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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


  • My Car, My WayTodays consumers want it all: Industry-alteringtechnologies, green cars and alternative ownershipoptions, and truly responsive personalization.Cars Online 12/13
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • Connected cars: The transitionfrom extra to expectedwill likely be rapid.Connected cars link the driver and vehicle tothe environment through the Internet andwireless networks. Examples of connectedtechnologies include dynamic navigation systems,remote vehicle diagnostics, automatic notificationof emergency resources, an apps store, andon-demand, real-time access to music and news.Fifty-one percent of consumers in all marketsanticipate that their next cars will be connected(this total combines 13 percent who already have aconnected car and 38 percent who want one these consumers can be known as connectedcar enthusiasts).As a rule, consumers in developing markets arekeener about technology; this hold true forconnected car enthusiasts. In developingmarkets, 64 percent of consumers want connectedservices; in China that number jumps to 78 percent.In bold contrast, a significant number of Germanconsumers (49%) havent even heard of theconnected car concept. Only 17 percent of thesurvey respondents said theyre not interested inconnected car services (Figure 1). One possiblesuggestion: OEMs should consider launchingselect services to consumers in the more receptiveregions of the world.Which types of connected car features are mostimportant to buyers? (See the sidebar for anexplanation of whats included in each category).Among interested consumers, greater safety is the#1 category (78%), an enhanced drivingexperience is #2 (71%); real-time vehiclediagnostics/customer care is #3 (66%); andinfotainment is last (55%). Lets take a closer lookat that data (Figure 2).Although the vehicle diagnostics/customer care isranked #3, the specific features within thatcategory generated a lot of interest. For example,75 percent of consumers said they want aservice reminder, while 81 percent want theconnected car to monitor condition of parts andgive automated warnings. These types of offersbend the curve toward empowering owners tobe proactive in fixing problems (hence the oldtruism: An ounce of prevention is worth a poundof cure.) This is in direct contrast to the originalapproach to telematics, which was to use thetechnology to sell features to customers. Ofcourse, these diagnostic functions direct thedriver to the dealer; in the end, that increasesloyalty and the likelihood of future purchases.8
  • Multiple responses allowedSource: CapgeminiFigure 2: Preferred Connected Car Categories (% saying important/very important) Capgemini Consulting 2013100%40%30%20% 90%78708771618066518055396980%70%60%50%10%0%SafetyDriving experienceInfotainmentVichicle diagnostics/ customer careAll Markets Mature Markets Developing MarketsMature MarketsU.S.U.K.FranceGermanyDeveloping MarketsRussiaBrazilIndiaChinaAlready useconnected car servicesNext car will haveconnected servicesNot interested inconnected car servicesDont knowNot heard ofconnected car servicesSource: CapgeminiFigure 1: Familiarity with Connected Car Services (% saying) Capgemini Consulting 2013Mature Markets0% 20% 40% 60% 80% 100%11 27All Markets21 31 1013 27 24 23 1311 22 20 37 1014 38 21 17 107 20 16 49 816 48 14 15 79 40 22 20 912 47 15 15 1122 48 13 12 520 58 7 11 41338172399My Car, My Way
  • While infotainment grabs media attention, its notparticularly sought by car shoppers. One possibleexplanation is that current options, like satelliteradio or the option of connecting a smartphone toplay a personal playlist, already provide a greatin-car entertainment environment. Thus, owners arealready satisfied in this area and look to theconnected car to satisfy still unmet needs. (Also,perhaps they cant imagine how the entertainmentsystems in the connected car would be significantlybetter). In fact, the lowest rated connected serviceis social media apps (e.g. Facebook, Twitter),averaging only 44 percent (24 percent in maturemarkets; 62 percent in developing markets). Thereason? Since smartphone alternatives deliversocial media, consumers could perceive that serviceas redundant (similar to the infotainment category).How to use, how to pay?A large majority of consumers want core carfunctionality (safety, driving experience, anddiagnostics/care) to be easily accessible ondashboard screens, preferably controlled by voicecommands. For infotainment services, consumersare almost evenly divided between smartphonedocking and the dashboard (Figure 3). In manyways, the connected cars dashboard is itself justanother device in a customers collection ofdesktops, laptops, tablets, and smartphones. Ofcourse, for the OEM and dealers, a connected caroffers unprecedented opportunities for direct,customer-specific, targeted marketing. (Seethe section, Communication counts, but onlyif it is done right, for a discussion ofpost-sales communication).When asked how they want to pay for connectedcar services, consumers answers differed bymarket. Among those in mature markets, the mostpopular payment type, by a wide margin, isincluded in the price of the vehicle. In developingmarkets, no single option stands out: transaction-based payment is the most popular, followed by amonthly fee. The good news for OEMs? Only 15percent of consumers in all markets said theyexpect the technology to be free.Features in connected cars: Whichmatter most to consumers?Safety Direct connection to roadside assistance Emergency assistance (automatedemergency/break-down call, speak toan agent) Information on speed limits and activespeed control by car Automated warnings (e.g. roadblocks,ice, traffic jam, accident) and reaction (e.g.alternative route)Infotainment Wi-Fi hotspot for passengers to connect topersonal devices Social media apps (e.g. Facebook, Twitter) Personal playlist (access via cloud) Movies, music, games Mobile office (e.g. connection to work email) Point of interest search (e.g. parking,restaurants, hotels) Concierge servicesDriving experience Individualized route planning (e.g. scenicviews, good restaurants) Smart and real-time navigation system Route recorder for economical drivingVehicle diagnostic/customer care Service reminder Monitor condition of parts in car and giveautomatic warnings Automated service appointmentscheduling Contact nearest dealer Contact vehicle manufacturer/call centerfor personal assistance Usage-based insuranceTypes of data: Which wouldconsumers be willing to share? Identification of driver Personal(such as name) Driving habits Speed, temperature,use of dashboard functions Vehicle diagnostics andconsumption Mileage, fuel, oil,water, brake fluid Driving routes, locations, anddistance traveled Entertainment preferences Music,movies, games Usage of connect features Frequency, duration, location,personal preferences10
  • Give and take: Customers are willingto give up some privacy for perksConnected cars require data sharing: in fact, onewithout the other is impossible. But areconsumers willing to share personal and vehicleinformation with OEMS and dealers? Yes, if theySource: CapgeminiFigure 3: Preferred Devices for Connected Car Categories (% saying) Capgemini Consulting 2013Safety Driving experiance InfotainmentVichicle diagnostics/ customer careDashboard2612 62216853413920331411Dont Know Tabletunderstand why its necessary. Consumers indeveloping markets are more willing to share data(86%) than are consumers in mature markets(62%). Only 20 percent of respondents supportedunrestricted sharing (Figure 4).At the country level, the data gets more interesting.Source: CapgeminiFigure 4: Willingness to Share Connected Car Data with OEMs and Dealers (% saying) Capgemini Consulting 2013All Markets Mature Markets Developing Markets75% 62% 86%202728253812222814263129No Data Sharing Yes, but only anonymous data for research and statisticsYes, but only for an incentive or service in exchange Yes, without restrictions11My Car, My Way
