connecting with gen y making the short list€¦ · connecting with gen y: making the short list 6...

Connecting with Gen YMaking the short list

Executive summary2009 survey findings

Connecting with Gen Y: Making the short list

Deloitte Automotive Generation Y SurveyGeneration Y: Making the short list

Contents

Introduction 1

Factors that influence purchasing decisions 2

Vehicle brand and origin preferences 3

Sustainability and ecological factors 6

Online resources for vehicle shopping 9

Vehicle affordability and value 12

Buying experience 14

2008-2009 survey benchmark questions 17

Contacts 20

About the survey 20

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Connecting with Gen Y: Making the short list 1

Deloitte Automotive Generation Y SurveyGeneration Y: Making the short list

Introduction

If the largest generation since the Baby Boomers has its way, Generation Y might just be the group to help jump start the U.S. automative industry. At 75 million strong and coming of age, this generation may have what it takes to re-shape everything, including America’s wavering automative industry. According to a new Deloitte survey, in collaboration with The Eli Broad Graduate School of Management at Michigan State University, Gen Y consumers may have an increasingly positive view of everything from auto jobs to American-made vehicles.

As a follow-on to last year’s Deloitte’s survey “Connecting with Gen Y: Making Cars Cool Again,” this analysis takes a deeper look at Generation Y’s attitudes and perceptions of vehicles and the auto industry. The survey, “Gen Y: Making the Short List” offers unique insights into what may capture the attention and shape the opinions of this generation.

The following key findings emerged in the 2009 Deloitte Automotive Gen Y survey.


Factors that influence purchasing decisions

Please indicate the top three items, options, or features that a car must have for you to even consider buying it; these should include the top three things that were “critical to your vehicle purchase decision”

0.0%

5.0%

10.0%

15.0%

Automatic transmission

ReliabilityCD playerSafetyAir conditioning/

heat

Power locks and

windows

Interior room

Exterior styling/looks

Affordability/price

Gas mileage

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12.2%

6.9%

5.5%5.0% 4.7% 4.4% 4.2%

3.4%2.7%

3.2%

Even Gen Y has changed the way they make purchasing decisions because of the economy. The top “must-have” features are gas mileage and affordability/price. These results are in sharp contrast with last year’s data. The 2008 survey pointed to safety as the most important factor, followed by comfort.


Vehicle brand and origin preferences

I would consider a vehicle from a brand that is currently, or has recently been, in bankruptcy

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Strongly agree

9876Neutral432Strongly disagree

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14.8%

8.3%9.7%

8.2%

22.4%

11.6%

9.6%

7.4%

3.8%4.2%

The majority of Gen-Y respondents would at least consider purchasing a vehicle from a manufacturer that has filed for bankruptcy. 36.6% said they would consider buying a vehicle from a brand that is currently or has recently been in bankruptcy, with 22.4% remaining neutral on the subject.


Vehicle brand and origin preferences (cont.)

Buying an American automotive manufacturer brand is an important factor

0.0%

5.0%

10.0%

15.0%

20.0%

Strongly agree


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15.5%

7.9%7.1%

9.2%

17.1%

10.0%

8.1%8.9%

10.0%

6.3%

Gen Y respondents were split regarding whether it’s important to purchase an American automotive manufacturer brand. 43.3% say it is important, whereas 17.1% remain neutral and 39.7% said it’s not that important. The response to this question is interesting because in the past during times of war and recession, people historically have purchased American items to help stimulate the economy.


Vehicle brand and origin preferences (cont.)

Buying a vehicle produced in an American factory is important (i.e., a Honda Accord produced in the U.S. vs. a Ford produced in Mexico)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Strongly agree


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9.2%

5.5%4.5%

7.3%

20.7%

10.9%

12.9% 12.7%

9.3%

7.0%

The “Made in the USA” label still carries a lot of weight, especially for the Gen Y respondents when it comes to automotive purchasing habits. The majority of Gen Y respondents (52.8%) said it’s important that the vehicle they purchase is manufactured in an American factory. This could be tied to this generation’s desire to help keep jobs in the U.S. and reduce unemployment.


Sustainability and ecological factors

The environment is an important factor when purchasing a vehicle

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Strongly agree


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4.8%

1.4%

3.7%4.9%

12.0% 11.5%

14.9% 15.2%

20.6%

11.0%

The type of vehicle I drive makes a difference in addressing global and local concerns about the environment

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Strongly agree


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9.7%

5.0%

7.2% 6.7%

21.6%

13.9% 13.0%

10.8%

6.8%5.3%

While safety and reliability do not appear to be factors the Gen Y respondents would pay more for, environmentally friendly vehicles that save money on energy costs and help improve the environment are very important to this group.

