Connecting with Gen Y Making the short list€¦ · Connecting with Gen Y: Making the short list 6...
Transcript of Connecting with Gen Y Making the short list€¦ · Connecting with Gen Y: Making the short list 6...
Connecting with Gen YMaking the short list
Executive summary2009 survey findings
Connecting with Gen Y: Making the short list
Deloitte Automotive Generation Y SurveyGeneration Y: Making the short list
Contents
Introduction 1
Factors that influence purchasing decisions 2
Vehicle brand and origin preferences 3
Sustainability and ecological factors 6
Online resources for vehicle shopping 9
Vehicle affordability and value 12
Buying experience 14
2008-2009 survey benchmark questions 17
Contacts 20
About the survey 20
As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
Connecting with Gen Y: Making the short list 1
Deloitte Automotive Generation Y SurveyGeneration Y: Making the short list
Introduction
If the largest generation since the Baby Boomers has its way, Generation Y might just be the group to help jump start the U.S. automative industry. At 75 million strong and coming of age, this generation may have what it takes to re-shape everything, including America’s wavering automative industry. According to a new Deloitte survey, in collaboration with The Eli Broad Graduate School of Management at Michigan State University, Gen Y consumers may have an increasingly positive view of everything from auto jobs to American-made vehicles.
As a follow-on to last year’s Deloitte’s survey “Connecting with Gen Y: Making Cars Cool Again,” this analysis takes a deeper look at Generation Y’s attitudes and perceptions of vehicles and the auto industry. The survey, “Gen Y: Making the Short List” offers unique insights into what may capture the attention and shape the opinions of this generation.
The following key findings emerged in the 2009 Deloitte Automotive Gen Y survey.
Connecting with Gen Y: Making the short list 2
Factors that influence purchasing decisions
Please indicate the top three items, options, or features that a car must have for you to even consider buying it; these should include the top three things that were “critical to your vehicle purchase decision”
0.0%
5.0%
10.0%
15.0%
Automatic transmission
ReliabilityCD playerSafetyAir conditioning/
heat
Power locks and
windows
Interior room
Exterior styling/looks
Affordability/price
Gas mileage
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12.2%
6.9%
5.5%5.0% 4.7% 4.4% 4.2%
3.4%2.7%
3.2%
Even Gen Y has changed the way they make purchasing decisions because of the economy. The top “must-have” features are gas mileage and affordability/price. These results are in sharp contrast with last year’s data. The 2008 survey pointed to safety as the most important factor, followed by comfort.
Connecting with Gen Y: Making the short list 3
Vehicle brand and origin preferences
I would consider a vehicle from a brand that is currently, or has recently been, in bankruptcy
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Strongly agree
9876Neutral432Strongly disagree
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14.8%
8.3%9.7%
8.2%
22.4%
11.6%
9.6%
7.4%
3.8%4.2%
The majority of Gen-Y respondents would at least consider purchasing a vehicle from a manufacturer that has filed for bankruptcy. 36.6% said they would consider buying a vehicle from a brand that is currently or has recently been in bankruptcy, with 22.4% remaining neutral on the subject.
Connecting with Gen Y: Making the short list 4
Vehicle brand and origin preferences (cont.)
Buying an American automotive manufacturer brand is an important factor
0.0%
5.0%
10.0%
15.0%
20.0%
Strongly agree
9876Neutral432Strongly disagree
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15.5%
7.9%7.1%
9.2%
17.1%
10.0%
8.1%8.9%
10.0%
6.3%
Gen Y respondents were split regarding whether it’s important to purchase an American automotive manufacturer brand. 43.3% say it is important, whereas 17.1% remain neutral and 39.7% said it’s not that important. The response to this question is interesting because in the past during times of war and recession, people historically have purchased American items to help stimulate the economy.
Connecting with Gen Y: Making the short list 5
Vehicle brand and origin preferences (cont.)
Buying a vehicle produced in an American factory is important (i.e., a Honda Accord produced in the U.S. vs. a Ford produced in Mexico)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Strongly agree
9876Neutral432Strongly disagree
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9.2%
5.5%4.5%
7.3%
20.7%
10.9%
12.9% 12.7%
9.3%
7.0%
The “Made in the USA” label still carries a lot of weight, especially for the Gen Y respondents when it comes to automotive purchasing habits. The majority of Gen Y respondents (52.8%) said it’s important that the vehicle they purchase is manufactured in an American factory. This could be tied to this generation’s desire to help keep jobs in the U.S. and reduce unemployment.
Connecting with Gen Y: Making the short list 6
Sustainability and ecological factors
The environment is an important factor when purchasing a vehicle
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Strongly agree
9876Neutral432Strongly disagree
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4.8%
1.4%
3.7%4.9%
12.0% 11.5%
14.9% 15.2%
20.6%
11.0%
The type of vehicle I drive makes a difference in addressing global and local concerns about the environment
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Strongly agree
9876Neutral432Strongly disagree
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9.7%
5.0%
7.2% 6.7%
21.6%
13.9% 13.0%
10.8%
6.8%5.3%
While safety and reliability do not appear to be factors the Gen Y respondents would pay more for, environmentally friendly vehicles that save money on energy costs and help improve the environment are very important to this group.
