Detroit, Michigan – “Generation Y” buyers – those between the ages of 19 and 31 – could move the market away from traditional vehicles thanks to their strong affinity for hybrids, according to a new survey by Deloitte.
Of those surveyed, 59 per cent of Gen Y respondents prefer an electrified vehicle over any other type of car or truck, with 57 per cent preferring gasoline-electric hybrids, 2 per cent wanting pure electric battery vehicles, and 37 per cent preferring traditional gasoline-only powertrains. The survey asked consumers in the U.S., China and Western Europe.
At nearly 80 million strong in the U.S., Gen Y consumers are one of the largest domestic automobile buying market segments and the largest consumer segment since the baby boomers. Deloitte projects that one out of four new automobiles sold this year in the U.S. will be purchased by a Gen Y buyer. Gen Y will also buy 40 per cent of all vehicles in the U.S. over the next 10 years.
The study found that hybrids are popular with these consumers for several reasons. Top of the list is fuel efficiency, with 89 per cent considering buying a vehicle that gets better mileage, especially when gasoline prices rise above US$2.75 per gallon, the median price that Gen Y consumers consider to be “fair.” Further, 49 per cent of Gen Y consumers are willing to pay an additional $300 for each m.p.g. of improvement they can get out of a hybrid, which is only $50 less than the $350 m.p.g. premium estimated that a hybrid vehicle currently costs compared with a conventional gasoline vehicle.
“Gen Y consumers also view hybrid technology as proven and reliable,” said Craig Giffi, Deloitte’s vice-chairman and automotive practice leader. “Almost 6 in 10 Gen Y respondents prefer a hybrid over any other type of vehicle, while a mere 2 in 100 prefer a pure battery electric vehicle, demonstrating that Gen Y is familiar and comfortable with hybrid technology, but not so much with battery-only technology.”
The survey shows that Gen Y respondents prefer the convenience of traditional automobiles, strongly preferring powertrains that do not require plugging in for recharging. Even with their overall preference for hybrids, Gen Y consumers still prefer a non-plug-in hybrid by a margin of more than two to one over a plug-in version.
In the vehicle’s interior, in-dash technology is most important, with 59 per cent of respondents preferring it, and with 73 per cent seeking touchscreen interfaces and 72 per cent looking for smartphone applications. They also want to be able to customize their interiors after the initial purchase; 77 per cent would like to buy additional technology accessories and upgrades for their vehicles on an ongoing basis.
On average, Gen Y consumers are willing to spend more than $3,000 for hardware that delivers connectivity. They are also willing to pay approximately $2,000 for safety features that can better help them manage the distractions created by connectivity, such as collision avoidance systems, blind spot detection and sleep alert systems, and ranked safety bundles as their second most important priority behind technology bundles.