  • Source: CapgeminiFigure 5: Willingness to Share Personal Data with Manufacturer or Dealer (% saying) Capgemini Consulting 2013No data sharing Yes, but only anonymous data for research and statisticsYes, but only if I get an incentive or service in exchange Yes, without restrictionsMature MarketsU.S.U.K.FranceGermanyDeveloping MarketsRussiaBrazilIndiaChina0 20 40 60 80 10046 24 20 1048 22 19 1149 23 19 941 26 22 1147 25 823 31 26 2028 36 19 1723 33 23 2117 24 3125 31 31 13342823152028All Markets12
  • Care Information Vehicle Information Driving Support Service reminders whenmaintenance is due Service scheduling support(e.g. to easily schedule requiredmaintenance with preferreddealership) Special offers and promotionsfrom manufacturer and/ordealer Manufacturer vehiclenotifications (e.g. vehicle oraccessory recalls and warrantychanges) Vehicle owners manual with easynavigation Explanation of vehicle features (e.g.Q&A on most requested informationon car features by new owners) Video instruction (e.g. for morecomplex vehicle operations such aschanging a flat tire or jump startinganother vehicle) Instrument panel and driverinformation console supplementalinformation (e.g. explaining lights,indicators, messages) Car care tips Vehicle health information (e.g. status of vehicleoperations) Diagnostic trouble code (e.g. dynamically providesupplemental information when specific instruction isimportant such as contacting dealership immediatelyor stop driving vehicle) Remedial action support (e.g. identify most likelycauses of a specific situation with prompts asnecessary to identify driving conditions, packagingof information with analysis for service technician,sending to servicer via email) Live vehicle data display (e.g. dynamically changingdisplay of vehicle metrics such as driving efficiency forfuel economy and performance-related informationincluding RPM, power and thrust)Remote Support Communications New Vehicle Purchase Remotely sound horn and turnon lights to find car Remotely start and stop vehicle Remotely lock and unlockvehicle doors Parked car locator (using GPS) Locate stolen vehicle Call roadside assistance (easy-to-access single click) Single click to call dealership (e.g.about appointments, questions) Vehicle configurator Vehicle locator with configurator (find vehiclesmatching configuration) Schedule a test drive Vehicle showroom (e.g. explore vehicles usingtouchscreen, pictures and videos to understandfeatures, see vehicle in action)Smartphone Features by CategoryAt the country level, the data gets more interesting.Forty-seven percent of consumers in Germany aremost reluctant to share personal data (one of sixdata types explored in the survey - see sidebar onpage 10), while 31 percent of consumers in Indiaare willing to share that data without anyrestrictions (Figure 5). (Overall, consumers indeveloping markets are less concerned aboutdata privacy). Of course, 28 percent of the surveyrespondents are willing to share informationanonymously; 27 percent are inclined to sharewhen theres an incentive (Figure 4). Nonetheless,45 percent of the survey participants said theywould not want their data shared with thirdparties, such as insurance firms, travel agencies,or advertising companies.Clearly, the case has to be made to buyers: whatkind of data needs to be shared and why? Overall,car owners are more willing to divulge informationthats related to their driving habits and/or necessaryfor vehicle diagnostics. And they are more willing toshare data under practical arrangements; that is,when giving means getting (when sharing datawith OEMs and dealers results in direct benefit tothem). For example, with data on an ownersdriving habits, an OEM could provide tips toincrease fuel efficiency.Is there an app for that?Smartphone applications for cars are, notsurprisingly, a very recent innovation in industry.But consumers already love them! Seventy-sevenpercent of connected car enthusiasts (that is,owners or potential owners) said they considerapps to be very important or extremelyimportant (only 56 percent of non-owners saidthe same). Here are the features desired in an appacross six categories.13My Car, My Way
  • Multiple responses allowedSource: CapgeminiFigure 6: Smartphone Categories of Features (% saying important/very important) Capgemini Consulting 2013Driving SupportCare InformationRemote SupportCommunicationVehicle InformationNew Vehicle Purchase100%20% 40% 60% 80%710%6181706080685879665576655179624877All Markets Mature Markets Developing MarketsDriving support is the most preferred at 71percent, followed closely by care information, andremote support. Across all categories, consumersin developing markets express much more interestin smartphone features (Figure 6).Some OEMs are further ahead in providing thesecapabilities to customers, but the sky is still thelimit in finding ways to use smartphone apps toenhance the car ownership experience. In theseearly days, smartphone/connected car capabilitiesmay overlap; this should not be interpreted asconvergence (that is, consumers wanting one orthe other) but rather as enrichment (that is, certaincustomers will want both).Smartphone applications provide a uniqueopportunity for OEMs/dealers to have one-to-oneconnections to owners connections thathavent been possible (but have been desirable)before now. In the past, post-purchasecommunication with owners was typically limitedand negative (or neutral, at best): for example, toresolve a product or customer service dispute/issue or to respond to a request for informationabout a vehicle or part. But a smartphone appopens up the door for the OEM/dealer to establisha direct, personal relationship with the customer.The OEM could provide vehicle-specific benefitsrelevant to the owner; the dealer could make surethat service delivery is easy and convenient. Theright communication, at the right time, wouldincrease customer loyalty to the brand and theOEM/dealer franchise.14
  • Google me Car shoppers go online first(and second and third).In 2012, 94 percent of consumers used the Webto research automobiles (97 percent indeveloping markets and 91 percent in maturemarkets) perhaps the most profound car buyingtrend of the past 10 years. In 2002, only 20percent of survey participants said they wentonline before purchasing a car.Forty-seven percent of consumers check OEMwebsites before purchasing a car. Among the othertop sources of information are search engines andinformation websites (Consumer Reports, WhatCar, Schwacke, Argus). In addition, consumersprobe OEMs and dealers social media sites, aswell as third-party automotive blogs and forums,looking for vehicle features and rating, reputationsfor fairness and customer care, drivers satisfactionlevels, and other types of information.The websites of OEMs and dealers should helpconsumers narrow their choice and make adecision by allowing them to compare vehiclesand configurations, calculate and compare stickerprices, and put together a customized dreamcar using interactive modeling tools. With growingimportance, the consumer should be able to geta real quote online; 20 percent of the surveyrespondents said they want this capability, thatsalmost double from one year ago (Figure 7). Here,theres a noticeable difference between the twomarkets: 24 percent of consumers in maturemarkets said they want online quoting (up from15 percent in 2011); 17 percent in developingmarkets said the same (up from nine percent in2011). While Web functions have been in play foryears, OEMs and dealers should not take them forgranted but should, instead, be sure that theinformation on their sites is easy-to-access,accurate, and complete.But not many shoppers are buyingcars online yetOverall, the interest in purchasing a car online hasheld steady for the past three years: 39 percent ofsurvey participants (48 percent in developingmarkets; 31 percent in mature markets) said theywould consider buying a car over the Internet.When asked about buying alternatives to adealership, 45 percent of the survey respondentswould consider buying their car directly from theOEMs, if it were possible (Figure 8).15My Car, My Way