73.2% of respondents agree that the environment is an extremely important factor when purchasing a vehicle, while •49.8% of respondents agree that the type of vehicle they drive directly affects the environment.

Additionally:

52.5% would pay more for an environmentally-friendly vehicle.•

64.4% would pay more for a vehicle that is better for the environment AND saves money on energy costs, but 44.4% •would NOT pay more for a vehicle if it did not save money on energy costs even if it was better for the environment.


Sustainability and ecological factors (cont.)

Relationships between the U.S. and oil-producing nations are a factor

0.0%

5.0%

10.0%

15.0%

20.0%

Strongly agree


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7.6%

3.2%

5.0%

6.6%

17.7%

15.3%14.5%

12.1%

10.4%

7.5%

Nearly 60 percent (59.8%) of Gen Y respondents agree that the relationship between the U.S. and oil-producing nations is a factor when purchasing a vehicle.


Sustainability and ecological factors (cont.)

When considering a vehicle, please indicate what type of sustainable technologies would impact your purchase favorably (multiple selections permitted per respondent)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Sustainable technology

doesn't affect my decision

None of these technologies would affect my decision

A manufacturer that recycles automobile components

Electric engine (battery or

plug-in)

Clean diesel engine

Ethanol and gasoline

engine (E85)

Hybrid engine (gasoline

and electric)

Standard gasoline engine with

high fuel efficiency

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22.8% 22.3%

12.9% 12.4% 12.1%10.6%

3.7% 3.2%

The majority of Gen Y respondents believe that some form of energy-efficiency and sustainable technology is important when purchasing a vehicle. Only 6.9% said that sustainable technology would not affect their decision. Additionally, more than half (51.8%) of Gen Y respondents would be willing to pay more for a vehicle from a manufacturer recognized as eco-friendly.


Online resources for vehicle shopping

When shopping for a vehicle, I visit social networking groups (Facebook, etc.) to get more information about a brand or model

25%

11%

Disagree Neutral Agree

64%

The majority (64%) of Gen Y respondents do not get their information on a vehicle brand or model from social networking sites.


Online resources for vehicle shopping (cont.)

When shopping for a vehicle, I visit car forums/blogs/Twitter to get more information about a brand or model

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Strongly agree


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30.8%

11.5%9.5%

6.4%

11.1%

7.6% 7.4%5.6% 5.8%

4.4%

Social media sites and blogs may be the biggest way for Gen Y to communicate, but these forums don’t help sway purchasing decisions for Gen Y respondents, when it comes to vehicles. More than half (58.2%) do not look for vehicle advice on blogs or other social media forums before purchase.


Online resources for vehicle shopping (cont.)

When shopping for a vehicle, I use Google or Yahoo! Searchto bet more information about a brand or model

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Strongly agree


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6.1%

1.6% 2.2% 2.2%

7.9% 8.6%

13.8%15.5%

27.3%

14.7%

While most of the Gen Y respondents do not look at blogs or social media sites for information on a vehicle, the majority (79.9%) use Google or Yahoo! to search for information.


Vehicle affordability and value

I am more likely to purchase a used vehicle over a new vehicle in the future

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Strongly agree


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8.7%

4.2% 4.7% 5.3%

13.2%

8.2%

11.9%

14.9%

20.3%

8.6%

The Gen Y respondent typically thinks “newer is better” but not when it comes to cars. More than 63% believe that used vehicles are a greater value than new vehicles and they’re more than three times as likely to purchase a used vehicle over a new one.


Vehicle affordability and value (cont.)

I would prefer to know the final selling price upfront, eliminating vehicle incentives from the vehicle purchase equation (selling prices vs. MSRP)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Strongly agree


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0.8% 0.6% 1.4% 2.2%

10.0% 10.1%

13.9%15.9%

30.9%

14.2%

The Gen Y respondents were lukewarm when it comes to vehicle incentives. The majority (85%) would gladly eliminate vehicle incentives from the purchasing equation if it meant they could simply know the final selling price upfront.


Buying experience

I would like to be able to test-drive a vehicle for 24 hours

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Strongly agree


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4.7%3.1%

4.6%6.0%

12.4%

8.3%

13.2% 13.9%

23.0%

10.7%

Having an adequate trial run is important to Gen Y respondents. According to the survey, nearly 70% would like to test-drive a vehicle for 24 hours before making a decision and 23% strongly agree.


