Customer Engagement

Driving into the Next Decade

IBV-Automotive -in-blog2Conventional automotive industry wisdom warns us that people are losing interest in cars.

We disagree.

Over the next 10 years, the car will remain a key fixture in personal transportation.

However, people will engage with cars – and cars with people – in new ways, according to our new IBM Institute for Business Value study, “A New Relationship – People and Cars.” One recurring and notable difference of opinion: consumers in growth markets were consistently more eager to try vehicle and mobility innovations – they base their decisions on perceived value, rather than mature market consumers who seem content to wait for proven value. The reaction of consumers in growth markets to new technology can be summed up as a “When can I have it?” mentality. Those in mature markets were more hesitant, with responses that reflect the question, “Why do I need it?”

IBV A New Relationship - Ben Stanley in-blog1The study found that consumers show a high level of interest especially in self-enabling vehicles, or cars that can integrate, configure, learn, heal, drive and socialize.

These capabilities include autonomous, self-driving cars and vehicles that can be fixed without human intervention. There is also interest in the implementation of cognitive computing to learn and assimilate to the driver’s behaviors, to the vehicle itself and to the surrounding environment.

Consumers around the world are ready for industry innovation to deepen their connections with cars and the expanding Internet of Things (IoT). New mobility options will soon transform consumers’ lives and expectations.

We analyzed what 16,000 consumers in 16 countries said about the industry – in particular, how they personally expect to use cars in the next 10 years. The meaning of “driving” itself is expanding far beyond “steering a vehicle” as the consumer relationship with the car is changing.

The cognitive car of the future will know who the occupants are, make decisions for them and even become a trusted companion. Consumers are eager to welcome the car as another smart device embedded in the IoT, even though it weighs 3,000 pounds.

The study found three ways consumer expectations are changing their requirements of the auto industry and its counterparts.

  1. Consumers want different ways to own cars: People want the convenience of cars, but not necessarily with the traditional ownership model.
    Eighty-six percent of people we surveyed said they will own a car sometime during the next ten years – this includes some of the 14 percent of people who said they couldn’t afford to buy a car today. Traditional ownership models will not meet the future expectations of consumers, as 42 percent are very interested in subscription pricing, while another 24 percent of respondents are very interested in fractional ownership of vehicles.
  1. Consumers want new ways to get around: The personal car as the primary mode of transportation will continue to be a key fixture in personal transportation, but its priority of usage will change.
    Survey respondents ages 18-24 start at a low level of car usage: only 50 percent use a car today as their primary mode of transportation, versus about 75 percent in other age groups. But in the coming decade, those younger drivers expect a 34 percent increase in the car as a primary mode of transportation, compared to a decline of 17 percent for all other age groups.
  1. Consumers want bells and whistles that match their personal interests: Digital technology in cars today can be complicated and hard to use. Understanding consumers based on their mastery of digital mobility technologies gives greater insight into groups of consumers with similar interests, attitudes and expectations.

Consumers who have a higher understanding of technology are more likely to use the connected features than those who don’t. Having a higher level of digital maturity will drive greater expectations for new digital innovations. Ultimately, intelligent, intuitive self-enabling cars will learn and automate the use of these technologies but, until then, the degree of the consumers’ digital maturity will greatly impact their adoption success.

Automakers who appreciate what consumers want can do a better job of matching consumers to desired digital technologies.

Our study can provide a great deal of insight into the expectations consumers have of the automotive industry and the greater mobility ecosystem. This study coupled with our “Automotive 2025: Industry without borders” study provides a 360-degree view of what is important – both to industry executives and consumers – over the next 10 years.

Drivers and passengers will benefit by getting greater satisfaction from driving and using vehicles. They will also love the personalized experience and convenience offered by new advancements in the auto industry.

The question is, can the industry deliver fast enough?!

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