14 Jul, 2020, 08:01 ET
NEW YORK, July 14, 2020 /PRNewswire/ --
- Enticing shell-shocked U.S. consumers into the new vehicle market post-recession will be hard-fought as 37% of U.S. respondents are delaying large purchases.
- Nearly half of U.S. consumers (47%) plan to keep their current vehicles longer.
- There is increased consumer anxiety around shared mobility options with 56% planning to limit the use of U.S. public transit during the next three months.
Why this matters
With U.S. figures staying worryingly consistent since April, consumer distress regarding near- and longer-term financial well-being may outlast current health concerns, directly impacting the automotive supply and demand chain. According to Deloitte's study titled "How the pandemic is changing the future of automotive," U.S. consumers are rethinking their relationship with personal vehicles, digital transactions and transportation, including mobility services. The growing use of digital tools could be supportive of overall demand, but a growing affordability issue may cause consumers to stay out of the market longer than expected. At the very least, consumers may be recalibrating their expectations relative to which new vehicle segment and/or option package they can afford.
As a global health crisis starts to morph into an economic one, Deloitte is conducting a series of biweekly surveys around the globe to better understand the interplay between personal safety and economic vulnerability as a driver of purchase decisions and consumer behavior. The multi-wave "Deloitte State of the Consumer Tracker" first launched on April 19, 2020, draws insights from over a dozen countries and queries 1,000 consumers in each market — with insights available on an interactive dashboard.
Financial well-being is shaping relationships with personal and public transportation
- Financial concerns in the face of a potentially lengthy recession magnified: 37% of U.S. consumers are delaying large purchases, such as a new car, and 21% are worried about making upcoming payments.
- Job security anxiety still lingers: 30% of currently employed U.S. consumers are fearful they will lose their job; this number is even higher across the globe, including Chile (74%), India (71%) and Mexico (65%) which are even more worried about a potential loss of employment.
- Consumer pullback impacts their vehicle ownership: 47% of U.S. consumers are planning to keep their current vehicle longer than expected. This trend also can be seen in other large automotive markets around the globe including China (65%), Japan (48%) and Germany (40%).
- Near term vehicle expenses on delay: 25% of U.S. consumers are putting off regular vehicle maintenance, and it is even higher in other parts of the world with nearly 8 in 10 consumers in India actively redeploying funds originally slated for vehicle maintenance, followed by Chile (45%), China (43%) and Mexico (41%).
- Whether fully digital vehicle sales will be prevalent, remains to be seen: Most consumers are not looking to buy their next vehicle online. Other than India (71%) and China (45%), interest in a fully online purchase process is limited to 1 in 4 consumers or less in other markets around the world.
"Automotive companies should maintain manufacturing discipline, focusing on the vehicles consumers want to buy. Exploring strategic partnerships will also be increasingly necessary to maintain key innovation programs while deploying enhanced digital capabilities to identify and prioritize critical cost-saving opportunities. Clearly, industry stakeholders that can use this situation to significantly restructure their operations will likely be in the best position possible to thrive going forward."
- Joe Vitale, principal and global automotive sector leader, Deloitte Consulting LLP
"Although the full impact will remain unclear for several months, the global automotive sector was already experiencing a downshift in demand. As the focus of public concern continues to shift from health to financial well-being, understanding how consumer expectations are changing will be critically important for auto companies to remain engaged. Moreover, there is a clear need for industry stakeholders, including manufacturers, suppliers, retailers, financial institutions and governments, to come together in a focused dialogue to understand exactly what actions are needed to tackle the incredibly complex issues faced by the sector and get the global automotive engine running smoothly again."
- Karen Bowman, vice chairman, Deloitte LLP and U.S. automotive sector leader
Are consumers changing the way they think about mobility?
- Lingering health concerns make the idea of owning a vehicle very attractive: 74% of U.S. consumers agreed that the idea of vehicle ownership is valuable to them. This trend is being seen globally, including France (79%), UK (69%) and South Korea (63%).
- Personal vehicles serve as a way to maintain physical health barriers: Over half of U.S. respondents plan to limit public travel, including rideshare services for the next three months. For those in the market for a new vehicle, used vehicles may give cash-strapped consumers an interesting option to consider.
- For those consumers that remain intent on acquiring a new vehicle, expectations may shift in terms of either downgrading to a more affordable vehicle segment, and/or reducing the number of features included on the vehicle.
Connect with us on Twitter at @DeloitteCB or on LinkedIn @JoeVitale @KarenBowman.
About the Center
Deloitte Consumer Industry Center provides a forum for innovation, thought leadership, groundbreaking research and industry collaboration to help companies solve the most complex industry challenges.
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