A recent study conducted by Deloitte sheds light on shifting consumer preferences in the automotive industry, indicating a growing inclination towards car subscription services, particularly among younger age groups.
According to Deloitte’s Global Automotive Consumer Study, based on responses from over 1,500 UK consumers, a significant segment of the population, especially those aged between 18 and 34, are showing a preference for car subscription models over traditional ownership. The study reveals that while 52% of consumers overall express disinterest in car subscription services, approximately 18% are in favour, with the figure rising to 28% among the 18-34 age bracket.
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Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, explains the appeal of vehicle subscriptions among younger consumers, highlighting the flexibility and choice they offer. He notes that these services provide the advantages of personal vehicle usage without the burdens of ownership, presenting a sustainable business model for used cars.
Affordability remains a key consideration for consumers when contemplating car ownership or subscription. The study indicates that 80% of respondents expect to pay less than £400 per month for their next used or new vehicle subscription.
Furthermore, the study delves into consumers’ attitudes towards purchasing insurance directly from manufacturers, with 32% expressing interest. Convenience and cost savings emerge as primary drivers for this preference, with 46% citing convenience and 41% anticipating cost savings over current providers.
Hamilton underscores the potential disruption to the automotive industry’s current business model, as manufacturers and dealers explore additional revenue streams such as in-house insurance products and subscription services.
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By GlobalDataDespite growing interest in car subscriptions, the study reveals a softening interest in battery electric vehicles (BEVs). Only 9% of respondents expressed a preference for new and used BEVs as their next car, down from 11% the previous year. Affordability, particularly lower fuel costs, remains a significant factor influencing consumers’ decisions regarding BEV adoption.
Concerns persist around EV driving range and charging infrastructure, with a third of consumers expecting a fully charged BEV to have a driving range of at least 400 miles. Additionally, 46% of respondents express apprehension about the lack of public electric chargers, highlighting the importance of addressing charging infrastructure concerns to encourage broader EV adoption.
Hamilton emphasises the need for initiatives targeting affordability, such as used car salary sacrifice arrangements, to stimulate BEV growth. He also underscores the importance of improving accessibility to public charging points, particularly for consumers without off-street parking, to integrate BEVs further into everyday life.
The Global Automotive Consumer Study is conducted annually and targets driving-age individuals, the study spans across 24 countries. In its 2024 iteration, the study amassed over 27,000 consumer responses from 26 global markets. Notably, the UK sample accounted for 1,500 respondents and was conducted between October 3 and 9, 2023.