  • Actual online sales of new vehicles are rarebecause the car purchasing process is complicatedand because almost all jurisdictions require theinvolvement of a dealer. Also, as long as onlinesales models do not offer the feel of a realpurchasing experience, most shoppers want to visita dealer. (Of course, a dealership doesnt have tobe the only option for a test drive location; 73percent of the survey respondents said they couldimagine and be comfortable with an alternative).All consumers, from developing and maturemarkets alike, agreed: the two reasons to buy a caronline are for a better price (45%) and, a distantsecond, for an easier and faster transaction (24%).Yet when asked about alternatives to dealerships,Multiple responses allowedSource: CapgeminiFigure 7: Most Important Website Options (% saying important/very important) Capgemini Consulting 2013Ability to comparevehiclesCar configuratorFull range of productinformation and vehicleselectionRetail list price beavailable onlineCost calculator for mydesired vehicleAbility to get a quoteAbility to locate a car anywherein the country that meets myexact specifications3-D product presentationAbility to schedule test drivesTrade-in value informationfor used vehicles10% 20% 300% 5% 15% 25% 35All Markets Mature Markets Developing Markets32333029342427282624262324291920241720241714131413111512111312168the majority of consumers still ranked dealer asthe #2 choice as seller (after the OEM). In the US,car buyers named the dealer their top pick, while indeveloping markets, consumers said they favornon-traditional sources (direct from the manufacturer,50 percent; car rental, 21 percent; and retail store,28 percent). These preferences likely reflect twocharacteristics of developing markets: (1) buyers areless experienced and (2) dealers are not necessarilyconveniently located.In China and India specifically, buyers aresignificantly more willing to look at channels otherthan a traditional dealer, with top choices beingthe manufacturer, an independent online vendor,and a retail store.16
  • Multiple responses allowedSource: CapgeminiFigure 8: Alternatives to Buying From a Dealer (% saying likely/very likely) Capgemini Consulting 2013All Markets Mature Markets Developing Markets1945272416207217403125215023 24212810211 1253Car rental companyI would only buy from a car dealershipMobile salesman coming to my homePetrol Station/Gas stationDirectly from manufacturer (Call center, Website)Independent online vendors (e.g. Amazon)Retail StoreOther0%10%20%30%40%50%Some OEMS and dealers are trying to simplify thebuying process so that most of the transactioncould be completed on-line, without the buyerstepping onto the dealers lot. Like other trendstracked in Cars Online over the years, the interestin on-line buying will likely increase, as OEMs anddealers get more creative and as customerexpectations evolve.Parts are another storyThe purchasing of parts and accessories onlineis strong:n Fifty-nine percent of the surveyed consumerssaid theyre likely to buy parts (such asbatteries, spark plugs, and tires) over theInternet (from a dealer, manufacturer site, oreBay) an increase from 2011, when 56percent said the same. (In developing markets,the 2012 total was 66 percent, up from 65percent last year; in mature markets, it was 51percent, up from 48 percent).n Sixty-six percent of consumers said they wouldbe likely to purchase accessories (such as floormats, specialty mirrors, and seat covers) overthe Internet (up from 62 percent in 2011). Indeveloping markets, the number was 73 percent(up from 70 percent last year); in mature markets,it was 60 percent (up from 55 percent).Everyone agreed: the #1 reason to buy parts andaccessories online is a price discount.To win (or keep) this business, OEMs should beproactive: take a good look at their online presence;review the competition from parts companies andauction sites; understand the unique value ofgenuine OE parts; make the transaction easy forbuyers; and work with their dealer network todistribute parts and accessories.17My Car, My Way
  • Social media gains power(family and friends lose some).In the 2012 survey, 83 percent of respondents indeveloping markets rated user-generated contentas important or very important (in maturemarkets, 59 percent said the same). Consumers inChina are at the top end of this group (most likely tovalue social media); those in Germany are at thebottom (Figure 9). A closer look at the data showsthat, in developing markets, the perceivedimportance of social media has increasedsomewhat over the years.Consumers in developing markets are 50 percentmore likely to purchase because of positivecomments, and 35 percent less likely to purchasebecause of negative comments, than are shoppersin mature markets. In this area that is, the use ofsocial media the survey also exposed a notsurprising gap between younger and olderconsumers (see the sidebar for specific data). At thesame time, the influence of family and friendsdropped to sixth place, from fifth place in 2011 andsecond place in 2010. Of course, there areexceptions by country: consumers in India still ratefamily and friends as most important.Importance of user-generated contentby age and marketAge inYearsMatureMarketDevelopingMarket18-3435-4950+65%57%55%85%83%76%18
  • Source: CapgeminiFigure 9: Importance of User-Generated Content in Dealer and Brand Sites (% saying important/very important) Capgemini Consulting 20132010 2011 20120%20%40%60%54645980%100%626963546558396058 576156768283677973838380788386808193MatureMarketsU.S.U.K.FranceGermanyDevelopingMarketsRussiaBrazilIndiaChinaAll Markets657371The likely explanation for the greater enthusiasmfor social media among buyers in developingmarkets is threefold: (1) they are relativelyinexperienced and, therefore, more likely to gatheras much information, from as many sources, aspossible; (2) the car buying population is youngerand, therefore, more likely to value user-generatedcontent; and (3) in these markets, buyers of allages rely on the Web for information (Figure 10).Just as important, for the first time ever indeveloping markets, the influence of family andfriends dropped precipitously and definitively from first place (2008 to 2011) to fourth place.While the overall percentages stay relatively thesame from year to year (with an average of 43percent of consumers saying that family andfriends are most important), other options(specifically, the car dealer, search engines, andOEMs web sites) just bumped ahead in line. Inmature markets, the decrease in influence offamily and friends is absolute down to 30percent this year, a new low and a decrease inrank to seventh (from sixth last year and fourth forthree years before).Other sources of information deemed important bythe survey respondents include search engines(most important in Russia and China) andmotoring/automotive publications (second mostimportant in France and China). OEMs and dealerswanting to improve business in these countriesshould keep these findings in mind (Figure 11).19My Car, My Way
  • Figure 11: Use of Information Sources to Research Vehicle (% saying)Information SourcesAllMarketsMatureMarkets U.S. U.K. France GermanyDevelopingMarkets Russia Brazil India ChinaCar dealer (both new and used cars) 56 63 64 64 61 64 49 39 57 52 47Vehicle manufacturer websites 47 49 56 55 35 49 46 45 42 51 46Information websites/Independent carvaluation services39 43 54 43 35 39 35 39 19 38 44Search engine 39 32 32 36 27 35 46 52 34 48 51Dealer websites 38 37 44 44 29 32 38 41 39 37 37Family and friends 36 30 29 32 26 33 43 36 38 52 47Specialist motoring/automotive press 35 34 17 37 42 39 37 35 32 34 49Web forums, blogs or internet discussiongroups23 15 13 19 17 13 30 35 17 26 43TV advertising 22 14 16 13 12 13 31 18 27 45 35Print advertising 22 15 18 18 10 15 28 19 27 39 25Auto shows 22 13 10 09 19 14 32 24 21 38 44Independent e-tailer sites 19 18 11 13 14 34 19 21 11 20 24Manufacturer or dealer social media page 16 07 07 08 07 06 24 22 19 29 28Car dealer (used cars only) 14 14 10 17 11 17 14 09 15 17 15Non-specialist motoring/automotive press 13 8 05 11 06 09 17 21 9 15 24Source: Capgemini Capgemini Consulting 2013Multiple responses allowedSource: CapgeminiFigure 10: Use of Social Media and Other Online Tools (% saying) Capgemini Consulting 2013Personal social networking sitesSocial messaging/micro-blogging servicesRSS feedsSocial bookmarking sitesNone of these50%10% 20% 30% 40%0%4531Mature Markets Developing MarketsThird-party automotive blog ordiscussion forumManufacturer social media sitesDealer social media sitesOnline video or photosharing serviceProfessional social networking sitesInformational/encyclopedia sitewith user-generated content441542133211329321528824151444539820