73.2% of respondents agree that the environment is an extremely important factor when purchasing a vehicle, while •49.8% of respondents agree that the type of vehicle they drive directly affects the environment.
Additionally:
52.5% would pay more for an environmentally-friendly vehicle.•
64.4% would pay more for a vehicle that is better for the environment AND saves money on energy costs, but 44.4% •would NOT pay more for a vehicle if it did not save money on energy costs even if it was better for the environment.
Connecting with Gen Y: Making the short list 7
Sustainability and ecological factors (cont.)
Relationships between the U.S. and oil-producing nations are a factor
0.0%
5.0%
10.0%
15.0%
20.0%
Strongly agree
9876Neutral432Strongly disagree
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7.6%
3.2%
5.0%
6.6%
17.7%
15.3%14.5%
12.1%
10.4%
7.5%
Nearly 60 percent (59.8%) of Gen Y respondents agree that the relationship between the U.S. and oil-producing nations is a factor when purchasing a vehicle.
Connecting with Gen Y: Making the short list 8
Sustainability and ecological factors (cont.)
When considering a vehicle, please indicate what type of sustainable technologies would impact your purchase favorably (multiple selections permitted per respondent)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Sustainable technology
doesn't affect my decision
None of these technologies would affect my decision
A manufacturer that recycles automobile components
Electric engine (battery or
plug-in)
Clean diesel engine
Ethanol and gasoline
engine (E85)
Hybrid engine (gasoline
and electric)
Standard gasoline engine with
high fuel efficiency
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22.8% 22.3%
12.9% 12.4% 12.1%10.6%
3.7% 3.2%
The majority of Gen Y respondents believe that some form of energy-efficiency and sustainable technology is important when purchasing a vehicle. Only 6.9% said that sustainable technology would not affect their decision. Additionally, more than half (51.8%) of Gen Y respondents would be willing to pay more for a vehicle from a manufacturer recognized as eco-friendly.
Connecting with Gen Y: Making the short list 9
Online resources for vehicle shopping
When shopping for a vehicle, I visit social networking groups (Facebook, etc.) to get more information about a brand or model
25%
11%
Disagree Neutral Agree
64%
The majority (64%) of Gen Y respondents do not get their information on a vehicle brand or model from social networking sites.
Connecting with Gen Y: Making the short list 10
Online resources for vehicle shopping (cont.)
When shopping for a vehicle, I visit car forums/blogs/Twitter to get more information about a brand or model
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly agree
9876Neutral432Strongly disagree
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30.8%
11.5%9.5%
6.4%
11.1%
7.6% 7.4%5.6% 5.8%
4.4%
Social media sites and blogs may be the biggest way for Gen Y to communicate, but these forums don’t help sway purchasing decisions for Gen Y respondents, when it comes to vehicles. More than half (58.2%) do not look for vehicle advice on blogs or other social media forums before purchase.
Connecting with Gen Y: Making the short list 11
Online resources for vehicle shopping (cont.)
When shopping for a vehicle, I use Google or Yahoo! Searchto bet more information about a brand or model
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Strongly agree
9876Neutral432Strongly disagree
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6.1%
1.6% 2.2% 2.2%
7.9% 8.6%
13.8%15.5%
27.3%
14.7%
While most of the Gen Y respondents do not look at blogs or social media sites for information on a vehicle, the majority (79.9%) use Google or Yahoo! to search for information.
Connecting with Gen Y: Making the short list 12
Vehicle affordability and value
I am more likely to purchase a used vehicle over a new vehicle in the future
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Strongly agree
9876Neutral432Strongly disagree
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8.7%
4.2% 4.7% 5.3%
13.2%
8.2%
11.9%
14.9%
20.3%
8.6%
The Gen Y respondent typically thinks “newer is better” but not when it comes to cars. More than 63% believe that used vehicles are a greater value than new vehicles and they’re more than three times as likely to purchase a used vehicle over a new one.
Connecting with Gen Y: Making the short list 13
Vehicle affordability and value (cont.)
I would prefer to know the final selling price upfront, eliminating vehicle incentives from the vehicle purchase equation (selling prices vs. MSRP)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly agree
9876Neutral432Strongly disagree
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0.8% 0.6% 1.4% 2.2%
10.0% 10.1%
13.9%15.9%
30.9%
14.2%
The Gen Y respondents were lukewarm when it comes to vehicle incentives. The majority (85%) would gladly eliminate vehicle incentives from the purchasing equation if it meant they could simply know the final selling price upfront.
