to cancel or modify their subscriptions with relatively short notice.

Examples of companies offering subscription-based vehicle services include Volvo's Care by Volvo, Porsche's Porsche Passport, and BMW's Access by BMW.

 

What is Shared Mobility in the Automobile Market?

Shared mobility refers to transportation services that allow multiple users to share access to vehicles for short-term use. This can include various models such as:

 

Car-sharing: Car-sharing services allow users to rent vehicles for short periods, typically by the hour or by the minute. Users can locate and unlock available vehicles using a mobile app, use the vehicle for their trip, and then return it to a designated location.

Ride-Hailing: Ride-hailing services connect passengers with drivers through a mobile app. Users can request a ride from their current location to their destination, and a nearby driver will pick them up and transport them to their destination for a fee.

Bike-Sharing and Scooter-Sharing: These services provide users with access to shared bicycles or electric scooters for short trips within urban areas. Users locate available bikes or scooters using a mobile app, unlock them, and then ride them to their destination before parking them at a designated location.

Peer-to-Peer (P2P) Car Sharing: P2P car-sharing platforms enable individuals to rent out their vehicles to others when they're not in use. This allows vehicle owners to earn extra income and provides renters with access to a wider range of vehicles.

Shared mobility services offer several benefits, including cost savings, reduced environmental impact, and increased convenience, especially in urban areas where owning a car may be impractical or expensive.

 

Impact on Automakers

The rise of subscription-based models and shared mobility services presents both opportunities and challenges for automakers. It necessitates a strategic shift towards a more service-oriented approach, leveraging data and technology to cater to the evolving needs and preferences of modern consumers. While the future of car ownership remains uncertain, adapting to these trends will be crucial for automakers to maintain their relevance and profitability in the years to come.

 

1. New revenue streams: Subscription services create recurring revenue streams for automakers, potentially mitigating the risks associated with volatile car sales.

2. Focus on data and user experience: To compete effectively, automakers need to invest in data analytics and user experience design to cater to changing preferences and provide seamless subscription services.

3. Strategic partnerships: Collaborations with established players in the subscription and shared mobility space can help automakers leverage existing infrastructure and expertise.

Challenges and adaptations:

1. Cannibalization of traditional sales: There's a potential risk of subscription services cannibalising traditional car sales, requiring automakers to find a balance between the two models.

2. Adapting production and inventory: The shift towards flexible access might lead to a decrease in overall vehicle ownership, impacting production and inventory management strategies.

3. Focus on service and maintenance: Automakers may need to adapt their business models to offer comprehensive service and maintenance packages for subscription and shared mobility fleets.

 

Consumers have shifted their preferences to eco-friendly and sustainable options in each niche. That’s happening to vehicles, too. If you want to stay ahead of the curve, subscribe to our newsletter and never miss another insight! 

Drop your thoughts in the comments below, and stay tuned to Humann! 

 

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