Autonomous Driving and Micro-Mobility Gaining Ground With Consumers

It has been two years since we released our last report on auto purchase trends. While 2017 doesn’t seem like that long ago, a lot has changed in the automotive industry. Back then, Lyft was still a private company and Bird was a scrappy start-up. Tesla autopilot wasn’t really autopilot, and Ford was still making sedans.

The change in the automotive, and more broadly, the transportation segment since then has been nothing short of amazing. In response to the changes, we’ve released our 2019 Auto Purchase Trends Report which takes a closer look at vehicle purchases, purchase preferences, and the impact of technology on the industry.Our goal is to empower marketers with actionable insights that:

  • Debunk the myth that vehicle ownership is declining
  • Prove that in-person vehicle shopping is still sought after
  • Explore the tipping point for alternative fuel vehicles
  • Distill the impact of ridesharing and micro-mobility (electric scooters) on driving habits
  • Analyze consumers’ comfort levels with autonomous vehicle technologies

To download the full report, click here.

Let’s get into it.

The Death of Vehicle Purchases Among Younger Generations is Exaggerated.

It’s tempting to assume that younger generations are ditching their sedans and hopping on electric scooters and zooming to work or stuffing their tie or high-heels in a backpack and biking their commute. Wrong. Cars are still being purchased. Thirty-five percent (35%) of Millennials are looking to buy a vehicle within the next 12 months. That is statistically more significant than Boomers at 19% and directionally more than Gen Xers at 31%.

Boomers are the least likely out of the age cohorts to purchase vehicles with 39% stating they have no plans to buy or lease a vehicle in the future:

Which takes us back to Millennials, who are thought to be more about experiences and less about ownership, and who typically are, when compared to past generations, more sensitive to environmental concerns, making the purchase of a gas-guzzling, exhaust creating vehicles a violation of their ideals.

But Millennials are buying, not leasing, cars this year, many of which are SUVs (albeit most are compacts like Honda CR-Vs). So, the challenge for auto marketers is to identify that fine line between giving Millennials the experiences they crave and the environmentalism they seek while providing them with automotive ownership opportunities that reconcile both.

The In-Store Experience Matters More Than Ever, But Cash is King

Cars seem to be the only consumer good people insist on purchasing in-person. The last we checked, you couldn’t get one on Amazon (at least not yet!). While many startups like Carvana and Shift hope to change that, online vehicle purchasing is struggling to hit the mainstream. Our data shows that an overwhelming 81% of respondents looking to purchase a vehicle will be doing so in-person. Only 7% stated that they would purchase their vehicle online and 5% via mobile application.

There is an exception, however. At 11%, respondents with incomes of $80K or more are the most likely to purchase their vehicle via a mobile app.

While in-person is still driving most automotive purchases, the in-store experience has been elevated to appeal to the Millennial consumer. According to Automotive News, “…a wave of younger, tech-savvy consumers is forcing companies to rethink how they engage retail customers. Vehicle brands such as Lincoln, Infiniti and Lexus have used immersive technology tools in showrooms to better connect with younger customers. But trend experts contend that simply arming salespeople with tablets and other high-tech gadgets is not enough to close the deal with these new-gen consumers.”

Jody Turner, culture and trends expert from CultureofFuture.com, offers further advice; “You have to do everything today, 360-degree service,” Turner said. “When people come in, it has to have elements of community engagement. It’s not really about the big box [environment]. It’s really about the more intimate community building experiences.”

For marketers, that means thinking beyond showroom banners and posters to gamified showroom experiences that virtually put the buyer in the driver’s seat.

Alternative Fuel Vehicles Reach Tipping Point

More mainstream automotive companies, like Kia, Audi, and Jaguar, are following Tesla’s example of creating fully-electric vehicles. According to our research, their timing couldn’t be better. Forty-two percent (42%) of respondents are either very likely or somewhat likely to consider an alternative fuel vehicle for their next purchase. This is a significant shift from our 2017 study which reported a 56% preference for gas powered engines.

Broken out by ethnicity, Asians and Hispanics are driving the interest in alternative fuel vehicles at 54% and 46% respectively:

More auto manufacturers have plans to roll out fully-electric vehicles in the near future. Despite being industry veterans, even brands like Ford and VW will need to have a solid understanding of what is important to consumer groups like Asians and Hispanics car buyers, that are free of stereotypes, if they are to gain mainstream adoption for their electric cars.

