Navigating the customer journey UK perspectives from Deloitte s Global Automotive Consumer Study

Navigating the customer journey UK perspectives from Deloitte s Global Automotive Consumer Study

Key findings How do consumers feel about autonomous vehicles? Consumers are more positive about fully self-driving vehicles Consumers still want an established track record for autonomous vehicles Speaking of trust, most consumers put their faith in OEMs How do consumers feel about electrified vehicles? Slightly fewer consumers want gasoline/diesel (ICE) engines going forward Driving range is still a significant concern for all battery-powered electric vehicles (BEVs) If consumers can get past the upfront price premium, more would consider going electric for their next vehicle In-dealer consumer experience 60% of consumers visited their selling dealer more than once Customer experience is clearly not dead Salespeople and printed brochures are considered the most useful in gathering information at a dealership Consumers are most concerned with getting a good deal Interaction with a real person is the most important buying aspect of the vehicle buying process Communication from dealers and manufacturers Both OEMs and dealers could be missing a big opportunity Dealers trump manufacturers in quality of communication How do consumers research a vehicle purchase? Most consumers start researching 3 months before purchase OEM websites and personal relationships have the highest impact The majority of consumers do not use third-party pricing services 1

How do consumers feel about autonomous vehicles? Safety first In 2017 autonomous car safety was a major concern for UK consumers with 7 believing safety would be an issue. Over the last 12 months, consumers' attitudes have changed significantly as the proportion of those concerned about safety has dropped to 49%. This highlights that overall acceptance of autonomous technology has grown rapidly in a short time. Brands can help build trust Over 50% of UK consumers would feel better about riding in a fully self-driving vehicle offered by a brand they trust, with a majority also keen to see government regulation and evidence of an established safety record. Looking at which types of brand consumers would trust most to bring a fully autonomous vehicle to market, more than half would favour traditional car manufacturers, although trust in technology companies has also grown.

Consumers are more positive about fully self-driving vehicles Consumer perception regarding the safety of self-driving vehicles has improved considerably in the last 12 months Consumer opinion on fully self-driving vehicles If price and/or safety were not an issue, I am willing to use a vehicle that could drive itself 49% Fully self-driving cars will not be safe 49% 7 A fully self-driving car will free up my time so I can focus on other activities 4 49% Travelling in a fully self-driving car will be a positive experience 37% 51% 2018 2017 Note: Percentage of respondents who strongly agreed or agreed have been added together Q1: To what extent do you agree or disagree with the following statements? Sample size: n= 1,209 [MOD 2], n= 1,081 [MOD 1] 3

Consumers still want an established track record for AVs Half of consumers would also feel better about AV technology if they were offered by a trusted brand and there were government regulations Factors making consumers feel better about riding in a fully self-driving vehicle An established track record of self-driving cars being used on the streets safely 6 65% 5 Vehicle is offered by a brand you trust 44% 51% Government regulation/approval of self-driving cars 48% 2018 2017 Note: Percentage of respondents who strongly agreed or agreed have been added together Q2: Would the following factors make you more or less likely to ride in a self-driving car? Sample size: n= 1,196 [MOD 2], n= 1,161 [MOD 1] 4

Speaking of trust, most consumers put their faith in OEMs However, the other half of consumers would most trust someone else to bring AV technology to market Type of company consumers trust the most to bring fully self-driving technology to market Traditional car manufacturer 51% 5 A new company that specializes in autonomous vehicles 2 24% Existing technology company 21% 17% Other 5% 2018 2017 Q3: Would the following factors make you more or less likely to ride in a self-driving car? Sample size: n= 1,270 [MOD 2], n= 1,246 [MOD 1] 5

How do consumers feel about electrified vehicles? Powertrain preferences Most UK consumers (7) still favour either a gasoline or diesel engine. Only 19% said they would choose a hybrid engine and only 5% an all battery-powered electric engine in their next vehicle. Looking specifically at the reasons why consumers might not choose an all battery-powered engine in their next vehicle, our research shows that consumers are concerned about driving range and cost/price premiums followed closely by a lack of charging infrastructure. Cost is the main reason that consumers would consider switching to an all battery-powered engine, with 37% of the consumers agreeing that lower ongoing operating costs for BEVs would most compel them to consider going electric for their next vehicle.

Slightly fewer consumers want ICE engines going forward Survey evidence suggests consumers may be starting to shift their thinking towards alternative powertrain technology Consumers expectations with respect to engine type in their next vehicle (2018) Gasoline/Diesel (ICE) 7 Hybrid electric (HEV) 19% 2017 Data All battery-powered electric (BEV) 5% 77% Other 1 7% Gas + Diesel Hybrid Other Alt Note: Other category in 2018 data includes ethanol, CNG, and fuel cell Q38. What type of engine would you prefer in your next vehicle? Sample size: n= 965 [MOD 2], n= 949 [MOD 1] 7