  • Green Carsand AlternativeOwnership OptionsBy 2015, each of the top 20 cities in the world will have a population of 10million or more. The implications for congestion, pollution, crowding,and the cost of owning a car are staggering.Not surprisingly, among our survey respondents, urban consumers are mostinterested in vehicles powered by alternative fuels or advanced technologies(that is, green vehicles) and other transportation solutions (such as carsharing). In some markets, new and emerging public policies in the formof tax incentives, driving privileges, and special parking permits areencouraging people to think in new ways about how they get from A to B.21My Car, My Way
  • Is it Spring in the auto industry?Green is growing.Consumers enthusiasm for electric and hybridcars is growing.When asked What type of vehicle will youpurchase? 39 percent of the surveyrespondents said a green one (up from 29percent in 2011). A deep dive into the data tells theby-market story. Half of the respondents indeveloping markets would consider a greenvehicle, but only 29 percent of those in maturemarkets said the same (Figure 12).Consumers in Brazil expressed the greatest intentto buy an alternative to the conventional vehicleFigure 12: Next Vehicle to Purchase/Lease (% saying)Vehicle TypeAllMarketsMatureMarkets U.S. U.K. France GermanyDevelopingMarkets Russia Brazil India ChinaConventional vehicle (gasoline/petrol, diesel) 61 71 77 84 56 68 50 76 32 48 43Non-conventional Green Vehicle 39 29 23 16 44 32 50 24 68 52 57Alternative fuel vehicle (e.g. natural gas,bio-diesel, ethanol)15 8 5 3 10 13 21 7 46 24 9Hybrid vehicle-electric and combustion engine(e.g. Chevy Volt/Opel Ampera, Toyota Prius)18 16 13 10 28 15 20 14 7 17 42Full electric vehicle (e.g. Nissan Leaf) 4 3 3 1 3 3 6 2 8 9 4Other 2 2 2 2 3 1 3 1 7 2 2Source: Capgemini Capgemini Consulting 201322
  • (68%), followed by the Chinese (57%). In India, 52percent of consumers are open to the idea; inFrance, that number is 44 percent. In maturemarkets, the number of consumers intending tobuy green drops precipitously: US (23%), the UK(16%). In other words, while the UK and France areseparated by a channel, their views on hybrid andelectric vehicles could not be further apart; andwhile China and Brazil have oceans betweenthem, their enthusiasm is similarly high.The arguments in favor of a green car include fueleconomy (50%) and environmental impact (themotivation for 33 percent of those favoring electricor hybrid cars). But cost pops up again whenconsumers cited their #1 reason not to buy agreen vehicle (Figure 13), since these types ofvehicles are premium priced.Fuel economyCost/priceInconvenientre-chargingRangePerformanceReliability/qualitySafetyDesignOtherImage/status symbolImpact on the environmentOther 1412Other cost benefits133501 e.g. tax credit, avoid congestion charges, etc.All Markets All Markets216192831505364Reasons for Purchasing a Green Vehicle (% saying) Reasons against Purchasing a Green Vehicle (% saying)Multiple responses allowedSource: Capgemini Capgemini Consulting 2013Figure 13: Reasons for and against purchasing a "Green Vehicle"23My Car, My Way
  • Interest in electric vehiclesis up, but consumersperceptions are off.When the participants were asked theiropinions about only all electric cars(versus hybrid vehicles), interest was cautious.When asked Thinking about the car you willpurchase/lease next, which one of the followingcategories describes it best? only four percentof all the survey respondents answered fullelectric vehicle, a small bump up from threepercent last year. The likely explanation for thislukewarm response is that consumers think EVsare not viable yet, despite major pushes by OEMsand governments to get electric cars on the road.What about the near-term future? Forty-twopercent of consumers in developing markets saidthey expect EVs to be a viable option within thenext two years. Only 22 percent of consumers inmature markets said the same (Figure 14). TheNissan Leaf, a highly popular EV, has yet to bereleased in the developing markets included in thisCars Online study, so maybe consumers in thesecountries have a reason to be more optimistic.Nonetheless, in both markets, consumers weremore positive one year ago (49 percent and 34percent, respectively). The same top three reasonscited for not buying a green vehicle can be appliedto an EV that is price, an inconvenient or non-existent recharging process, and range per charge.Yet, actual sales belie the markets perception:that is, adoption rates for EVs are strong. Duringthe launch of two plug-in vehicles in the US, saleswere greater than those for a popular hybridduring its comparable two-year introduction adecade earlier this despite the fact that optionsfor charging the vehicle away from home are stilllimited (and having such options is key to gettingthe benefit of driving as far as possible on aelectric charge). Also, some EV owners modifiedelectrical outlet in their home, which likely commitsthem to future purchases.In previous years studies, consumers said homewould be their #1 choice of place for charging anEV. This year, when asked about other possiblelocations, the #1 choice was someplace otherthan work (that is, public locations). Clearly,these cars are not imagined as limited; rather, theyneed to be as flexible and free-ranging as gas-fueled vehicles. An established charging24
  • 42322011 20120204060342240223516313429184942101964506058613810305070All MarketsMatureMarketsU.S.U.K.FranceGermanyDevelopingMarketsRussiaBrazilIndiaChinaFigure 14: Full-Electric Vehicles as a Viable Buying Option in less than 2 Years (% saying)Source: Capgemini Capgemini Consulting 2013infrastructure, such as public charging stations,would go a long way to increasing enthusiasm forEVs. Sixty percent of the survey respondents saidthey would like to pay as you go for a charge(suggesting public charging stations akin to gasstations); 34 percent said they favor a flat rate.To overcome barriers to EV acceptance, OEMshave to collaborate with governments, electricutilities, electric vehicle equipment suppliers, OEsuppliers, and most of all with each other. Agrowth in popularity of plug-in vehicles wouldstrain the current grid. But the construction ofadditional electric supply could very well increaserates, and higher peak charging costs couldnegate the expected benefits from EVs.Collaboration should have as its objective thedevelopment of smart grid technologies thatwould distribute energy efficiently.25My Car, My Way
  • Is car sharing the nextwave (or least big ripple) fordrivers living in big cities?The greatest interest in alternative transportationmodels is in developing markets, whereconsumers express a consideration for vehiclesharing, mobility packages, ride share services,and intermodal double that of theircounterparts in mature markets (Figure 15). A lot ofthe reason for that is urban congestion.Vehicle sharing is the hourly rental of a nearbyvehicle; the fee includes gas and insurance. Indensely populated areas with good publictransportation, expensive parking, and highinsurance rates, owning a car can be a downrighthassle. As an alternative, car sharing gives theconsumer headache-free access to a vehiclewhen its needed no more, no less. If (or when)car sharing catches on, the benefits could beamazing: one well-shared car could replace 10-15vehicles on the street.The new car culture generationOne of the studys sources tells thisfirst-hand story:My daughter is a junior at a state university45 minutes from Motor City, U.S.A. (Detroit,Michigan). Last fall she moved into a house offcampus in downtown Ann Arbor. To mysurprise, right away she signed up for Zipcar.She paid the fee with her smartphone (ofcourse, using an app is second nature to her,if not to her parents) and voila! She hadwheels when needed, say for groceryshopping, without having to ask friends for aride or call a taxi.Our family embodies car culture: we havefour cars in our driveway, including the Volt.So, in that context, car sharing is a real and welcome next step, just right forits payment flexibility, relatively low cost,and lifestyle convenience.26
  • 0%223164586356202350%25%75%0% 50%25%75%Vehicle-Sharing Program Mobility Package Ride-Share Service IntermodalMature Markets Developing MarketsSource: Capgemini Capgemini Consulting 2013Figure 15: Likelihood to Consider Alternatives to Traditional Ownership (% saying likely/very likely)27My Car, My Way
