Mumbai: A survey over 3,100 consumers in eight countries - Brazil, China, France, Germany, India, Russia, the UK and the US - shows that green vehicle ownership continues its upward trend; 41 per cent own a fuel-efficient or alternative-fuel vehicle, up from 36 per cent last year, and 30 per cent plan to buy one.

Fuel economy and environmental impact are the primary reasons for customer preference shifting in favour of alternative fuel vehicles.

The findings are contained in Capgemini's Cars Online 09/10, released today. The study is the 11th annual study of the global automotive industry, which identifies a number of key trends that underscore the importance of understanding consumer buying behaviour in today's turbulent climate.

The top four factors that influence buying decisions remain reliability, safety, fuel economy and price, consistent with previous years.

An increasing focus on environmental issues permeates the study, with 31 per cent of consumers in Western Europe pointing to this as the key reason to own or buy a fuel-efficient or alternative-fuel car, up from just 22 per cent the year before.

In the BRIC countries, this was also borne out:

• In India, 32 per cent indicated environmental impact as a driver
• 90 per cent of Brazilian respondents claimed a strong understanding of green vehicles
• 32 per cent of respondents in China said this was a primary reason for green vehicle decisions Feedback from consumers included the hope that there will soon be 100 per cent clean fuel, no emissions and that the automotive industry would 'get off the oil wagon'.
• However, findings also show that consumers would be reluctant and, in some cases, unwilling to pay a premium of more than 10 per cent extra for fuel efficient or alternative fuel vehicles.

The report highlights changes in consumer buying behaviour at a time when the industry has been severely impacted by the economic climate and outlines new trends in online buying of vehicles, parts and accessories, alternative-fuel vehicles and aftersales and servicing.
Increasing focus on environmental issues in purchasing decisions

The top four factors that influence buying decisions remain reliability, safety, fuel economy and price, consistent with previous years.

An increasing focus on environmental issues permeates the study, with 31 per cent of consumers in Western Europe pointing to this as the key reason to own or buy a fuel-efficient or alternative-fuel car, up from just 22 per cent the year before.

In the BRIC countries, this was also borne out:

• In India, 32 per cent indicated environmental impact as a driver
• 90 per cent of Brazilian respondents claimed a strong understanding of green vehicles
• 32 per cent of respondents in China said this was a primary reason for green vehicle decisions.
• Feedback from consumers included the hope that there will soon be 100 per cent clean fuel, no emissions and that the automotive industry would 'get off the oil wagon'.
• However, findings also show that consumers would be reluctant and, in some cases, unwilling to pay a premium of more than 10 per cent extra for fuel efficient or alternative fuel vehicles.

Convergence between developing and mature markets

A rationalisation has begun to take place with some of the trends in developing markets starting to move toward those found within mature markets. However, significant differences remain:

• The shift toward convergence is most pronounced in Russia, where consumers are more likely to rely on web-based information, similar to the US and Western Europe.
• However, overall 30 per cent of consumers in the BRIC regions use TV advertising as a source of information, compared to only 16 percent in mature markets.
• Respondents in developing markets who do use the internet are more likely than counterparts in mature markets to use new tools such as blogs, video sites and RSS feeds to research vehicle information.
• Short-term factors such as cash-back incentives and low financing options are still more important in developing countries as drivers for purchase.
• Over one-third of respondents in developing countries will consider four or more makes / models compared to only 17 per cent in mature markets; Brazilian consumers displayed this trait in particular (over half of respondents).

Early signs of convergence between the BRIC (Brazil, Russia, India and China) and the mature countries also indicate that the gap in factors impacting vehicle buying decisions is narrowing.
These developments indicate that the successful automotive companies will be those that focus on longer-term prosperity with an emphasis on future differentiation and competitive advantage.
''During what has been a difficult year, the automotive industry has, understandably, opted for short-term measures such as cost-cutting and cash preservation," says Nick Gill, Capgemini automotive sector leader.

Leader says, "Our Cars Online study shows that they should now be considering how to address the shifting - and compressing - buying cycle by diversifying where and how they engage consumers.

''They would also do well to consider the opportunities for growth indicated by the research. Aftersales and servicing in particular were highlighted as missed opportunities, given that less than half of in-market customers return to the dealer where they purchased their car to have it serviced.'' 

  Some highlights of the survey:     

• Almost 90 per cent of consumers today use the internet to research vehicles. Nearly 40 per cent would like to buy a car over the internet, and half would purchase parts and accessories online, the main drivers being price discounts and dissatisfaction with the dealer / retailer process.     
• Customer loyalty remains vital with 68 per cent of respondents likely to purchase the same make / brand again as their current vehicle, up from 61 per cent last year.
• In addition, 63 per cent would purchase from the same dealer where they bought their current car.
• The vast amount of information available on the internet is resulting in a shrinking buying cycle.
• Over two-thirds of respondents begin the research process two to four months in advance.
• Over half of respondents expect a response to an enquiry made online within four hours
• Nearly three-quarters said they would look for another company if the response was too slow.

Less than half of consumers with cars still in-warranty have their vehicles serviced at the purchasing dealership, emphasizing the importance of delivering a strong after sales and servicing experience. Spare parts and service typically offer a profit margin up to 10 times greater than that of the initial sale.

The impact of the Web in the role of automotive companies
By the time a consumer visits the showroom, they will already have done a degree of research online and consequently it may be too late to influence the vehicle purchase decision.
Search engines have jumped up to the third spot in the research stage, from seventh place last year, with respondents continuing to state they want a full range of product information and base pricing from manufacturer and dealer sites above everything else.

In mature markets, cost calculators and comparators were important, while developing countries looked for guidance and advice over the web and to communicate with their dealer or car company online for problem solving and buying accessories.

Blogs and forums play a pivotal role – 57 per cent of respondents would be less likely to buy a particular make or buy from a particular dealer if they found negative comments on such sites.
Although consumers are less willing to buy a used car sight unseen, nearly 40 per cent would purchase a new car through a completely online transaction if this capability existed, suggesting the role of the dealership is likely to change significantly in the next few years as this facility becomes available.

For consumers in mature markets, inability to test drive a vehicle was a hurdle to online purchase whereas in developing markets, the lack of vehicle history was a greater concern. Many consumers dislike price negotiation with dealers, which is a key factor accounting for this shift online, although other respondents indicated that an inability to negotiate price would be a barrier to buying on the web.

Maintaining customer satisfaction across all markets offers the greatest potential for growth, and providing a viable online option as part of this is imperative to future success for the automotive industry.

Capgemini worked with SmartRevenue, a Ridgefield, Connecticut-based research firm, to conduct the survey for Cars Online 09/10.

All analysis and interpretation of the data has been made by Capgemini in collaboration with the Car Internet Research Program (CIRP) of the University of Ottawa, Canada. In total more than 3,100 consumers were surveyed in eight countries: Brazil, China, France, Germany, India, Russia, the United Kingdom and the United States.

The composition of the consumer sample in each country was based on projectable national samples representative of the population from the standpoint of region, age and gender. All consumers surveyed were in-market (24 per cent plan to buy or lease a vehicle within three months; 29 per cent in three to six months; 11 per cent in six to 12 months; and 36 per cent in 12 to 18 months).