Buying experience (cont.)

I would prefer to purchase without negotiating with a salesperson

0.0%

5.0%

10.0%

15.0%

20.0%

Strongly agree


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6.8%

4.7%5.8%

7.1%

14.2%

12.1% 11.5%12.9%

16.6%

8.3%

More than 60% of the Gen Y respondents would prefer to skip price negotiations with a salesperson.


Buying experience (cont.)

I would prefer not to haggle over the price of a car

0.0%

5.0%

10.0%

15.0%

20.0%

Strongly agree


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8.4%

4.4%

6.5% 6.7%

12.1% 11.6% 11.0% 11.3%

18.2%

9.9%

Nickel and diming, wheeling, dealing and schmoozing do not work for Gen Y respondents. More than 62% prefer a straight forward, no-hassle process when purchasing a vehicle. Further they indicated their preference for getting the information they need over the Internet from the dealer rather than having face-to-face conversations with salespeople.


2008-2009 survey benchmark questions

Do you think that, five years from now, you will be driving the same vehicle brand that you are currently driving? (2008 data)

28%

45%

Expect to drive same vehicle Unsure Do not expect to drive same vehicle

27%

36

6877726580

34

35221530

20

957282

7565

37

424045

50

Do you think that, five years from now, you will be driving the same vehicle brand that you are currently driving? (2009 data)

Yes No

36

6877726580

34

35221530

20

957282

7565

37

424045

50

58%

42%

Brand loyalty is back for Gen Y respondents. In the 2008 survey, only 27% of respondents said they expect to be driving the same vehicle brand in five years compared with 42% of respondents in the 2009 survey. This indicates that respondent’s loyalty to a specific brand has increased by more than 15 percentage points year over year.


2008-2009 survey benchmark questions (cont.)

What type of vehicle do you see yourself driving in five years?

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Station wagon

OtherHatchback Crossover (nonluxury)

ConvertibleMinivan/van

TruckCoupe (two-door)

HybridLuxury crossover or sedan

Sedan (nonluxury)

SUV

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23.0%

19.0%

15.0%

11.0%

8.0% 8.0%

5.0%4.0%

2.0% 2.0%1.0%

3.0%

2008 2009

What type of vehicle do you see yourself driving in five years?

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Station wagon

OtherHatchback Crossover (nonluxury)

ConvertibleMinivan/van

TruckCoupe (two-door)

HybridLuxury crossover or sedan

Sedan (nonluxury)

SUV

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23.0%

19.0%

15.0%

11.0%

8.0% 8.0%

5.0%4.0%

2.0% 2.0%1.0%

3.0%

2008 2009

SUVs are making a comeback. As the economy slowly rebounds and the price of gas remains lower than 2008, the Gen Y respondents demand for SUVs is increasing. Nearly one in four (23%) said they see themselves driving an SUV in five years, up from only 11% last year.


2008-2009 survey benchmark questions (cont.)

Jobs in the auto industry are making a comeback. In 2009, only 50.3% of Gen Y respondents found the idea of working in the auto industry unappealing, that’s down from almost 70% in the 2008 survey.

How appealing or unappealing is the idea of working in the U.S. auto industry? (2009 data)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Very appealing

9876Neutral432Very unappealing

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23.6%

8.0%9.4% 9.3%

15.2%

8.9% 9.2%

7.3%5.8%

3.2%

How appealing or unappealing is the idea of working in the U.S. auto industry? (2008 data)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Very unappealing

Somewhat unappealing

Somewhat appealing

Very appealing

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8.0%

24.0%

28.0%

41.0%

Contacts

Michelle Collins U.S. Automotive Sector Leader Partner Deloitte & Touche LLP Tel: +1 313 396 3219 Email: [email protected]

Mark Gardner U.S. Automotive Consulting Leader Principal Deloitte Consulting LLP Tel: +1 313 324 1178 Email: [email protected]

For more information on Deloitte Automotive Gen Y study visit www.deloitte.com/us/genyconnection

About the Survey

The survey developed and administered by Deloitte in cooperation with The Eli Broad Graduate School of Management at Michigan State University. The survey included 1,100 participants aged 18 to 30. Respondents were randomly drawn from a panel of individuals who agreed to participate in online surveys and the random sample was designed to mimic the ethnic and regional profile of the United States.

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication

Copyright © 2010 Deloitte Development LLC. All rights reserved.

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