  • Younger consumers (18-34) give vehicle sharing athumbs up: about half say they would consider analternative to buying (their enthusiasm is more thantwice that of consumers aged 50+). When askedwhy, the younger group said they like the greaterflexibility and lower costs in sharing. (Notsurprisingly, vehicle sharing is popular on collegecampuses read the sidebar story).In mature markets, consumers in France andGermany are more likely to consider vehiclesharing than are their counterparts in the US andUK. In developing markets, China and India leadthe way in enthusiasm for car sharing, with Braziland Russia trailing considerably (Figure 16).Rental players like Avis (with its newly acquiredbrand, Zipcar) and Hertz (with its Hertz onDemand business) have a foothold in thisburgeoning marketplace, a fact that challengesstartups to devise competitive, alternativebusiness models. For example, in a peer-to-peerrental model, a company acts as a broker providing customers with a way to access thevehicles, pay with credit or cash, and sign up forinsurance coverage while individual ownersoffer up their cars for hourly/daily rent.One peer-to-peer example has a clearinghouse of more than 10,000 vehiclesfor sharing in San Francisco, San Diego, Austin,Portland, and Chicago. Companies like this can getoff the ground fast: expanded to itscurrent size in less than one year without the samecapital outlay as other car sharing programs. Andfor more rapid growth is likely, asthe enterprise has formed partnerships with, andsecured funding from, some high profile investors.Likely (Very likely or likely) Neither likely or nor unlikely Unlikely (Not at all likely or not likely)Mature MarketsU.S.U.K.FranceGermanyDeveloping MarketsRussiaBrazilIndiaChina100%20% 40% 60% 80%0%All Markets51679151966262747442333222157512425472231701614691219591922133817239392041Figure 16: Likelihood to Consider a Car Sharing Program (% saying)Source: Capgemini Capgemini Consulting 201328
  • Truly ResponsivePersonalizationAs customers spend more time on the Web to kick off the buying process looking at cars, researching features and functions, comparing prices,and joining forums to gauge user satisfaction with brands the visit to thedealers showroom is moving ever closer to the moment of purchase. As onesurvey respondent said, Im kicking tires online.Todays car buyers are, as a rule, more informed and more demanding. Asone survey respondent wrote, Dealers have to stop thinking theyre smarterthan the customer. Another complained, I generally know more about thecar than the salesperson does. Comments like these say more about adealers behavior than his or her expertise. When a shopper loaded withresearch from multiple, often contradictory sources hits the dealer withdozens of questions, the dealer can be caught off guard. Appropriate training not in the automobiles feature and functions, but in customer relationshipmanagement could close this gap between perception and reality.29My Car, My Way
  • Dealers are still the centerof the car buying experience for better or worse!Increasingly, consumers feel the power andconfidence that come from having informationbefore they walk into a dealers showroom. So,its not altogether surprising that the window ofopportunity to sell a car through face-to-facepersuasion is closing (at least a bit). Seventypercent of consumers surveyed said that theymake their first visit to a dealer visit within twomonths before a purchase. Across all markets,40 percent of buyers plan their first visit withinonly one month of purchasing a vehicle (Figure 17).Many consumers visit several dealerships tocompare and contrast offers and to narrowtheir choices.But theres good news for dealersOne-to-two months before a purchase, only 15percent of shoppers have made up their minds.Two-to-four weeks before, only 18 percent are sureof what they want. And two weeks before, only 33percent are sure of what they want (I have decidedon the vehicle and I am ready to purchase), asillustrated in Figure 18. That means 67 percent arestill undecided! And those buyers can beinfluenced, right up to the last moment. Thisuncertainty goes a long way toward explaining whydealers are the top information source forconsumers researching vehicles (56 percent in2012 versus 49 percent in 2011 and 34 percent in2010). But its a fine line. As one respondent said,I like to look at cars without pressure.For the first time ever, dealers are consideredthe #1 source of information by consumers inboth mature and developing markets (56 percentof respondents overall agree, an increase of 65percent since 2010), as illustrated in Figure 19. Inmature markets, dealer influence jumped 80percent since 2010; specifically, 64 percent ofshoppers in the US, UK, and Germany dependon the dealer (compared to 39 percent in Russiaand 47 percent in China). Five years ago, dealerswere ranked #7. The likely cause for this remarkableshift? More than ever, shoppers count on dealersto make sense of everything theyve read aboutand heard about during their pre-buyingresearch process.Who can sort things out? The dealerWhile todays consumers do a lot of research aspart of the shopping experience, theyre oftencoming to the dealers showroom suffering frominformation overload.30
  • 10% 20% 30% 40%0%All MarketsMature MarketsDeveloping Markets1426301884122330211041630291573< 2 weeks 2-4 weeks 1-2 months 2-4 months 4-6 months 6-12 monthsFigure 17: Dealership Visit Time before Planned Purchase/Lease (% saying)Source: Capgemini Capgemini Consulting 2013< 2 Weeks2 - 4 Weeks1 - 2 Months2 - 4 Months4 - 6 Months6 - 12 Months100%20% 40% 60% 80%0%TimetopurchasenextvehicleInitial gathering of information about what vehicles are availableDeciding between two or three specific vehiclesI have not even begun to lookNarrowed down to a "short list" of vehiclesI have decided on the vehicle I am ready to purchaseSource: Capgemini Capgemini Consulting 201332 16 18 33 130 26 25 18 128 27 27 15 328 30 930 330 31 726 629 31 526 9Figure 18: Current Shopping Activity Compared to Time to Purchase Vehicle (% saying likely/very likely)31My Car, My Way
  • Developing markets look at a third moreinformation sources on average than consumersin mature markets, when researching a vehicle.When asked Whats your biggest frustration in carbuying? one Russian said the enormous amountof information that needs to be processed beforemaking a selection while another wrote lots ofcontradictory information. Consumers look todealers to help them make sense of it all.Another big reason consumers lean on dealers isthe cost of a car (potentially staggering for manybuyers). Thirty percent of buyers in developingmarkets will spend more than 50 percent of theirincome on a vehicle (in mature markets, 12percent will do the same). Naturally, with aninvestment this large, the buyer is anxious tomake the best and right decision.Working independently and with OEMs, dealerscan use online resources to help the shopper puteverything in perspective and to improve thein-showroom experience. In other words, dealerscan still make a decisive difference by creating apersonalized, comfortable, satisfying shoppingexperience. A dealers success in putting buyers(and browsers) at ease depends on two behaviors:nThe dealer should recognize and acknowledgecustomers research as adding value to theconversation (for example, the dealer can helpthe buyer reconcile conflicting information). Mostdealers do a good job of this. But some surveyrespondents provided feedback like this: (1) fromthe US, I didnt like the dealer thinking I hadntalready done my research and trying to explainto me what I had already read on the Internet;(2) from France, Fuel consumption is too highrelative to the information provided by thedealership; and (3) from Russia, There was adiscrepancy of information/opinions about thesame car, at the same dealer a contradictionor disagreement it wasnt clear whoto believe.nThe dealer should be careful that the shopperisnt already exhausted. When asked aboutfrustrations during shopping/buying, oneconsumer in the UK said, The time you have tospend researching around and shoppingaround. Often, by the time they get to thedealer, shoppers have hit a saturation point: toavoid overwhelming them even more the dealershould let the buyer lead the conversation.Todays car shopper lives in awired worldAs shoppers become more wired beingonline, all the time they expect dealers to bethe same.All Markets344956+65%+48%+80%Mature Markets633557Developing Markets3340490 10 20 30 40 50 60 70 802010 2011 2012Figure 19: Importance of the Dealer as an Information Source from 2010 to 2012(% saying important/very important)Source: Capgemini Capgemini Consulting 201332
