Contrary to popular belief, Generation Y consumers do want to purchase autos, but they have a long list of demands for automakers to meet, indicates a recent study from New York-based consulting firm Deloitte.
The study is based on 2,000 consumers in the U.S., 677 of which meet the Gen Y demographic (born between 1977 and 1994).
Sixty-one percent of Gen Y consumers say they expect to lease or purchase a vehicle within the next three years, while 23% plan to do so in the next 12 months and 8% do not expect ever to lease or purchase a vehicle.
Gen Y consumers who do not have a vehicle say the primary barrier to ownership is cost, with 80% saying they can’t afford payments and three-quarters citing high operational and maintenance expenses.
When asked what could lure them into purchasing a vehicle near-term, Gen Y’s say the car has to be less expensive with more affordable payment options, as well as be more fuel efficient.
“They’re also three times more likely than other generations to abandon vehicles if costs increase,” says Craig Giffi, Deloitte automotive practice leader. “So the love affair hasn’t disappeared, but the challenge is affordability.”
The majority of Gen Y buyers, whether or not they own a vehicle, say they prefer one with an alternative powertrain. Fifty-nine percent think they will be driving such a vehicle five years from now, while 27% prefer hybrid-electric vehicles.
Plug-in hybrids and battery-electric vehicles are not viewed as favorably, as only 8% of respondents say they would like a PHEV and just 7% indicate they would purchase a BEV. Only 4% say a hydrogen-fuel-cell vehicle would be their top choice.
“Hybrids give the convenience of not charging, but with increased fuel economy,” Giffi says. “We found that nearly two-thirds of Gen Y are willing to pay more for an alternative powertrain that meets their needs.”
Technology also is high on the list of potential Gen Y buyers. According to the study, 56% say they want technology that entertains them while driving and 57% wish it were easier to customize a vehicle’s infotainment system. More than half would like to connect their smartphone to use all its applications on the vehicle’s interface.
“While Gen Y may not necessarily scrutinize horsepower, acceleration times or engine size, they do have clear wants, needs and desires, especially when it comes to remaining connected to all of their lifestyle technology while on the road,” says Masa Hasegawa, principal-Deloitte. “This is good news for car makers, who already offer, or are bringing to market, many of the features Gen Y consumers want most in a vehicle.”
The customer experience is three times more important to Gen Y buyers than the vehicle’s design. Young consumers spend a lot of time researching before purchasing a new car or truck, with 79% considering three or more brands before narrowing their list to one or two models.
Gen Y buyers expect their automotive shopping experience to be similar to their retail and technology experiences.
“This is a great opportunity for car makers and dealerships to reinvent themselves,” says Joe Vitale, global automotive sector leader-Deloitte. “It’s a big purchase for them and they expect the same level of service, if not more, than what they have in normal retail exchanges.”
