Deloitte State of the Consumer Tracker

Automotive - Establishing the road to consumer recovery in the era of COVID-19

In the span of a few months, what started as a global health crisis has also morphed into an economic crisis. The world has not seen these two forces so intertwined since the 1918 flu epidemic. As economies the world over seek to reopen, we aim to understand the interplay between personal health and financial well-being on consumer behaviour.

To begin to answer these questions, Deloitte is conducting longitudinal bi-weekly surveys of consumers across 15+ countries worldwide. This article is updated as of Wave 7 (1,000 Belgian consumers surveyed 08-10 July 2020). To explore the latest insights from Belgian consumers towards their automotive and mobility needs, and benchmark against the mindset of consumers around the globe, please visit this interactive dashboard.

Deloitte State of the Consumer Tracker

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66% of Belgians value the idea of owning a vehicle

As global economies begin to reopen and the flow of people and goods resumes, lingering health concerns are making the idea of personal vehicle ownership (more) attractive to Belgians. In line with the global average (72%), almost 7 in 10 Belgian consumers indicate that personal vehicle ownership is valuable to them – likely driven by increased consumer attention towards hygiene of shared transport modes. This may result in a structural shift to more affordable options, including new vehicles with fewer advanced features, or the used vehicle market.

Almost 1 in 2 Belgians plan to keep their car longer than they were originally expecting

The prolonged economic shutdown is starting to weigh on consumer finances, causing many people to reconsider large purchases going forward. As a result, 49% of Belgian vehicle owners are planning to keep their current car longer than expected, representing a significant challenge for automotive manufacturers looking to reboot demand. Automotive manufacturers and dealers will need to capture more value from servicing rather than selling vehicles, with significant top and bottom-line pressures for the entire Automotive industry.

16% of Belgians are putting off regular maintenance for their vehicle

The crisis is also putting downward pressure on consumers’ near-term spending, with 16% of Belgians currently indicating they want to postpone regular car maintenance. This could bring some continued pressure to automotive repair networks seeking to rekindle volumes after the lockdown. Having said that, there are positive signals coming from consumers in France, Italy and Spain who are increasingly acknowledging the need to maintain their current vehicle (especially if they intend to keep it longer than expected).

Only 9% of Belgians would buy a car online if they could

As the pandemic forced retailers to close, some dealers – notably in international markets – responded by introducing solutions to offer a completely virtual sales experience. However,  less than 1 in 10 Belgians currently indicate they would buy a car online if they could, while in Germany and France that share is twice as high. Nonetheless, continued digitalisation, together with innovation in contactless sales and servicing, could enable some automotive players to grow business in challenging market conditions.

Key conclusions for the Automotive Sector in Belgium

  • The automotive sector has been significantly hit by the COVID-19 healthcare crisis, which is now driving an economic crisis. According to IHS, passenger vehicle sales are expected to be down by 23% in 2020 worldwide due to the spread of the COVID-19 virus, lockdown measures, and a resulting slowdown in the economy. 
  • The revenues already lost in Q1 and Q2 will not be recovered by Automotive companies, and the combination of consumers deferring new-car purchases and maintenance will lead to decreased sales and servicing for the months ahead too.
  • Automotive OEMs and Dealers should focus on a mix of commercial excellence, cost reduction, and digitalisation initiatives in order to reboot their businesses, and shift from the short-term COVID-19 operational response towards taking bold actions to recover and thrive.
  • Consumers continue to see the car as an attractive transport choice, especially due to safety and hygiene concerns over shared transport modes. While this brings a glimmer of hope for the Automotive industry, intervention will be required from leaders across the mobility ecosystem to ensure that Belgian modal shift and sustainability ambitions are achieved, and there is not a return to heavy congestion on our roads.
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