  • 0%10%20%30%40%50%60%70%0%10%20%30%40%50%60%70%44 42 42322337154151381856283239444210693323582627 271538343716281734155130284310Mature MarketsDeveloping Markets Russia Brazil India ChinaAll MarketsU.S. U.K. France Germany01020304050331221282226 27423314362925341840209173622253439271022322024334245162521173018453914202427 26 2532Interactive touch screens-pictures/videosVirtual test drive stationsWi-Fi hotspots for my mobile devicePC with internet accessAbility to transfer data to my mobile deviceOther/Dont know3D virtual vehicle configuratorTablet for me to useFigure 20: Preferred Services in the Showroom (% saying)Multiple responses allowedSource: Capgemini Capgemini Consulting 2013Todays consumers want a digitally enhancedshopping experience which integrates the virtualworld (where theyve already checked out the car,tabulated costs, and blogged with owners) withthe metal and rubber world of the showroom.Does the information theyre getting match acrosschannels? If it doesnt, trust can fly out the window.Once in the showroom, they want multi-sensory,content-rich interactions (Figure 20).33My Car, My Way
  • One survey respondent said she would like to seereviews from people who had already purchasedthe car, ideally in a video Id prefer to hear fromowners rather than experts.As a first step, a dealer wanting to differentiate hisor her showroom should investigate digital tools,such as interactive touch screens, 3-D configurationsoftware, and virtual test-drive programs.Consumers in the US, the UK, France, Russia, andBrazil said that an interactive touch screen is theirtop tool; all the consumers in developing marketspicked the virtual test drive as their #1 or #2 choice,while consumers from Germany liked 3-Dconfiguration software best. In general, consumersin developing markets are more enthusiastic aboutdigital enhancements in the showroom; OEMs anddealers should consider piloting specific services inthose regions most receptive to their use.First contact can make (or break) a sale and that first contact is probably online.Good customer care in the showroom is onething, but before consumers even get that fartheyre expecting attention online (Figure 21) virtual service matters!nSeventy-four percent of the respondents saidthey would go elsewhere if they did not get atimely response from an online request to adealer or OEM (compared to 68 percent whosaid the same last year). And by timely 54percent meant four hours or less (faster thanlast year).nEighty-one percent of the respondents said theywould go elsewhere if they did not get a highquality response from a dealer or OEM (up from76 percent in 2011).Clearly, everyone is on the hook to react to onlinebrowsers with the same attention andprofessionalism theyd show a face-to-faceshopper. If they dont, todays consumer willclick away right to the competition. As onesurvey respondent wrote, I feel I have to contactfive-to-seven dealers to find a good one onewith good prices, good sales people,good service, and a good showroom.6874657273752011 2012All MarketsResponse Took too LongPoor Qualty ResponseMature MarketsDeveloping MarketsAll MarketsMature MarketsDeveloping Markets768172818281Source: Capgemini Capgemini Consulting 20130% 20% 40% 60% 80% 100%Figure 20: Look for Another Dealer, Manufacturer or Both Based (% saying)34
  • Communication counts,but only if its done right.Bracketing the buying experience areopportunities to talk to customers: beforethe sale through the website and after the salethrough targeted, direct communications. In everycase, consumers expect authentic, personalcommunication and attention.OEMs and dealers want to communicate with thebuyer after a sale for many reasons: to providevehicle specifications through owners manualsand quick reference guides; to inform the ownerabout recalls or service schedules; to build brandawareness through newsletters and magazines;and to develop a relationship with the customerthrough offers, promotions, events, and otheractivities. Among the 16 different types of post-sale communication, none was universally favoredby the survey respondents. Yet, the top rankedones included information about vehicle justpurchased (48%), alerts about special sales offers(35%), and service reminders (35%) (Figure 22).When it comes to communication method,consumers do not prefer regular mail or voicemail or texts or phone calls or in-car(dashboard) messages rather all of the aboveis the right approach. This does not suggest adesire for a lot of communication, all the time;instead, consumers want to be contacted with theright content, at the right time, through the rightchannel, based on each persons preferences.The most obvious conclusion: the OEM and dealerneed to ask the customer! The survey askedconsumers who found communication importantwhether it would affect their decision to buyanother car from the same OEM/dealer (see Figure22 for their answers). A personalized communicationstrategy requires an investment, first in getting toknow each customers wants and needs, and thenin building a flexible content management systemcapable of supporting a customer-specific program.35My Car, My Way
  • Figure 22: Important and Channel Preference for Post-Sale Communication (%)Type of CommunicationAll MarketsImportance Preferred ChannelUseful IncreaseLoyaltyRegularmailE-mail MobilephoneText /SMSIn carmessageBrochures/information about the vehicle that you bought/leased 48 24 48 40 3 5 4Alerts about special sales, offers, promotions, etc. 35 20 11 64 9 14 2Service reminders 35 16 12 45 13 19 11Alerts and information about vehicle or accessory recalls 34 14 18 54 12 11 5Detailed post-service report and follow-up by dealer 31 18 20 59 11 7 3Post-test drive survey 30 16 10 65 13 9 3Welcome pack after purchase/lease 30 14 45 33 11 8 3Customer satisfaction survey after purchase 29 15 11 66 14 7 2Personalized repurchase offer/promotion matched to your needs twoyears after purchase27 18 24 52 12 10 2Customer satisfaction survey after service 24 12 10 67 13 8 2Personalized communication/gift after a complaint 22 10 37 32 22 7 2Brand magazine 18 8 45 34 9 9 2Invitations to special events, open house days, etc. 17 8 25 53 10 10 2Newsletters 15 7 16 62 9 11 2Invitation to exclusive owners clubs 14 6 25 46 14 12 3Other sales offers 11 5 19 61 7 10 3Source: Capgemini Capgemini Consulting 201336
  • Celebrate! Loyalty is upfor OEMs and dealers.Loyalty grew from 2011 to 2012 a remarkable10 percentage points for brands and sixpercentage points for dealers. In mature markets,the bump is even greater for brands up15 percentage points!For the car buyer in 2012, service meanscustomer care not just in the repair shop, but inthe showroom, during the sales process, andthrough pre- and post-sales communication. In thislarger context, service begets trust, and trustgrows loyalty. What does good service look like?Heres how one U.S. consumer described herdealers behavior: The service is excellent;follow-up is excellent. We have an assigned servicemanager: he knows us; he knows our car. Really,hes kind of like family now. But, at the otherextreme, in describing poor customer service, onerespondent was poetic: In the dealers showroom,I felt like a fish in a shark pond.Customer goodwill begins with the buyingprocess. Among consumers, overall satisfactionlevels have reached new heights: 74 percent of thesurvey respondents said they were satisfied orvery satisfied with their most recent shoppingexperience (Figure 23). On average, the numberstrend a little higher in developing markets.When it comes to loyalty, franchise dealers havean advantage for vehicle repairs and especially inmature markets. Next in rank are independentfull-service stations. Specialty service shops andother options, such as self-service and family andfriends, have decreased in consumer favor,certainly because of the technological complexityof todays new cars.What is loyalty and how isit measured?In the Cars Online 12/13 study, loyalty means twotypes of consumer behavior: (1) the repurchase of abrand or model and (2) the purchase of another car(any brand/model) from the same dealer. Purchaseintention (the focus of this study) is clearly forward-looking view: the findings reflect consumersanticipation of their next car (thus, the loyaltymetrics in this study might not correlate exactlywith those of the more accurate research of OEMswhich looks at actual sales).37My Car, My Way
