Gen Y to change the tide of hybrid market, survey says
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Gen Y consumers are attracted to hybrid technology because of improved fuel economy, but they don't want to be inconvenienced by having to plug in their vehicles. |
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DETROIT -- Generation Y, the largest group of consumers since the baby boomers, has spoken out about what it wants from the auto industry: a hybrid vehicle with in-car connectivity systems that will not compromise safety.
In a new survey designed to take the pulse of consumers and their purchasing intentions, the Deloitte consulting firm found that 59 percent of Gen Y respondents showed an interest in buying an electrified vehicle.
"For the first time it looks like Gen Y is saying: 'We're the ones that, if we could, would be purchasing that hybrid technology,'" said Craig Giffi, automotive practice leader for Deloitte.
Gen Y -- consumers age 19 to 31 -- represents nearly 80 million consumers in the United States, Deloitte estimates, and could account for 40 percent of all vehicles sold over the next 10 years.
“When millenials are ready to buy a vehicle, they consider nearly twice as many vehicles as baby boomers,” said Mark Fields, head of Ford Motor Co.'s Americas unit. “This is a generation of consumers that has to be reckoned with.”
The survey found that 57 percent of Gen Y consumers expressed an interest in hybrid vehicles; 2 percentwere interested in pure battery vehicles; and 37 percent favored vehicles with a traditional gasoline-only powertrain.
Gen Y consumers were mostly driven to hybrid technology because of improved fuel economy, Giffi said. And although they're concerned about the environment, they don't want to be inconvenienced by having to plug in their vehicles, he said.
More technology
But they are increasingly interested in spending money on additional features for their vehicles, too.
Gen Y consumers are willing to spend more than $3,000 for hardware that delivers connectivity, said Joe Vitale, global automotive sector leader for Deloitte's parent company, Deloitte Touche Tohmatsu Ltd.
"They're big, influential, resolute in their views and more tech savvy than any other generation we've ever seen, and generally more affluent," Fields said Wednesday during a panel discussion on Gen Y in Detroit.
For millenials, especially, technology has become an accessory, Fields said
“Younger consumers expect the latest and greatest and virtually on-demand,” he said. “We understand this not only requires a greater speed [of development] but also requires us to take greater risks.”
Gen Y consumers are already having an immediate impact: They will purchase one in four new automobiles sold in the United States this year, Deloitte says.
"Gen Y consumers clearly view their automobiles as more than just a way to get from point A to point B," Vitale said in a statement.
Fifty-nine percent ranked in-dash technology as the most important part of a vehicle's interior and almost three-quarters of all respondents sought touch-screen interfaces.
And 77 percent of Gen Y respondents said they would like to buy more accessories and upgrades for their vehicles on an ongoing basis.
"Auto manufacturers may have an opportunity to capitalize on Gen Y's connected lifestyle by developing innovative and low-cost personalization options," Vitale said in the statement.
Maintain safety
The survey also found Gen Y consumers are willing to spend an extra $2,000 for a bundle of safety features such as collision avoidance systems, blind spot detection and sleep alert systems, the survey found.
Said Giffi: "They're wholly acknowledging that distracted driving is an issue but they're not saying that they want to be any less connected in the car."
Now, he says, they want the technology that makes it safer to do such things.
"It's almost as if they're saying 'I'm going to be distracted, so I want the car to give me protection from myself,'" Giffi said. "The safety technology they want is the next generation of accident-avoidance technology."
The annual survey, now in its fourth year, is carried out with help from students and researchers at Michigan State University, Carnegie Mellon University and UCLA, canvassing 1,500 consumers in the United States.
It also surveys 250 Gen Y consumers in China and 300 Gen Y consumers in western Europe.
Complete results from the survey will be released in February.
