Prior to COVID-19, consumer attitudes and behaviors toward buying cars, using mass transit and maintaining vehicles hasn’t ever changed. Consumers purchased their vehicles when they needed them without having concerns about the cleanliness of the dealership or their vehicles just as they utilized alternate transportation without worrying about shared germs. Cleanliness was reserved primarily for the household, and consumers only thought about physical safety in the context of automotive. In the wake of this pandemic, consumer attitudes and behaviors toward the automotive industry have drastically changed and health safety is a priority now more than ever.
Car purchases will be made only out of necessity
According to Mintel research on consumers and economic outlook in 2020, nearly three in 10 consumers said they would struggle after six months without a steady income. With any job loss, consumers will likely cut spending that they deem non-essential. Pre-pandemic, nearly one in five consumers said they planned to purchase their next vehicle within the next six months, according to Mintel research on creating loyalty in automotive. As consumers grow wearier about their financial outlook, automakers can expect this number to drop significantly as most consumers will hold on to their vehicles longer and will only make purchases out of need. During COVID-19, car buyers can be expected to fall into two camps: ‘want’ car buyers and ‘need’ car buyers.
‘Want’ car buyers are consumers who intend to purchase a vehicle in the immediate future but due to a variety of factors such as a job loss or otherwise, they feel that making a large purchase isn’t financially possible and will hold onto their current vehicle. ‘Need’ car buyers are consumers who have no option but to purchase a vehicle within the next 3-6 months. This might be because their current vehicle is no longer running, their lease has expired or their current vehicle is no longer reliable.
The car purchasing process is already a stressful time for consumers. Half of consumers say they dislike visiting dealerships and that they find salespeople to be untrustworthy, according to Mintel research on the car purchasing process. Automakers and car dealerships can expect these consumer sentiments to be amplified during the pandemic. Efforts should be made to alleviate additional stress in the form of providing comprehensive vehicle pricing breakdowns and financial assistance plans for all vehicles, not just new. Additionally, automakers and car dealers should communicate what they’re doing to sanitize showrooms and vehicles to alleviate any consumer concerns about the cleanliness of the dealership and its vehicles.
Vehicle maintenance takes a backseat
Because consumers are being actively encouraged to social distance and only leave their house for necessities, auto maintenance providers and repair shops can expect an immediate slowdown in business. In general, consumers replace their tires every 3-5 years and they have at least one routine brake job or vehicle servicing done a year. However, consumers will likely hold off on their next tire purchase, oil change or repair job, due to not driving as often, not wanting to put wear and tear on their tires or vehicle or because they deem these purchases as an unnecessary spend considering the widespread financial uncertainty.
Most of the financial payment plans currently being promoted in the auto industry are focused on the new vehicle market, but it’s equally important for the service and maintenance side of the industry to cater to customers that might be financially burdened at this time. Offering payment plans not only helps to reaffirm consumer loyalty, but it also protects consumers from going too long without necessary maintenance which can lead to a larger expense down the road.
COVID-19 will change how consumers view “safe” transit
Consumer perception regarding safe transit has persisted for as long as anyone can remember. In light of COVID-19, the alternate transportation industry is already seeing a radical shift as to how consumers define “safe” transit.
Currently, consumers primarily think about their safety while traveling in a physical context. According to Mintel research on alternate transportation, one in 10 consumers said they chose the method of transportation that was cleanest when choosing to go somewhere. However, moving forward consumers will add “health safety” to their definition. According to Mintel’s COVID-19 consumer data from March 27- April 2, 2020, two in five consumers said they are avoiding public transportation because of the pandemic. It can be expected that post-pandemic, all transportation providers will need to communicate to consumers what they’re doing to ensure consumer health safety while traveling.
What we think
It’s uncertain when COVID-19 will be contained as well as how long the economic effects will be felt. What we know currently is that the effects are being felt by millions of Americans who have lost their jobs. Automakers, alternate transportation providers and auto maintenance providers can expect the changes seen in consumer expectations and behaviors to persist long after this pandemic. While car purchasing timelines will eventually return to normal – as will usage rates of mass transit – consumers will continue to view these behaviors under a new lens. The automotive industry is not typically known for being flexible; however flexibility will be key in order to meet consumer expectations today and moving forward.