  • Source: Capgemini Capgemini Consulting 20132008All Markets2009Mature Markets2010 2011 2012Developing Markets0%20%10%40%30%60%50%80%70%90%6769 7072 74485461646776 7780 81 81Figure 23: Satisfaction with the Overall Buying Process (% say satised/very satised)That said, when the survey asked participants How likely are you to purchase the same make asyour primary car? 71 percent of consumers inall markets said they would (up from 61 percent in2011). In mature markets, 69 percent said likelyor very likely (up from 54 percent in 2011); indeveloping markets, 73 percent said the same (upfrom 69 percent in 2011). Each of these numbersrepresents a five-year high across markets.When the survey respondents were asked How likely are you to purchase from the samedealer? 54 percent of consumers in maturemarkets replied likely or very likely (up from 45percent in 2011) another five-year high formature markets! Given these numbers, its notsurprising that the answer not at all likely topurchase is at a three-year low across the board.While many factors drive loyalty, the survey lookedat three: the quality of post-sale communications,the value of service contracts, and satisfaction withthe buying and service processes. Positive trendsin all three factors strongly suggest that the trend loyalty is up is no fluke but, rather, the resultof OEM/dealers collaboration in planning andexecuting programs, particularly in mature markets.38
  • Service is a lot morethan repair work.After-sale service is more important thanever because buyers are keeping their carslonger (the reasons for that range from betterquality vehicles to an economic downturn). In fact,according to an industry report from Polk, thenumber of cars a typical US consumer will own ina lifetime could drop as much as 25 percent. Giventhese trends, the way survey respondents answeredthis question How do you decide on the car youwant? was hardly a surprise: 88 percent rankedafter-sales service among the top five deal-makers(or breakers) along with reliability of brand (94%),price of vehicle (91%), safety (90%), quality ofinterior and exterior styling(both at 87 percent).Service satisfaction has increased each of the lastfour years for all customers (Figure 24). Sixty-twopercent of consumers are likely to purchase avehicle from the dealer who services their currentvehicle, up from 56 percent one year ago. Also,the favored location for service is the franchisedealership, according to 64 percent of the surveyrespondents (compared to 49 percent last year).The top three reasons for choosing a specificservice provider are quality (35%), proximity tohome (21%), and price (19%), as illustrated inFigure 25. As more customers are more pleasedwith the service experience, and as moreconsumers choose the franchised dealer as thepreferred service provider, loyalty increases.So, how does a dealer do better than that? Byleveraging smartphones and connected carservices to boost satisfaction even more. Thetwo features that support after-sales servicereminders and parts/conditions monitoring arehighly valued by consumers. These (and related)features would make it easier for customers topractice preventative maintenance, thereby (ideally)increasing the life of the car and decreasing thetotal cost of ownership.Echoing previous years reports, the Cars Online12/13 confirms that for a dealer to build, keep, andgrow customer loyalty, he or she needs a well-designed service contract. Seventy-five percent ofconsumers said that the service contract influencestheir purchasing decision. A stunning 90 percent ofcustomers in developing markets, and 62 percentin mature markets, said they are more likely tobuy from a manufacturer or dealer with an idealservice contract.39My Car, My Way
  • 2009All Markets2010Mature Markets2011 2012Developing MarketsSource: Capgemini Capgemini Consulting 20130%20%10%40%30%60%50%80%70%7173 737666697275 74787578Figure 24: Satisfaction with Most Recent After-sales or Service Experience (% say satised/very satised)Mature MarketsU.SU.KFranceGermanyDeveloping MarketsRussiaBrazilIndiaChina100%20% 40% 60% 80%0%133817239Price Location/proximity to home Location/proximity to work Quality of serviceRating of servicing location (given by accreditation agency) Existing relationshipExtended hours of operation (evening hours and weekends) OtherAll Markets3575913211920181919192022222121232336 1723242766555 55299 99 92777755529 22222 2230304040404331333313181818181388141011 44461111116Figure 25: Primary Reason for Vehicle Servicing Location (% saying)Source: Capgemini Capgemini Consulting 201340
  • But what constitutes ideal in aservice contract?In mature markets, a replacement vehicle (aloaner) is a most wanted feature (required by50 percent of consumers in this group), followedby an extended warranty and free inspections(Figure 26). In developing markets, consumers alsowant these considerations, but the majority (52%)most value vehicle insurance (compared to only 18percent in mature markets). Generally, customers indeveloping markets generate a higher demand forservice contracts, but that varies from one countryto the next. Overall, customers (1) want servicecontracts that recognize their needs and theexigencies of the local environment and (2) say thata good service contract would positively influencetheir buying decision.Of course, its one thing to promise greatmaintenance service, and quite another to deliver it.In developing markets, 40 percent of consumerssaid that quality is, by far, the primary reasonfor choosing a service provider (only 18 percentsaid price). OEMs and dealers need to monitorthemselves against the high standards theyve set.One survey respondent made a good suggestion:Better coordination between manufacturer andmechanic to improve technical quality of service.Mature Markets Developing MarketsReplacement vehicle when own caris being servicedExtended warrantyInspection includedOther repairs includedVehicle insuranceCustomer care (e.g. access to premium connect online,VIP treatment, access to exclusive events, etc.)Towing/roadside assistance includedRepair/labour includedTyre/Tire replacement includedWear parts includedLeasing/financing of vehicleMultiple responses allowedSource: Capgemini Capgemini Consulting 20130%5044414936453539344031352935272324291817295210% 20% 30% 40% 50% 60%Figure 26: What Consumers Want in a Vehicle Service Contract (% saying)41My Car, My Way
  • Conclusion andRecommendationsThis years study shows that consumers wantit all: industry-altering technologies, greencars and alternative ownership options, andtruly responsive personalization. What does thatsuggest? OEMs and dealers have to be poisedfor new and expanding opportunities to be onthe spot in the right place (which is increasinglyvirtual), at the right time (which is increasingly 24/7),with the right combination of products and services.Here are a few reasonable steps to consider basedon the findings from Cars Online 12/13.Adopt a customer-obsessed cultureThe worlds most successful companies share acommon characteristic: theyre obsessed withtheir customers. The progress made in the past 20years in the auto industry might be attributable tothe same focus: win the satisfaction of customersby making a great product, at a fair price, backedup by high quality buying/owning experience. Infact, the two factors influencing whether a personwill buy a particular car are (1) the features of thevehicle (such as safety, reliability, styling, andperformance) and (2) the customer experience ofbuying/owning.While the value of each the car and the experience varies by individual buyer, this years survey revealsa perspective important to dealers and OEMs: that is,a quality customer experience is better than pricediscounts and incentives for