For example, among U.S. Hispanics, Spanish-dominant (56%) and Bilingual Hispanics (49%), are driving alternative fuel vehicle consideration within that cohort. Spanish-speaking consumers have not traditionally been thought of as consumers who would adopt alternative fuel vehicles because they have historically steered toward larger vehicles such as trucks and SUVs. However, their high interest in alternative fuel vehicles makes sense as they are a more value-based consumer and the cost-savings alternative fuel vehicles represent pairs nicely.

For marketers, bilingual campaigns are a given, but the messaging must also factor in the importance of their cultural values and how they interact with the Total Market. U.S. Hispanics don’t live in a silo. Consider an ambicultral approach.

Ride Hailing Services Not Curbing Car Ownership…But Electric Scooter Sharing Is.

Rest easy auto manufacturers. Car ownership is not going away anytime soon. Only 14% of respondents state that they may not own a vehicle in the near future because of this service. However, 30% of respondents indicated that they would be driving less in the future because of this service.

One of the most likely groups to reduce their drive time are Spanish-dominant Hispanics, who, at 44%, top the list of segments most likely to reduce their personal driving as a result of ride-hailing services.

Interestingly, electric scooters have more of an impact on car ownership than car sharing. Among those interested in using electric-scooter sharing services, 25% of respondents state that they may not own a vehicle in the near future and 38% of respondents report that they will be driving less because of this service.

Again, it’s tempting to vilify Millennials here, but Gen X tops the list of generations looking to park their cars and hop on a scooter. At 43%, Gen X is followed by Millennials at 37% among those who expressed interest in using scooter sharing services. Boomers could care less, as only about 7% plan to give electric scooters a whirl.

Our research validates the “last mile” theory. As more of the U.S. population concentrates in urban areas, ride-sharing becomes less likely to erode vehicle ownership and electric-scooter sharing emerges as its true potential disruptor. Living in the city core means shorter distances to travel from point A to B, so hopping on a scooter is so much more practical than hailing a Lyft, and more environmentally friendly.

Cars That Drive Themselves?! Well, Maybe.

On the heels of Tesla’s release of their most advanced auto-navigate feature to date, we’re releasing in-depth research on how people feel about autonomous or self-driving vehicles. We asked:

An “autonomous” or “self-driving” vehicle is a vehicle that combines sensors and software to control, navigate and drive the vehicle. These vehicles require very little to no human input. Using a scale from 1-5, please indicate your interest in this type of technology.

5-I can hardly wait to own a self-driving vehicle!
3-Not sure
1-I can’t see myself ever driving or owning one a self-driving vehicle

While most people are still either not sure or cannot see themselves driving an autonomous vehicle, the large percentage of people that can’t wait shows a shift in comfortableness with the idea of autonomous driving. In our 2017 study, only 24% of respondents were comfortable with fully autonomous driving:

Autonomous driving is where we do see large generational differences. Forty-eight percent (48%) of boomers indicate that they can’t see themselves ever driving or owning a self-driving car whereas almost the same percentage (42%) of Millennials state that they can hardly wait to own a self-driving vehicle.

For marketers, and brands for that matter, the key here will be educating the general population on the technology under the hood, improvements in safety measures, and how going “hands-free” can improve their quality of life. When the novelty wears off, what value will the consumer have left? Focus on that.

Where Are We Headed?

The future of driving is autonomous. It is almost standard now for all vehicles to have some level of driving assist features and the technology is just going to get smarter. But in the meantime, there is still a lot of opportunities for auto brands to move cars off their lots, but it will require that they re-think the consumer experience and how technology can enhance it and deliver messages that speak to real people, not stereotypes. The Infinity “Laws of Luxury” campaign, for example, redefined the rules of luxury with the slogan, “Luxury Should Be Lived In.” By challenging conventions, luxury was no longer off limits but could be experienced in our day to day lives. That messaging picked up on what consumers truly value and doing that will be the secret sauce for auto marketers. Don’t commoditize your message. Personalize it by bringing your consumer into the conversation.