Automakers must increasingly cater to the tastes and preferences of consumers in emerging markets, as economic power shifts, for instance to China. This is one of three larger implications of recent studies by GfK of structural changes and changing consumer behavior in the automotive industry.
Others include the changes automakers need to undergo to adapt to higher safety standards and environmental regulations, as well as consumer behaviors, including the need to be connected 24/7.
Trend 1: Power to emerging markets
The focus of economic power is shifting to Asia and the BRICs in terms of investment and output. This will not only create a wave of new middle-class consumers but also drive profound innovations in product design, market infrastructure and value chains.
Consumers in emerging markets are striving for greater wealth and owning a car is seen as an important way of expressing this. New brands are therefore emerging, particularly in India and China, and it is highly probable that a luxury/prestige brand may evolve in one of these markets in the coming years.
In general, there is pressure on manufacturers to create local brands to compete better. This means they face challenges to blend the “local flavor” of a market with a global corporate identity. OEMs will need to avoid diluting any positive perceptions created by their corporate brand.
Trend 2: Higher safety standards and environmental regulations
In emerging markets and all around the world, people have come to recognize the impact of human actions on the planet and acknowledge our limited resources, such as fossil fuels and water. One could almost say that environmental awareness is now ingrained in culture worldwide. Of course, awareness and behavior are two different things, but the data show that consumers increasingly want to do their part to preserve the environment.
By purchasing "green" products or supporting a company that shows its commitment to environmental concerns, consumers can take action while simultaneously showing others that they have a personal commitment.
This desire to go green is one reason the automotive industry is investing to develop electric cars. Yet that investment is at risk, since consumers have been slow to adopt e-vehicles, mainly due to high prices and concerns about their range and the ability to find a charging station. (See our study on electric vehicles for details on perceptions of electric vehicles.)
For automakers, this means makers of electric vehicles should focus their marketing on messages that support the personal benefit of driving an electric vehicle, as opposed to the societal benefit. See figure 1.
Trend 3: Connectivity and cars
The 2013 Roper Reports® Worldwide survey showed that consumers feel an obligation to be connected and available, they want to access content across all devices and, at the same time, people want technology that serves a purpose, such as helping them work or unwind.
Combine these three ideas, apply them to the automotive sector, and what do you get? Consumers who want content on the go in their cars. Indeed, people increasingly expect access to their digital lives from wherever they are. See figure 2.
(Developed Asia: South Korea, Japan, Taiwan and Australia; Developing Asia: China, India, Indonesia, and Thailand)
For car makers, this need to be connected comes with implications.
Consumers will buy more often and pay more if a manufacturer is seen or actually is "cutting edge" regarding connectivity.
A vehicle should become an enabler, since consumers want useful, simple tools to boost their productivity and help them use their time wisely. For instance, 14% of drivers in the US in 2013 reported "sometimes" or "often" using a laptop while driving, according to a report by GfK and the Consumer Electronics Association. See figure 3.
Driver distraction is clearly a problem. New in-car interactions will need to be designed to reduce chances for drivers' eyes and minds to get off the road, while conforming with all appropriate legislation. Speech interfaces will play a big role, as will touch interfaces. The ideal car has both.
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Frank Haertl is Global Lead Automotive, GfK, based in Germany. To gain the full insights and benefits from our trends in the automotive industry, contact us.