The customer’s
view: From
icon to cocoon,
glamor to utility

Freedom has always been a huge part of the car’s appeal. But in 2020, ‘freedom to’ has changed to ‘freedom from’. The idea of picking up friends, going to the beach, driving to an event or even just commuting in comfort has been replaced by avoiding public transport, staying away from other people – and in many people’s case, not commuting at all.

It wasn’t always like this. In late 1950s America, having a car was everything. For the first time, vehicles were universally accessible. As per Henry Ford’s prediction just 30 years earlier, “any man with a good job can afford an automobile”. By 1958, there were 68m+ cars registered in the United States – up more than two-fold since the start of the decade (from 25m). We can’t underestimate the social significance of the car. Between 1949 and 1964 (and beyond), the ways we shopped, ate, worked; where we lived and how we socialized; how we vacationed; how we dated (and who); how we engaged with popular culture and who we idolized – even what we valued – all changed as a direct result of the automobile.

No cars would mean no plush suburbs. No drive-in movies. No shopping malls. No Golden Arches.

The very tenets of western consumerism are built on four wheels. Simply having a car said I’ve made it!’ More importantly it shouted adventure, freedom, discovery, excitement and liberation.

The next Golden Age?

2020 has changed everything. The revolution is coming… Again. If you’re leading an auto brand in 2020, undoubtedly you’re feeling the strain. But let’s not miss the opportunity. If you lead an auto brand in 2020. This. Is. It…

For the first time, in a very long time, as consumers, we’re actually excited about leaving the house. We want to be outside. We really want to be outside. And outside looks very different. Because when you can’t go outside, adventure no longer means an expensive vacation. It’s not the annual family trip to Spain or Greece; it’s not backpacking in Peru.

For the first time in decades, as consumers, we want our cars. Moreover, we need them. We think that the landscape is set for a new golden age in auto travel. In the United Kingdom, the National Caravan Club reported that sales of motor homes had risen by 71% in July. More than a third (37%) of those sales were from people who had never owned a caravan. 34% of new sales were made by those under the age of 44. Caravan holiday bookings for next year’s season are already up by 200%.

Across the US, the #vanlife trend is booming. As is the price tag. A Mercedes Sprinter might cost $40,000 new. Converted, the value of what’s essentially a trade vehicle can rise to anything from $100,000 to over $400,000. Most suppliers have 10 month-plus waiting lists.

What does this mean? It’s more proof of the vehicle-as-cocoon idea; the freedom of the open road, plus the safety of having your very own space. The pandemic has in some ways shot attitudes right back to the 1950s. All of a sudden, those vintage travel
posters of winding roads through parks and forests are seductive rather than out-of-date. Flying thousands of miles to stay in a hotel seems both dull and dangerous.

The new adventure is closer to home and involves your own wheels, your own space and your own itinerary. We’re all
going on a road trip.

Have the world’s leading OEMs caught on? And how do they take advantage of this unprecedented opportunity?

70 years on, what happened?

Cars can be an identity purchase; a statement of who we are. What does a Mercedes say about you? They are advertisements for you on wheels, or at least they should be.

But now, while our cars are still a big-ticket purchase, they are too often just a necessity. A convenience. At worst, a utility. Cars – and car brands – just don’t seem to mean what they did.

As consumers, our relationships with our cars are increasingly functional. We now ask: Is it safe? Is it reliable? Is it economical? Given the advancements in production capabilities and new technologies, the answer to these questions is ubiquitously ‘yes’ at pretty much every point across the market. There are no longer any really bad cars – only dull ones.

The net result: we rent cars, even when we own them. Our relationships with our vehicles are transient. At best, we want the next model. We care the most when we buy – but almost as quickly as we’ve driven our cars off the forecourt, they disappear into the background narrative of our lives; they’re a functional and physical manifestation of the routine. Emotional equity depreciates almost as quickly and almost as dramatically as that of the machine itself.

For too many of us, our cars are like our washing machines; functional machines that serve a purpose. You buy the best one you can afford, then forget about it. No one loves their washing machine. But does it have to be this way?

From ‘why EV’ to ‘why not’?

What we value, and what we want to say, now have a greater sense of urgency. The symbols we use to communicate our perspective on the world are more meaningful. Cars have always been an instrument of self-expression. This emotional need is unlikely to change. But what we say and how we say it is shifting.

C Space research shows that 71% of consumers are more conscious of the environment as a direct result of the Covid-19 lockdowns around the world. We are more aware of our collective impact on the environments around us – and on each other (directly and indirectly).

The pertinent question for many consumers is shifting, from ‘Why EV?’ to ‘Why not EV?’ The more accessible the technology becomes, and the more accessible the pricing of EV models, the lower the barriers for entry.

The influence of this consumer reflection is already visible. Although demand was low, the Tesla Model 3 and Jaguar I-PACE were the bestselling models in the UK, this April. Demand will continue to increase as interest in EV technology continues to accelerate. In Asia Pacific, 54% of consumers are considering some kind of EV as their next purchase; in Europe, 56% of consumers fall into the same consideration category – and in North America, a market synonymous with gasoline, consideration has reached 41% .

In April, the Chinese government committed $1.4bn to subsidize the construction of charging stations across the country. European governments continue to introduce new purchase subsidies, tax breaks, and a combination of other consumer incentives to encourage EV adoption (over and above the tight emission restrictions they place on manufacturers). Partnerships and infrastructure collaborations with local and regional government will continue to play a significant role in the expansion of the EV market.

