In their latest survey, “How consumers’ behavior in car buying and mobility is changing amid COVID-19” McKinsey reports several key trends that have emerged as a result of the COVID-19 pandemic. Consumers were surveyed around the globe in the U.S., UK, Germany, France, Italy, Japan, and China on a biweekly basis. Here’s a look at some of the highlights of their latest report.
Purchase intent continues to recover
The start of the pandemic was indeed sobering for the automotive industry as car dealerships around the globe shut their doors and car sales declined by 71 percent in China in February 2020, 47 percent in the U.S. April 2020, and 80 percent in Europe in April 2020, according to McKinsey.
Not only has purchase intent recovered to just 14 percent below pre-pandemic numbers, but the future bodes well too with purchase intent up for the next 12 months across all regions, particularly for higher-income households.
McKinsey reports, “New and used car purchase intent for next 12 months recovered to – 10% (up 5 percentage points vs. July) and -7% (up 3 PP vs. July) vs. pre- COVID-19 level; both values represent highest results since COVID disruption.”
People prefer personal vehicles for intercity traveling
As people avoided air and plane travel due to health and safety concerns, consumers are favoring personal vehicle use for longer distance traveling. This shift in preference can be seen across all regions.
Consumers prefer a digital purchase experience
It’s no surprise that as consumers acclimated to digital experiences during COVID-19 across all arenas — school, work, grocery shopping, and ordering takeout, for example — their interest in digitally purchasing cars increased as well. In fact, reports McKinsey, “less than a third of younger consumers prefer conducting car sales & aftersales in person at a dealership.” Not only that, people have an even stronger interest in contactless services. In fact, about half of those surveyed said they were even willing to pay extra for this.
Private vehicle access is more appreciated
With up to one-third of people in some cities avoiding public transportation because of COVID-19, the automotive industry saw a rise in public vehicle use in particular by a younger segment of the population. As a result, this group, which comprises millennials, has expressed a new appreciation for private vehicles: McKinsey reports “a third of consumers value constant access to a private vehicle more than before COVID-19, esp. amongst younger consumers.”
As the pandemic has reshaped the lives of people all around the globe, the automotive industry has been significantly impacted, but by taking note of COVID-19 car industry trends and staying adaptive, OEMs and car dealers may be able to turn what has been a challenging period into an opportunity to grow their market share once the pandemic has ended.