More than 25 million Gen Y consumers in Europe plan to forego vehicle ownership in the next five years

NEW YORK, 1 October 2014—In its latest report exploring the mobility choices and automotive expectations for consumers around the world, Deloitte Touche Tohmatsu Limited (Deloitte Global) reveals that approximately 25 percent of Generation Y (“Gen Y”) consumers across Europe do not plan to buy or lease a vehicle before 2019. Instead, these young consumers—born between 1977 and 1994—are opting for modes of transportation such as public transit, taxis, rental agencies, and walking, all of which they believe offer more convenience at a lower total cost than owning a personal car.

The new study by the Deloitte Global Automotive group, 2014 Global Automotive Consumer Study: Exploring European consumer mobility choices (the Study), draws automakers’ attention to the changing mobility needs and buying behavior of a consumer group estimated to reach 106 million in Europe by 2020.¹ The study analyzed responses from more than 23,000 consumers across 19 countries, with the latest analysis examining the preferences of Millennials living in eight European markets, including Belgium, the Czech Republic, France, Italy, Germany, the Netherlands, Turkey, and the United Kingdom.

“The results of this latest study show that the love affair Europeans have long had with their cars may be fading with this young, tech-savvy generation that can connect with friends and family wherever and whenever they want,” says Joe Vitale, Deloitte Global Automotive Sector Leader. “Saddled with increasing levels of debt and entering the job market on the heels of one of the largest economic downturns, it’s not surprising that Gen Y consumers are turning to Europe’s well-established public transportation, taxi systems, as well as to emerging transportation models such as Uber, to meet their mobility needs.”

Among European Gen Y consumers who do not currently own or lease a vehicle, cost is undeniably the main barrier to vehicle ownership. Most cite high operational and maintenance cost (72 percent) and affordability (71 percent). When it comes to convenience, 67 percent say their lifestyle needs are met by walking or public transportation.

For automakers, the insights revealed in Deloitte’s 2014 study present some complex challenges that may ultimately change not only their products, but also how they engage consumers in a world of increasing competition between mobility choices and increasing competition between brands.

The good news is that Gen Y consumers in Europe do love to drive.  Deloitte’s study reveals that an overwhelming 81 percent of Gen Y in Europe show an interest in vehicles on the road today. Moreover, a full 57 percent still put cars first as their preferred mode of transportation, independent of cost, environmental impact, and convenience.  “In addition to differentiating their brand with this generation, automakers today also need to capture Gen Y consumers’ interest in owning a vehicle,” comments Guillaume Crunelle, Automotive Sector Leader with Deloitte France.

Additionally, nearly 70 percent of European Gen Y consumers indicate services that enhance the customer experience throughout the ownership lifecycle and deliver more value for their investment would further positively impact their perception of owning a personal car. For example, free routine maintenance is important to their ultimate purchase decision, and more than a third (35 percent) say they would be willing to pay extra to have a dealer pick up their vehicles for service and provide a loaner.

Dealer incentives like these can be especially important for competing brands, as European Millennials tend to look at more brands before they buy or lease a vehicle compared to other generational consumers. More than 80 percent consider three or more brands, and 30 percent may research five or more brand options. As a result, their experience throughout the buying process and the entire ownership lifecycle becomes a much more significant contributor to the brands they ultimately choose.

Unfortunately, there is work to be done at the dealer level if automakers are to deliver on Gen Y consumers’ expectations of the customer experience. More than half (58 percent) feel automotive dealers do not treat them with respect, and only a third have a positive attitude towards dealers. When it comes to sources of information for vehicles they may be interested in, European Gen Y ranks automotive dealerships fifth; only social media ranks lower.  

European Gen Y consumers demand proven and practical vehicle technologies

When it comes to vehicle technology, Gen Y consumers in Europe rank technologies that reduce operational cost and technologies that protect them from themselves as most beneficial.

The 2014 study reveals that 44 percent of European Gen Y consumers would prefer driving an alternative fuel vehicle within the next five years—primarily in an effort to reduce operational costs. Of the alternative powertrain options available today, hybrid electrics and plug-in hybrid electrics are the most popular choices. Still, only 14 percent of European Gen Y consumers expect to be driving a vehicle with one of these engine options in the near future. In this area, the group’s interest lags behind that of their Gen Y counterparts in other major and emerging markets around the world.

European Gen Y consumers also rate safety technologies as having a significant benefit. Technologies like blind spot detection and crash avoidance systems are seen as more beneficial (73 percent) than those that address fuel efficiency (66 percent). Interestingly, cockpit technologies that provide connectivity trail significantly with only 36 percent of Gen Y consumers in Europe expecting benefit from those technologies.

When it comes to self-driving cars, European Gen Y consumers are not ready to commit. While almost three-quarters (72 percent) of them in Europe are interested in basic automation (e.g., technologies such as anti-locking brakes, traction control, etc.), only 39 percent show interest in fully autonomous vehicles.

“Clearly European Gen Y consumers desire technology in their vehicles, provided it delivers practical operational cost and safety benefits. Moreover, the technologies need to be proven,” said Vitale. “It’s going to be interesting to watch how the evolution of autonomous driving vehicles will impact this generation’s perception. Despite their desire to be connected and protected, this generation does not currently appear to be comfortable with technologies such as autonomy that in reality address many of their concerns with vehicle ownership.”

To view the 2014 Global Automotive Consumer Study: Exploring European consumer mobility choices report, please visit www.deloitte.com/mobility.

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¹Colliers International. Generation Y. How population change will impact office space demand. November 2011. http://www.colliers.com/-/media/Files/EMEA/emea/research/generation-y/201111-gen-y-report-population-change