Driving range is still a significant concern for BEVs A quarter of consumers still worried about driving range and cost/price premiums followed closely by a lack of charging infrastructure Biggest concerns regarding all battery-powered electric vehicles Driving range 2 Cost/price premium 24% Lack of electric vehicle charging infrastructure 22% Time required to charge 1 Safety concerns with battery technology The brand I prefer doesn t offer electrified vehicles 4% An all battery electric powertrain is not offered in the type of vehicle I want (e.g., SUV, truck) Other (please specify) 2% Q39. What is your greatest concern regarding all battery-powered electric vehicles? Sample size: n=965 8

But, if consumers can get past the upfront price premium 37% of consumers feel lower ongoing operating costs for BEVs would most compel them to consider going electric for their next vehicle Reasons to consider an all battery-powered electric vehicle Lower vehicle operating costs (e.g., fuel, service) 37% Lower emissions/environmental responsibility 25% Rebates/tax incentives 15% Social status/keeping up with latest technology 5% Other 2% I would not consider it for any reason 1 Q40. What would be the main reason for you to consider an all battery-powered electric vehicle? Sample size: n=965 9

How do consumers research a vehicle purchase? Purchase habits A third of consumers spend less than a month reviewing their vehicle options before making a decision. In fact, 70% spend less than three months, suggesting that brands have a relatively short time to engage with consumers and influence their purchase decisions. Looking more closely at the customer journey and which marketing channels have the most impact on purchase decisions, 31% of consumers agreed that the manufacturer website had a significant impact on choice of vehicle, followed closely by family and friends (30%). Only 15% of consumers viewed third-party websites as having a significant impact on vehicle purchase decision, however of the 15% who did use them, 35% found the service very/extremely useful.

Most consumers start researching 3 months before purchase Vehicle brands have relatively little time to identify, intersect and connect with a consumer to influence a vehicle purchase decision Duration of research before deciding to acquire current vehicle Less than a month 3 1 month to less than 3 months 37% 3 months to less than 6 months 19% 6 months to less than 9 months 9 months to 12 months 2% More than 12 months Q10. How long before you made the decision to acquire did you start researching your current vehicle? Sample size: n=857 11

OEM websites and personal relationships have the highest impact Third-party websites regarded as much less impactful on the actual vehicle purchase decision Impact of information sources on which vehicle is bought Manufacturer websites (e.g., ford.com) 39% 25% 31% 5% Family, friends, co-workers 47% 20% 30% Dealer websites (view inventory, find dealer hours/location) 42% 24% 28% Salespeople at the dealership 45% 2 2 Retail Websites (e.g., ebay Motors, Autotrader, Amazon) 54% 20% 20% Safety-related websites (e.g., consumer reports, government crash test ratings) 57% 1 17% 10% Third-party websites (e.g., Edmunds, Autohome, WhatCar) 58% 18% 15% 9% Other (media reviews, magazines) 6 1 12% 12% Financial provider websites 67% 10% 11% 12% Social media (e.g., Facebook) 70% 9% 10% 11% Little/No impact Some impact Significant impact N/A Q12. When considering purchasing or leasing your current vehicle, how much of an impact did information from each of the following sources have on your ultimate decision of which vehicle you chose? Sample sizes n=857 12

Majority of consumers do not use third-party pricing services Of those who used them, 35% found the service very/extremely useful Percentage of consumers using third-party vehicle pricing support services to purchase a vehicle Percentage of consumers who liked the pricing support received while purchasing a vehicle 1 Extremely useful 12% Very useful 2 Moderately useful 30% Somewhat useful 32% 84% Not useful at all No Yes Q14. Did you use a third-party, vehicle pricing support service (e.g., TrueCar, Edmunds, BitAuto, CarTrade, etc.) in the process of acquiring your current vehicle? Sample size: n=857 Q15. How useful did you find the vehicle pricing support you received? Sample size: n=133 13

In-dealer consumer experience Customer experience Customer experience is not dead, 71% of the consumers who bought their car via a dealer, rate customer experience as either a somewhat or very important factor in choosing where to buy a vehicle. The importance of relationship to dealer purchases is further highlighted by the fact that 60% of consumers visited the dealer where they made their purchase more than once. Interaction with a real person ranked as the most important buying aspect with over half acquiring their current vehicle from the dealership they visited. Two-thirds of consumers still find printed brochures and spec sheets very useful for gathering information at the dealership. 6 rate getting a good deal/price as the most enjoyable part of the dealer experience. The test drive ranks second with forty-three percent.

