The global health crisis is expected to have long-reaching economic effects, posing serious challenges to the automotive industry due to the ensuing recession and growing consumer financial insecurity. In a recent survey conducted by Deloitte and shared in a study titled “How the pandemic is changing the future of automotive,” consumers indicated they will be delaying large purchases, specifically holding onto their current vehicles longer, and re-thinking what vehicle segment or option package is affordable.
The study revealed that 47% of US consumers plan to keep their current vehicles longer and another 37% intend to delay larger purchases altogether. Even in the near term areas like vehicle maintenance, 25% of American consumers are opting to put it off and that is dramatically higher in India at 80%. Interestingly, however, the pandemic isn’t translating into more online vehicle sales, except for in India and China, 71% and 45%, respectively. Everywhere else in the world, the interest in a fully-online automotive purchase is only 1 in 4.
“As the focus of public concern continues to shift from health to financial well-being, understanding how consumer expectations are changing will be critically important for auto companies to remain engaged,” said Deloitte LLP vice chairman and US automotive sector leader Karen Bowman.
While Joe Vitale, principal and global automotive sector leader at Deloitte Consulting LLP, frames these challenges out strategically for each automaker, “Clearly, industry stake holders that can use this situation to significantly restructure their operations will likely be in the best position possible to thrive going forward.”
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