Tuesday, January 24, 2012

Study Suggests Massive Potential Hybrid Market

Published January 24, 2012

By Jeff Cobb


2012 Toyota Prius c.

While ongoing CAFE hearings discuss mandating eco-friendly and efficient vehicles, a study by Deloitte says perhaps an even more powerful force in their favor is also in play.

This would be “Generation Y” consumers – those aged 19-31, alternately known as "Millennials."

This demographic is the largest since the baby boomers and reportedly has a preference for hybrids and in-vehicle connectivity.

Of respondents to the Deloitte survey, 59 percent of respondents want an electrified vehicle.
Of Gen Y respondents, 57 percent said they were interested in hybrids, only 2 percent were interested in battery electric vehicles, and 37 percent wanted traditional combustion-powertrain vehicles.

If this portrayal is accurate, it means a profound push toward more gas-electric vehicles by a purchasing constituency numbered at 80-million strong.

What’s more, these are younger aged buyers who are forming these preferences. This means their sensibilities stand to influence – and challenge – the automotive market for decades to come.

“When millenials are ready to buy a vehicle, they consider nearly twice as many vehicles as baby boomers,” said Mark Fields, head of Ford Motor Co.'s Americas unit to Automotive News. “This is a generation of consumers that has to be reckoned with.”

Whether EVs would do well with this crowd at this juncture is in doubt. The number one reason in favor of electrified vehicles was improved fuel economy with no perceived downside.

According to Craig Giffi, automotive practice leader for Deloitte which conducted the survey, respondents were concerned for the environment, but did not want to be inconvenienced with contending with plugging in, he said.

Smart phones on wheels

Joe Vitale, global automotive sector leader for Deloitte's parent company, Deloitte Touche Tohmatsu Ltd., said Gen Y consumers would spend more than $3,000 for in-vehicle connectivity.

What features would be worth spending that extra money for? Fifty-nine percent said the most important was in-dash technology, with nearly 75 percent asking for touch screens.

Observers note that automakers have been shown they have an opportunity to capitalize on these preferences, as 77 percent of respondents said they would like to buy more accessories and upgrades on an ongoing basis.

Somewhat Ironic Trend

The U.S. Department of Transportation has for the past few years held “summits” to discuss the “epidemic” of distracted driving.

In short, multitasking behind the wheel has been shown to be a threat or lethal.

The Gen Y respondents to the Deloitte survey are mindful of this reality. They still want a load of in-dash bells and whistles, but also want tech to improve their chances of not having the experience end badly – and are willing to pay up to $2,000 per car extra for it.

A desirable bundle of safety features for these connected hybrids includes collision-avoidance systems, blind-spot detection, and sleep-alert systems.

"It's almost as if they're saying 'I'm going to be distracted, so I want the car to give me protection from myself,'" Giffi said. "The safety technology they want is the next generation of accident-avoidance technology."

The survey included 250 Gen Y consumers from China, 300 from Western Europe, ad 1,500 from the U.S. and is considered a statistically significant data sampling of where today’s Millennials place their priorities.

Automotive News, press release


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