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Cars Online 12/13 Todays consumers want it all: Industry-altering technologies, green cars and alternative ownership options, and truly responsive personalization


<ul><li> My Car, My WayTodays consumers want it all: Industry-alteringtechnologies, green cars and alternative ownershipoptions, and truly responsive personalization.Cars Online 12/13 </li> <li> Introduction 3Executive Summary 4Industry-alerting Technologies 7Connected cars: The transition from extra to expected will likely be rapid. 8Google me Car shoppers go online first (and second and third). 15Social media gains power (family and friends lose some). 18Green Cars and Alternative Ownership Options 21Is it Spring in the auto industry? Green is growing. 22Interest in electric vehicles is up, but consumers perceptions are off. 24Is car sharing the next wave (or at least ripple) for drivers living in big cities? 26Truly Responsive Personalization 29Dealers are still the center of the car buying experience for better or worse! 30Communication counts, but only if its done right. 35Celebrate! Loyalty is up for OEMs and dealers. 37Service is a lot more than repair work. 39Conclusions and Recommendations 42Contents2 </li> <li> Every year, Capgeminis annual globalautomotive study asks consumers what theywant in the car buying and ownership experience.And every year, the survey respondents thisyear, more than 8,000 consumers from Brazil,China, France, Germany, India, Russia, UnitedKingdom, and the United States say they wantmore: more features and functions, more serviceand convenience, more information and choice.But what exactly does more mean in 2012?Thats where the story gets interesting.Cars Online 12/13 points to trends inconsumer attitudes and expectations whichsuggest new opportunities for industrystakeholders automotive manufacturers anddealers to find the right balance for buyers whowant it all: the latest technologies, the newestcar type and ownership alternatives, and trulyresponsive personalization.In a typical scenario, todays car shopper startson the Web; in fact, 94 percent of the surveyedconsumers do online research early in the carbuying process. That information gathering processincludes checking out the commentary on socialmedia sites: 71 percent of all respondents rateduser-generated content as important or veryimportant in their decision-making process (59percent of those in mature markets and 83 percentin developing markets). By the time buyers get toa dealers showroom, theyre already well-informedand that affects their expectations about everythingfrom dashboard technologies to bottom-line prices.In interactions with Original EquipmentManufacturers (OEMs) and dealers virtual andface-to-face, during every step of the buyingprocess consumers want to be recognized forwhat they are: individuals who have more choicesthan ever; who want more features, more fueleconomy, and excellent vehicle performance; whoknow they can easily change brands and dealersto get my car, my way. Its a great time to be acar shopper!While many of the findings in this report arepresented in aggregate, we discovered significantdifferences among consumers in developingmarkets versus those in mature markets. Becausethe contrasts are both pervasive and critical to anunderstanding of the overall data, we point themout in most sections of the report.Cars Online 12/13 is Capgeminis 14th annualsurvey. Each year, we are surprised by the vigorin the industry, despite ongoing, global economicchallenges. The buying of a car is still a passionate,personal pursuit and todays consumers areeager to share their opinions on products andexperiences, on the high points and the low, onwhat they love and what they hate. Our hope isthat OEMs and dealers can use the insights inthis report to get closer to consumers, to gain anunderstanding of what they like and what theydont, and to use that understanding to thrive nextyear and beyond.Introduction3My Car, My Way </li> <li> Capgeminis Cars Online research examinesconsumer-driven trends in the industry,including the way technology is altering bothproducts and processes, the emergence ofinnovative transportation options and alternativesthat could change the industry for better or worse,and the demand for personalization from bothOEMs and dealers at every stage of the buyinglifecycle. In short, 2012 consumers want it all.Here are the top nine findings from this years surveyof more than 8,000 consumers.Industry-altering Technologies1 Connect me technology enhancesthe ownership experience. Consumersexpect their new cars to have all the technologytheyre used to everywhere else in their lives applications for work and recreation, deliveredthrough dashboards that belong to the family ofdesktops, laptops, tablets, and smartphones.