60% of consumers visited their selling dealer more than once Over half of the consumers did not visit any other dealerships apart from the one where they acquired their current vehicle Dealer where I acquired my current vehicle Other dealers that sell my current vehicle Other dealers that sell other brands of comparable vehicles 0 0 57% 0 5 1 38% 1 14% 1 1 Number of visits 2 3 1 34% 2 3 9% 1 2 3 1 11% 4 4 5% 4 5% 5 or more 5 or more 2% 5 or more 5% Q17. How many dealer visits did you conduct during the buying process for your current vehicle? Sample size: n=702 15

Customer experience is clearly not dead 71% of the consumers rate customer experience as either a somewhat or very important factor in choosing where to buy a vehicle How important is customer experience in choosing which dealer to buy from? Very important 28% Somewhat important 4 Neutral 20% Not very important Not at all important Q18. Thinking about the dealer where you acquired your current vehicle, how important was the customer experience in making the choice to buy there? Sample size: n=702 16

Salespeople and printed brochures considered most useful Two-thirds of consumers still find printed brochures and spec sheets very useful in gathering information at the dealership Presence of channels at a dealership Conversation with a salesperson 5% 11% 82% 2 % Printed brochures and specification sheets 20% 65% 9% Your own mobile device 10% 19% 32% 39% A tablet device provided by the dealership 10% 17% 19% 54% Interactive computer kiosks 11% 20% 14% 55% Augmented/virtual reality headset provided by the dealership 12% 17% 14% 57% Not useful Neutral Very useful N/A Q23. How useful are each of the following channels in helping you gather information while at a dealership? Sample size: n=702 17

Clearly, consumers are most concerned with getting a good deal Also, importance of experiences such as a test drive and quick/efficient process cannot be underestimated The most enjoyable aspects of the dealer experience are Got a good deal/price The test drive Quick/efficient process Friendliness/relationship with sales associate All my questions were answered Convenient location Did not have to negotiate I learned about extra features Follow-up post-purchase Dealership amenities (e.g., kid s play room, restaurants/coffee shop, cocktail bar) Technology that made the experience more efficient/easier Technology that made the experience more fun (e.g., virtual reality) Other 8% 11% 9% 17% 9% 14% 11% 8% 1% 7% 2% 2% 2% 2% 1% 32% 4 38% 35% 34% 30% 6 Top 3 choices Top choices Q24. What are the three aspects of the dealer experience you enjoyed most when you acquired your current vehicle? Sample size: n=702 18

Interaction with a real person most important buying aspect Less paperwork and getting pricing information online are the other most important aspects for consumers Consumer opinions on important aspects of a vehicle buying process Interacting with a real person to ask questions 5% 20% 75% Minimal paperwork Getting pricing information and/or locking-in a vehicle price online prior to purchase Building rapport with the dealer 10% 11% 27% 67% 29% 61% 31% 58% Extended duration test drives (e.g., 24 hours or more) Ride-and-drive events where you can test drive several vehicles at one time Innovative technology to make the purchase process more efficient Getting pre-approved for financing before shopping Innovative technology to make the purchase more engaging/fun (e.g., virtual reality) Access to product specialists (e.g., Apple genius concept) 20% 21% 15% 28% 37% 3 31% 32% 49% 47% 39% 4 31% 41% 35% 28% 39% 28% Minimal contact with the dealer 30% 44% 2 Not at all important/not very important Neutral Somewhat important/very important Q45. How important are each of the following items related to the vehicle buying process? Sample size: n=766 19

Communication from dealers and manufacturers Interaction matters Interacting with a real person, having a friendly relationship with the dealer, minimal paperwork, and getting vehicle price information online are the most important aspects of the vehicle buying process. However, this relationship appears to end at the point of purchase. Both manufacturers and dealers could be missing an important opportunity as 62% of consumers say they were never contacted by the manufacturer after acquiring their vehicle. Dealers surpass manufacturers in terms of quality of communication with 7 of consumers saying dealer communication is good/ very good.

Both OEMs and dealers could be missing a big opportunity 62% of the consumers say they were never contacted by the manufacturer after acquiring their vehicle Manufacturer touchpoints Dealer touchpoints Number of times 62% Never 2 17% Once or twice 39% 11% 3-5 times 21% 4% 6-10 times 9% 2% 11-20 times 1% More than 20 times 1% Don t know 4% Q31. How many times has either the manufacturer or dealer contacted you (for any reason) after acquiring your current vehicle? Sample size: n=702 21

Dealers trump manufacturers in quality of communication 7 of consumers rated dealer communications as good/very good Manufacturer quality of communication Dealer quality of communication 67% 21% Very good 25% 7 4 Good 48% 2 Fair 22% Poor 1% Very poor 2% Q33. How would you rate the quality of the communication you have received from both the manufacturer and dealer since acquiring your current vehicle? Sample size, average for manufacturer and dealer : n=257, 525 22

The 2018 Deloitte Global Automotive Consumer Study includes 22,177 consumer responses across 15 global markets Belgium (n=1,275) United Kingdom (n=1,261) Canada (n=1,261) Germany (n=1,759) United States (n=1,760) Mexico (n=1,269) France (n=1,258) Japan (n=1,762) Rep of Korea (n=1,763) China (n=1,759) Brazil (n=1,256) Italy (n=1,260) South Africa (n=1,251) India (n=1,760) Malaysia (n=505) Thailand (n=515) Indonesia (n=503) Southeast Asia (n=1,523) Study methodology The study is fielded using an online panel methodology where consumers of driving age are invited to complete the questionnaire (translated into local languages) via email. It was fielded in 17 countries and designed to be nationally representative of the overall population in each country. 23

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