Connecting with Gen Y: Making the short list 14
Buying experience
I would like to be able to test-drive a vehicle for 24 hours
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Strongly agree
9876Neutral432Strongly disagree
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4.7%3.1%
4.6%6.0%
12.4%
8.3%
13.2% 13.9%
23.0%
10.7%
Having an adequate trial run is important to Gen Y respondents. According to the survey, nearly 70% would like to test-drive a vehicle for 24 hours before making a decision and 23% strongly agree.
Connecting with Gen Y: Making the short list 15
Buying experience (cont.)
I would prefer to purchase without negotiating with a salesperson
0.0%
5.0%
10.0%
15.0%
20.0%
Strongly agree
9876Neutral432Strongly disagree
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6.8%
4.7%5.8%
7.1%
14.2%
12.1% 11.5%12.9%
16.6%
8.3%
More than 60% of the Gen Y respondents would prefer to skip price negotiations with a salesperson.
Connecting with Gen Y: Making the short list 16
Buying experience (cont.)
I would prefer not to haggle over the price of a car
0.0%
5.0%
10.0%
15.0%
20.0%
Strongly agree
9876Neutral432Strongly disagree
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8.4%
4.4%
6.5% 6.7%
12.1% 11.6% 11.0% 11.3%
18.2%
9.9%
Nickel and diming, wheeling, dealing and schmoozing do not work for Gen Y respondents. More than 62% prefer a straight forward, no-hassle process when purchasing a vehicle. Further they indicated their preference for getting the information they need over the Internet from the dealer rather than having face-to-face conversations with salespeople.
Connecting with Gen Y: Making the short list 17
2008-2009 survey benchmark questions
Do you think that, five years from now, you will be driving the same vehicle brand that you are currently driving? (2008 data)
28%
45%
Expect to drive same vehicle Unsure Do not expect to drive same vehicle
27%
36
6877726580
34
35221530
20
957282
7565
37
424045
50
Do you think that, five years from now, you will be driving the same vehicle brand that you are currently driving? (2009 data)
Yes No
36
6877726580
34
35221530
20
957282
7565
37
424045
50
58%
42%
Brand loyalty is back for Gen Y respondents. In the 2008 survey, only 27% of respondents said they expect to be driving the same vehicle brand in five years compared with 42% of respondents in the 2009 survey. This indicates that respondent’s loyalty to a specific brand has increased by more than 15 percentage points year over year.
Connecting with Gen Y: Making the short list 18
2008-2009 survey benchmark questions (cont.)
What type of vehicle do you see yourself driving in five years?
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Station wagon
OtherHatchback Crossover (nonluxury)
ConvertibleMinivan/van
TruckCoupe (two-door)
HybridLuxury crossover or sedan
Sedan (nonluxury)
SUV
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23.0%
19.0%
15.0%
11.0%
8.0% 8.0%
5.0%4.0%
2.0% 2.0%1.0%
3.0%
2008 2009
What type of vehicle do you see yourself driving in five years?
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Station wagon
OtherHatchback Crossover (nonluxury)
ConvertibleMinivan/van
TruckCoupe (two-door)
HybridLuxury crossover or sedan
Sedan (nonluxury)
SUV
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23.0%
19.0%
15.0%
11.0%
8.0% 8.0%
5.0%4.0%
2.0% 2.0%1.0%
3.0%
2008 2009
SUVs are making a comeback. As the economy slowly rebounds and the price of gas remains lower than 2008, the Gen Y respondents demand for SUVs is increasing. Nearly one in four (23%) said they see themselves driving an SUV in five years, up from only 11% last year.
Connecting with Gen Y: Making the short list 19
2008-2009 survey benchmark questions (cont.)
Jobs in the auto industry are making a comeback. In 2009, only 50.3% of Gen Y respondents found the idea of working in the auto industry unappealing, that’s down from almost 70% in the 2008 survey.
How appealing or unappealing is the idea of working in the U.S. auto industry? (2009 data)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Very appealing
9876Neutral432Very unappealing
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23.6%
8.0%9.4% 9.3%
15.2%
8.9% 9.2%
7.3%5.8%
3.2%
How appealing or unappealing is the idea of working in the U.S. auto industry? (2008 data)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Very unappealing
Somewhat unappealing
Somewhat appealing
Very appealing
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8.0%
24.0%
28.0%
41.0%
Contacts
Michelle Collins U.S. Automotive Sector Leader Partner Deloitte & Touche LLP Tel: +1 313 396 3219 Email: [email protected]
Mark Gardner U.S. Automotive Consulting Leader Principal Deloitte Consulting LLP Tel: +1 313 324 1178 Email: [email protected]
For more information on Deloitte Automotive Gen Y study visit www.deloitte.com/us/genyconnection
About the Survey
The survey developed and administered by Deloitte in cooperation with The Eli Broad Graduate School of Management at Michigan State University. The survey included 1,100 participants aged 18 to 30. Respondents were randomly drawn from a panel of individuals who agreed to participate in online surveys and the random sample was designed to mimic the ethnic and regional profile of the United States.
This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication
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