(Not surprisingly, those buyers who want aconnected car are also more likely to value havinga smartphone loaded with apps). Of greatest interestare applications directly linked to vehicle safetyand the driving experience. To get connectedcar features, buyers are willing to share data withOEMs and dealers, which presents potentiallyrich opportunities for closer relationshipswith customers.2 OEMs and dealers need to put theirbest (virtual) foot forward: 94 percentof shoppers browse online first. The first place abuyer is likely to find my car is on the Internet:OEM and dealer websites and search engines aretop sources of information for buyers. The webgives consumers the power to compare, configure,calculate, and communicate: the shoppingexperience is enhanced, but an unresponsiveOEM or dealer is at a disadvantage. While actuallybuying a car online is still relatively rare, consumersdo purchase accessories and parts. Not surprisingly,the #1 reason behind online transactions is price.3 Word gets around, fast: Social mediainfluences consumers, for better or worse(especially in developing markets and amongyounger buyers). Checking out Facebook, Twitter,YouTube, and other social media channels arecommon practice among todays car shoppers. Aseach year passes, positive and negative commentshave an increasingly higher influence on whatproduct people buy and where they buy it. Buildingtrust in a brand or business begins online.Green Vehicles and AlternativeOwnership Models4 Green is growing (but shoppers arefrustrated by barriers). Interest in hybridsand electric vehicles (EVs) is growing, from 15percent in 2011 to 22 percent in 2012. Thegreatest expressed intent to buy a hybrid vehiclecomes from consumers in France (28%) and China(42%). But consumers are wary of EVs for threereasons: a relatively high total cost of ownership,inconvenient re-charging, and a relatively limitedrange. Only 32 percent of consumers think fullelectric vehicles will be a viable buying optionwithin two years, compared to 42 percent whothought so in 2011. Since consumer sentiment ismixed (and since perceptions may not be 100%accurate), everyone with a stake in the game OEMs, dealers, and governments needsto work together to instill confidence in greenvehicles and promote their benefits, both economicand environmental.5 The idea of not owning a car is gettingsome traction among urban consumers.Survey respondents agree: car sharing (and otheralternatives) could mean cost savings; for youngerdrivers, greater flexibility is almost as important.Either way, some consumers are warming up tothe idea of not owning a car, especially in urbanExecutive Summary4 </li> <li> and densely populated areas where congestion,pollution, and the high cost of ownership make adifferent choice especially attractive. Early entrantsnow have a foothold in a burgeoning market place,while startups are floating new and differentbusiness models.Truly Responsive Personalization6 The best dealers seamlessly connect thevirtual and the physical. Despite the digitaltransformation that is occurring in the automobileand other industries, the dealer is still an integralpart of car buying. But because of their onlineresources, consumers are better informed andmore independent than ever. To continue beingrelevant, dealers should offer more and betterservice, beginning with a showroom thats bothinformative and entertaining. Shoppers increasinglyexpect advanced and interactive tools, such as3-D configuration, touch screens, and automateddata transfer to mobile devices to provide adifferentiated, personalized buying experience.7 Loyalty to brands and dealers ison the rise. Over the past few years, OEMsand dealers have worked hard to improve thecustomer experience, and it seems that theirefforts are paying off. Overall, loyalty is up fromlast years survey. (A point of interest: the ownersof premium cars are more loyal than their volumebrand counterparts.) A well-crafted servicecontract should unite OEM and dealer in deliveringsatisfaction, enabling them to respond to regionaldifferences and specific customer demands. Inaddition, after-sales service is the fourth mostimportant reason for choosing a vehicle (afterreliability of the brand, price of the vehicle, andsafety), according to 88 percent of the surveyrespondents (compared to 81 percent in 2011 and77 percent in 2010); here, customer satisfaction inthe service bay means likely future sales.8 Short, but not necessarily sweet:consumers are crushing the buying cycle.The longer shoppers browse online, the less timethey spend visiting dealers. As the first visit movescloser to the moment of purchase, the dealerswindow for interacting with customers is narrowing.Worse yet, if consumers are not happy with thefirst touch point the OEMs or dealers website theyll walk away before they even get to ashowroom. Seventy-four percent of the 2012 surveyrespondents said they would go elsewhere if anOEM or dealer were too slow in answering an onlinequestion; 81 percent said the same if an answerwas of poor