generating sales,improving loyalty, and enhancing the brandBe sharp onlineGiven the ubiquity and power of the Web as arich source of information; as a forum for trendsetters, opinion-trackers, and consumers eager toshare experiences; as a shopping mart wherebuyers can instantly compare products, prices,and service performance; and as a post-salesconnection to customers OEM and dealersmust continue to master this channel. Informationon the website needs to be accurate and relevant;everyone should consider incorporating user-generated content on the website. Directcommunication with customers needs to reflecteach ones preferences, not just in content butalso in channel and timing.Digital leads are good leads! A website is often anOEMs or dealers first contact with an interestedshopper. Quick wins can come from a timely,quality response to digital leads. (On the otherhand, each year shoppers are more unforgiving iftheir inquiries are not addressed quickly andthoroughly). Its hard to believe that some OEMand dealers still struggle in this area: the averageresponse time to an inquiry is 24 hours or more,while a significant percentage of leads are notpursued at all (or responses are inadequate orill-considered). Excellent IT systems and tools aresub-optimized if the dealers lead managementprocess is sub-par. OEMs and dealers shouldcollaborate on developing and implementing bestpractices for lead management and for post-implementation monitoring.Build meaningful relationshipswith customersConsumers who live in a wired world expect anamazing amount of personalized attention. Luckily,the technologies that create these expectations canalso be used to meet them. For example,connected car technologies yes, its only amatter of time until these are standard generate a lot of big data for OEMs and dealers:why not use it to develop real, mutuallyadvantageous relationships with customers,perhaps by reaching out with value-added (but free)information, by addressing a car owners needsproactively, or by tailoring post-sale messaging toreflect each customers expressed interests?Major planning is needed to make possible thecollection, analysis, use, and sharing of the data.OEMs and dealers need to work together toensure that customer value is at the center of thiseffort. Customer loyalty to brands and dealers is up:its a good time to build on that momentum.Embrace new technologiesConsumers want a seamless buying experience,in which online and offline channels are fully42
  • integrated. This expectation has at least threeimportant implications:1) The showroom experience should be enhancedwith new, digital technology that enriches theshoppers access to information and enablesdealers to take full advantage of the limited timeavailable to engage with consumers.2) OEMs and dealers need to capture theircustomers channel preferences and then usethis information to personalize post-salecommunications. Short of doing this, OEMsshould use predictive analytics and rule-basedengines to build customer segment profileswhich would, in turn, make possible successful,targeted messaging.3) OEMs should continue to improve the mobilityexperience, since smartphone consumerswant to use apps for such services as onlinereminders and scheduling. The good news?Mobile solutions provide a competitivedifferentiation and establish a one-to-oneconnection with the customer.Consider more online sellingConsumers are buying parts and accessoriesonline, searching for transactions that are cheaper,more convenient, and risk-free. But third-partysuppliers are getting most of this business. OEMscould use their built-in distribution locations (that is,their dealers) and leverage their IT systems as thebasis for an online shopping channel.When dealer personnel are involved with selling/distributing products online, it does more thangenerate revenue; it also creates an opportunity todevelop an active relationship with actual orpotential customers. As for selling cars online,OEMs and dealers need to enhance their websiteswith sophisticated tools to support these buyingactivities: interacting with the dealers staff, gettingprice quotes, negotiating, and evaluating a trade-in.Be prepared for even moretechnological advancesIn the future, will a car drive itself from the factoryfloor to its owners driveway? Yes! The technologyin connected cars, coupled with advanced andstill-emerging vehicle sensors, are paving the wayfor driverless cars and, along with them, thepromise of reduced urban congestion andpollution, to say nothing of a productive morningcommute! Right now, small fleets of driverless carsare being tested in different markets. Industryleaders are capturing data from these pilots,establishing future standards for design andsafety, and continuing to dream of a better car.The lesson learned? As Mark Twain said, Thesecret of getting ahead is getting started.Capgeminis Cars Online 12/13 study presentsthe headline findings of our annual automotiveconsumer research. The survey data gives rise touse insights about consumers expectations anddesires insights you can adapt and apply toachieve better business outcomes. To take adeeper dive into our Cars Online research or toexplore its implications for your companysposition in a dynamic industry, please contact:Germany / Rest of WorldMarkus Winklermarkus.winkler@capgemini.comDr. Bjrn Harmsbjoern.harms@capgemini.comUSAScott Clarkescott.clarke@capgemini.comScandinaviaHakan Copyright 2013 Capgemini U.S. LLC. All rights reserved. The information contained herein is general in nature and is not intended, and should not be construed, as professionaladvice or opinion provided to the user. This document does not purport to be a complete statement of the approaches or steps, which may vary according to individual factors andcircumstances, necessary for a business to accomplish any particular business goal. This document is provided for informational purposes only, on an as-is basis.United KingdomSteve Freshwatersteve.freshwater@capgemini.comFranceJean-Baptiste Rougejb.rouge@capgemini.comEmmanuel Gavacheemmanuel.gavache@capgemini.comMiddle EastJawad Shaikhjawad.shaikh@capgemini.comChinaTracy Qingping Liuqingping.liu@capgemini.comIndiaVikas Kumarvikas.g.kumar@capgemini.com43My Car, My Way
  • About Capgeminis Automotive PracticeCapgeminis automotive practice serves 14 of the worlds 15 largest vehiclemanufacturers and many of the largest automotive largest automotive suppliers.More than 2,500 automotive specialists generate value for companies throughglobal delivery capabilities and industry-specific service offerings such asIntegrated Lead Management, B2C Web Strategy, Service and Parts Management,Supplier Transformation, Optimization of Dealer-Focused Operations, ElectricVehicles and Mobility Services, Application Outsourcing for Automotive forAutomotive Manufacturers, and Global Emerging-Market Sourcing.For more information go to: Capgemini ConsultingCapgemini Consulting is the global strategy and transformationconsulting organization of the Capgemini Group, specializing in advisingand supporting enterprises in significant transformation, from innovativestrategy to execution and with an unstinting focus on results. With thenew digital economy creating significant disruptions and opportunities,our global team of over 3,600 talented individuals work with leadingcompanies and governments to master Digital Transformation, drawingon our understanding of the digital economy and our leadership inbusiness transformation and organizational change.Find out more CapgeminiWith more than 125,000 people in 44 countries, Capgemini is one of theworlds foremost providers of consulting, technology and outsourcingservices. The Group reported 2012 global revenues of EUR 10.3 billion(more than $13 billion USD).Together with its clients, Capgemini creates and delivers business andtechnology solutions that fit their needs and drive the results they want.A deeply multicultural organization, Capgemini has developed its ownway of working, the Collaborative Business ExperienceTM, and draws onRightshore, its worldwide delivery model.Find out more information contained in this document is proprietary. 2013 Capgemini. All rights reserved.Rightshoreis a trademark belonging to Capgemini.the way we see itAutomotive


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