December 20th, 2022, Clifton Mark
According to YouGov Global Automotive Profiles, 12% of global consumers plan on buying a new car in the next 12 months, with slightly fewer saying they’ll buy used. How will they buy? What will they buy and why? What are the alternatives to car purchase that consumers are thinking about? YouGov’s 2022 research provides insights into these questions. Here are some key findings.
Price is the priority
Rises in the cost-of-living were a big trend in 2022 and attitudes of car-buyers reflect that. Many consumers are tightening their belts, with 24% specifically mentioning auto costs as a place they would cut back their spending.
When YouGov asked 19,000+ consumers across 18 global markets what factors are driving their vehicle purchases, price was the most popular answer, with 61% of global consumers citing it as an important factor.
With price forefront in the minds of consumers, value for money will be one of the key factors in purchase decisions. YouGov BrandIndex continually tracks consumer perception on this metric across global markets, including the US and UK where consumers agree that Toyota offers excellent value.
Online shopping for cars
Visiting a dealership is the traditional way to buy a car. In recent years, however, online shopping has reached the car industry. Innovators like Tesla have transformed the direct-to-consumer space while online retailers like Carvana and Cazoo have pioneered new ways to reach used car-buyers directly. How likely are consumers to tread these new online paths to purchase?
According to YouGov research, in-person business still rules the auto market. More than half of global consumers (52%) say they prefer to purchase cars in person rather than online. And this stated preference is confirmed by action. Most consumers bought their previous vehicle at a dealership (58%) or in-person from an owner (21%). This is compared to just 17% who bought their last car online.
Although in-person sales are still dominant overall, there’s significant variation among age groups. Younger buyers are much more likely to have used online options to buy their car. Of 18-24-year-olds, 32% bought their last car online and 48% will consider going online for their next vehicle purchase. This suggests that the online car sales will grow as new generations enter the market.
Even if most consumers will make the final deal in person, they can be reached online before that step. Consumers who expect to buy a new car in the next 12 months notice internet advertising more than any other kind of ad. What’s more, our research shows that they’re doing most of the research online. A survey of 1,321 adults in Great Britain and the US shows that dealership websites are the most popular place to research buying a new car, with 43% of Americans and 61% of Britons using them.
Environmental concerns drive EV sales but high prices may hit the brakes
The rise of electric vehicles is another major shift in the auto industry. Data from YouGov Global Profiles shows that nearly two thirds (64%) of global consumers agree that the future of the motor industry is electrification, with only 11% disagreeing.
For consumers across markets, protecting the environment is one of the top reasons to buy an electric car. Moreover, YouGov research shows that EV owners (59%) are more likely to consider themselves environmentalists than are members of the general population (50%). This difference is particularly pronounced in the US (66%/42%) and Great Britain (61%/34%), suggesting a connection between interest in electric vehicles and concern for the environment – as you might expect.
However, the most cited reason not to consider going electric is price. EV makers have been raising prices this year and this is likely to clash with customer expectations when the time comes to make a purchase decision. Over a quarter of US and GB consumers who plan on buying a car in the next year say that they would not consider an electric engine due to higher initial cost. Electric sticker-shock is even a factor at the upper end of the market. Of owners of luxury and premium cars across the globe who are not interested in electric vehicles, 38% cite high initial cost as a reason to avoid them.
Innovation over ownership: flying taxis, car subscriptions and e-bikes
Auto-sector innovation isn’t confined to new engine types and e-commerce. Many are questioning the very idea of car ownership itself. According to a global survey across 18 markets, 42% of consumers would give up owning a car if there were another convenient alternative, whereas only 26% say they would not. While there is significant variation between markets, those who would give up their cars outnumber those who wouldn’t in almost every market surveyed. Only Americans and Australians say they would not give up their cars if alternate convenient transport were available. And even among car-loving Americans, 30% say they don’t want to be locked into owning one.
What convenient alternatives are on the rise? One of the more fanciful substitutes for owning a personal vehicle is to hire flying taxis. XPeng Inc recently tested their aerial cabs in Dubai, raising hopes that this could alleviate traffic woes.
Car subscription services, which allow members to use cars without buying or leasing them themselves, are a more accessible alternative. According to YouGov's recent US car subscription trends report, these services are growing quickly in popularity, particularly among younger demographics and among women. However, fewer than half of global consumers are even aware that such services exist, which suggests significant room for growth.
E-bikes are also a rapidly growing transportation solution. A third of Chinese (34%) consumers already own an e-bike and a quarter of Danes (25%). While the proportion of Americans who own an e-bike is quite low (2%), e-bike usage is rising in the US. Unlike car subscription services, e-bike use skews male in most markets. American E-bike owners also tend to be younger and wealthier than the general population.
However the auto-sector moves, whether on two wheels or through the skies, whether powered by petrol or batteries, YouGov will shed light on the road ahead.
Read our auto industry white paper, “The road ahead for the Future of Car Buying” here.
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Photo by Erik Mclean on Unsplash