quality. (In 2011, those numbers were68 percent and 76 percent, respectively.)9 Post-sale communications shouldbe relevant and personal. No singlecommunication type or channel is favoredby consumers, but 48 percent of the surveyrespondents said they want information about theAbout Capgeminis Cars Online 12/13 studyCapgemini worked with ORC International, a global research firm, to conduct the survey forCars Online 12/13. All analysis and interpretation of the data were made by Capgemini.Fieldwork was conducted in August and September 2012.The survey respondents totaled more than 8,000 consumers in eight countries: Brazil, China,France, Germany, India, Russia, the United Kingdom (UK), and the United States (US). All werein the market for a car: 21 percent planned to buy or lease within two months, 37 percent intwo-to-six months, and 42 percent in seven-to-12 months. The composition of the consumersample in each country was based on projectable national samples representative of thein-market vehicle-buying population in terms of region, age, and gender.5My Car, My Way </li> <li> cars theyve purchased and that such informationcould affect their loyalty. OEMs and dealers shouldknow the what, when, and how of communicatingwith each customer, which means it is probablytime to investigate robust, flexible contentmanagement systems.Its not news that the strugglingglobal economy has been tough onauto salesThe real rate of GDP growth in developingmarkets (specifically Brazil, Russia, India, andChina) has dropped from eight percent in 2010to below five percent in 2012. In response, eachcountry has introduced strategies to bolster itsautomotive industries.Brazil has renegotiated old free trade agreementsto stem the flood of imports from China andMexico.1Russia, a new WTO member, haslowered import duties on vehicles, while offsettingthis with a recycling fee to stabilize domesticvehicle prices in the short term. OEMs in Indiaand China are targeting mature markets. Butthe clouds lining is silver indeed for developingmarkets: industry projections say that, withinseven years, 60 percent of the growth will comefrom them, while mature markets are expectedto make up only 15 percent of growth in thesame period.2While growth in the US should be slow andsteady, the short-term outlook for Europe isstark at best, growth that is slow or slightlynegative; at worst, a double-dip recessionand euro zone default. Regional auto industryexecutives are warning that Europe will likelynot see improvement for at least the next twoyears, as strict austerity measures and highunemployment weaken the economy and stifleconsumer demand.3In todays shrinking world andconnected, global industry, problems in Europecould ripple out, causing downward adjustmentsto economic forecasts everywhere.More than ever, automotive companies OEMsand dealers, in mature markets and developingones are putting the customer front-and-center(as have leaders in other industries; think Wal-Mart, Amazon, and Apple). And every year thesecustomers get more sophisticated and moredemanding. Right now, consumers in matureand developing markets differ in many ways (asis evident throughout this report); but all of themhave (or will eventually have) more information,more choices, and more power.Its inevitable: the already heated competitionfor vehicle sales will just get hotter. But so willinnovation, as buyers are potentially dazzled withnew vehicle types, buying models, and in-cartechnologies. OEMs and dealers around theworld are devising strategies that bring togetherdifferentiated products and relevant customerexperiences strategies that reflect and exploittheir understanding of the probable, the possible,and the yet-to-be-imagined.The next steps for playing well in the ever changinggame that is todays auto industry are found in thisreport: My Car, My Way.1Samantha Azzarello and Blu Putnam, BRIC Country Update: Slowing growth in the face of internaland external challenges, CME GROUP Market Insights (July 25, 2012)2Strategic Questions for Automotive Business Planners, Polk (December 2012)3Auto Makers Dig In as Europe Redlines, Emerging Markets Lose Luster, 2013 AutomotiveOutlook: International (October 22, 2012)6 </li> <li> Industry-alteringTechnologiesWhats the effect of technology on theautomotive industry?The answer is evident in both productsand processes.New cars have embedded technologies thatenhance the owners experience. Just watch aTV commercial: the cars are all about styling andfeatures, especially the bells and whistles (fromGPS systems to wireless access, from back-upcameras to satellite radio/telematics). At thesame time, shoppers have at their fingertips thepower of online browsing: a buyer can compareeverything, from everywhere at home, on aplane, in a dealership at any time.The industry has changed already because oftechnology, and it will only change more.7My Car, My Way </li> <li> Connected cars: The...</li></ul>