While the global automotive industry is expanding the sales of pure electric vehicle models, consumers in major automotive markets prefer hybrid models. In South Korea, consumers have shown a preference for hybrid models over electric vehicles by approximately 2.3 times when purchasing new cars.
Deloitte Korea Group published the ‘2023 Global Automotive Consumer Survey’ report analyzing key issues affecting the automotive industry due to advancements in technology with over 26,000 consumers in 24 countries, including South Korea, from September to October 2022.
According to the global survey by Deloitte, the speed of transition to electric vehicles varies by country. The preference for hybrid technology is shown to be more than 2.6 times higher on average compared to battery electric vehicles in most countries.
In terms of preference for hybrid models, Japan ranked the highest at 48%, followed by South Korea at 40%, India at 32%, Southeast Asia at 32%, the U.S. at 28%, Germany at 27%, and China at 26%. Battery electric vehicles had preferences of 27% in China, 17% in South Korea, 16% in Germany, 13% in Japan and Southeast Asia, and 8% in the U.S. and India.
A lack of charging infrastructure has been identified as a hindrance to purchasing electric vehicles. Over 70% of consumers in the U.S., Germany, and Japan selected their homes as the charging location for electric vehicles. In South Korea, more than half, at 57%, also chose their homes. However, in some markets, the installation of home chargers is either impossible or difficult, making the expansion of public charging infrastructure a prerequisite for the popularization of electric vehicles.
The main concerns when purchasing electric vehicles include charging time, driving range, and costs. Over 66% of respondents preferred charging their electric vehicles up to 80% within 40 minutes. When broken down, the most preferred time was found to be ‘between 10 and 40 minutes.’ The preference rates by country were 62% in South Korea, 60% in Southeast Asia, 57% in the U.S., 56% in India, and 49% in Japan.
Moreover, many consumers preferred a driving range of ‘over 400 km’ on a single charge. By country, 79% in Germany, 73% in South Korea, 69% in China, 53% in Japan, 49% in Southeast Asia, and 41% in India expressed a desire to drive more than 400 km on a single charge.
The delays in new vehicle deliveries due to a shortage of auto parts are expected to continue for a while. Deloitte Global predicts that delays in new vehicle deliveries will accelerate the trend of opting for ‘made-to-order’ when purchasing vehicles. If made-to-order is possible, the highest proportion of respondents from most countries indicated they could wait 3 to 4 weeks.
By country, the response rates were 39% in India, 35% in China, 34% in Southeast Asia, 32% in Germany, 31% in both Japan and the U.S., and 30% in South Korea. This indicates that a focus on customer experience is emerging as a new trend, which could present new opportunities for the automotive industry.
Furthermore, when considering factors for purchasing new cars, reasonable pricing (1st place) and transparent pricing (2nd place) were followed by actual usage experience in 3rd place. Therefore, the differentiation of customer experience will determine the success or failure of the automotive industry.
Features that consumers expect from brand applications include ‘learning vehicle functions’ in South Korea, Japan, the U.S., and Southeast Asia, while services such as booking appointments (China), checking service schedules and costs (Germany), and processing payments (India) prioritized user experience.
Additionally, there is a high interest in connectivity functions offered by vehicles, such as ‘traffic congestion updates and alternative routes,’ with interest levels at 81% in Southeast Asia, 75% in South Korea, 66% in Japan, and 58% in Germany. Consumers prefer these connected services to be included in the vehicle price and paid for either upfront or based on service usage.
By country, many consumers in China (54%) and India (49%) preferred upfront payments, while 54% of consumers in South Korea preferred payments based on service use. Subscription service monthly payments were generally less preferred across most countries.
Kim Tae-hwan, the leader of Deloitte Korea Group’s automotive industry, stated, “To expand the base of electric vehicles, securing consumer trust in the safety of electric vehicles and establishing sufficient charging infrastructure is urgent. The automotive industry must continuously develop and provide services that meet customer needs, along with understanding the end customer to secure unique customer experiences as a key decision criterion when purchasing new cars.”
Meanwhile, the full report of the ‘2023 Global Automotive Consumer Survey’ can be found on the Deloitte website (Link).
Lee Sang-jin daedusj@autodiary.kr