In the near future, the cars we choose to buy will signal much more than status. Increasingly, consumers want to show that they are contributing to the solution and signaling sustainability.

We think that the most successful car brands will go beyond simply helping customers make an informed decision, they will actively encourage it, at every point across the purchase journey.

18% of shoppers would buy
a vehicle sooner if there was
a purchase option online

‘Add to basket’

The ways we buy cars are changing.

Malcolm Myers, founder-CEO of consultancy EIV, said this year tha – even before Covid – the current model is actually broken because it does not offer the end-to-end digital shopping experience that online customers have come to expect. It’s a long way from the classic online shopping experience consumers have come to expect from Amazon, ASOS et al. Myers says: “The car classified operators depend on intermediaries. And does it still make sense for dealers to have expensive forecourts with large amounts of stock?”

He predicts the rise of new-wave platforms which allow car buyers to complete the whole transaction online in one place – just like the $4bn revenue, eight-year-old Carvana, in the US, and Cazoo, in the UK. These services threaten to shake-up the whole business with end-to-end car buying services including finance, insurance, warranties, free home delivery and a seven-day money-back guarantee.

And then there’s the Tesla model, where the whole process is online. They do have physical showrooms, but they’re nothing like the traditional dealership. They’re just somewhere you can feel and touch the car before
ordering online. It’s an increasingly attractive model – Volvo EV spinoff Polestar is also using that formula, as is Chinese brand Lynk & Co.

Too many people have found the enforced visit to a dealer ends in feeling patronized, hassled and ripped-off. That can’t be healthy for the long-term survival of that method of buying a car. Instead, the new breed of DTC startups, and the new or established manufacturers who are pivoting towards a customer-facing online experience, are shaping the future of car buying.

It’s a big-ticket item, but consumers are now habituated to click-and-buy almost everything else. Trust is crucial, of course, but reputable sellers will build a customer base sooner than many think.

As McKinsey have pointed out: ‘In both buying and servicing, a next normal seems to be emerging… Digital becomes more important along the entire purchase funnel, with half of consumers being interested in online and contactless sales and service.’

The return of DIY culture

From the consumer perspective, there’s a duality to DIY servicing. On the one hand, the product has malfunctioned. It’s an inconvenience. And a cost. But on the other, it’s an opportunity. The consumer emotionally invests in a solution. They carry out the repairs (often learning or utilizing new skills).

Upon completion, there is a sense of accomplishment; of pride. They hate that the car broke down in the first place. But they love that they were able to fix the problem. And in that sense, the machine becomes just a little bit more ‘owned’.

Are we entering a new age of the home mechanic? And what does this mean for OEMowned service center profits?

Consumers anticipate increased online ordering of parts and more DIY work on their vehicles, according to McKinsey. It makes sense.

Regardless of individual economic circumstances, the culture of ‘mend and make do’ currently seems more prevalent. More urgent. In many instances, we’ve had to muddle through.

Parts suppliers, however, are financially weaker than the big manufacturers they serve. According to The Economist, nearly a quarter of 400-odd stock market-listed parts-makers face immediate cash shortfalls.

In this challenging environment, the D2C models start to look increasingly appealing for these smaller suppliers. Will these parts manufacturers bypass the OEMs altogether and forge strong relationships with a new market?

The automotive companies who are quick to realize and capitalize on this opportunity have the potential to emerge from the pandemic stronger – not just in terms of capital margin gain, but in terms of the emotional bond consumers have with their vehicles.

Cocoons of mobility

In 2020, of course, everything changed – but drivers rediscovered the sense of personal freedom a car can bring. The sidewalks emptied of commuters, now home-working, but the streets filled up with drivers who didn’t want to risk public transport.

Travel by car became a more attractive option, as the only means of travel that provides safety and control today. In a post-Covid world, that safety and control take on new meaning. They transcend the functional and become deeply emotional.

“I love my little car,” Hannah, a 40-year-old mother from Manchester, UK, told C Space researchers about driving her Toyota Yaris. “I get in
the car and I’m in control. With the world the way it is right now, I feel like driving is one of the only things that hasn’t changed,” she said. “It’s my music; my route; my time. No one telling me what to do or how to do it. And I’m safe,” she explained.

In a world where everything seems just a little bit more dangerous, control is everything. And right now, nothing says control like getting in the car and driving. Pick the destination. Pick the soundtrack. Pick the route. Go.

A third of consumers value constant access to a private vehicle more than they did before COVID-19, according to McKinsey, and half say that they are open to extending their use beyond just travel to connect with the world in a safe way (including experiences like visiting drive-in movie theaters, concerts and food venues).

Once you step out beyond the front door, the car becomes the ultimate safe destination. Whilst you’re in that cocoon, you’re protected from the world outside – and all the limitations that come with it, right now. No disease. No face masks. No new rules or ways of being. Just you and the road (and maybe the kids too). It’s just like it always was.

Consumers around the world expect to shift intercity travel and the day-to-day commute away from current modes of transport: planes, trains and bicycles.

And in the absence of being able to show off what you wear, maybe
the car as an expression of your personality is even more important. The most successful auto brands will understand that cars now present a very viable alternative to broader mobility options – and will actively position themselves against these alternatives.

Consumers around the world expect to shift intercity travel and the day-to-day commute away from current modes of transport: planes, trains and bicycles.

And in the absence of being able to show off what you wear, maybe the car as an expression of your personality is even more important. The most successful auto brands will understand that cars now present a very viable alternative to broader mobility options – and will actively position themselves against these alternatives.