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1. Automotive the way we see it
Cars Online 09/10
Understanding Consumer Buying Behavior
in a Volatile Market

2. Contents
Introduction 2
Executive Summary 3
Developing Markets: Buying Trends Evolve Rapidly 5
How Consumers Buy: Target Your Marketing Mix 8
Green Vehicles: A Force for the Future 11
The Role of the Web: Consumer Usage Pattern Emerges 14
Online Buying: ‘No Hassles, No Negotiations’ 17
Customer Interaction: Loyalty and Satisfaction Rates Improve 20
Aftersales/Servicing: Focusing on the Post-Sale Experience 24
Conclusion and Recommendations 27

3. Automotive the way we see it
Introduction
Mergers and acquisitions. Bankruptcy This year’s report focuses on both
filings. Government intervention. mature and developing markets. The
Vehicle scrapping and rebate research involved more than 3,000
programs. The past 12 months have consumers in Brazil, China, France,
brought fundamental changes to the Germany, India, Russia, the United
automotive industry around the globe. Kingdom and the United Sates.
Last year ushered in an unprecedented In this edition we take a deeper look
global downturn that originated in at top-of-mind issues such as online
2007. What started as a financial buying of vehicles and
crisis soon expanded into the larger parts/accessories, alternative-fuel
economy, affecting mature and vehicles and aftersales/servicing. In
developing markets alike. The addition, we asked consumers to
automotive industry has been one of think about the biggest changes they
the hardest-hit sectors. The downturn expect to make in how they shop for
has led most automotive businesses to and buy vehicles in the coming years.
put in place initiatives aimed at short- Their responses provide valuable
term survival and mid-term stability insight into consumer expectations
with the focus largely on cost cutting about the future of the vehicle buying
and cash preservation. Tomorrow’s process. Look for their direct quotes
winners, however, will shift their throughout the report.
focus to longer-term prosperity with
the emphasis on future differentiation We hope that the findings of Cars
and competitive advantage. Online 09/10 will provide automotive
manufacturers and dealers with
To achieve this objective and regain insights into changing consumer
their footing, automotive companies dynamics in both mature and
must have a deep understanding of developing markets, and will help the
consumer buying behavior. Cars industry gain a better understanding
Online 09/10 – Capgemini’s 11th of consumer buying behavior in
annual global automotive study – today’s turbulent climate.
aims to provide insight into how
consumers shop for vehicles, what
leads them to buy and what they are
really looking for from the full vehicle
lifecycle experience.
“ I believe the whole car industry will soon look very
different. Those companies owned by the government and
unions will be bust. Those that listen to the public and
offer value, fair prices and the right features will
prosper. U.S. consumer
”
Cars Online 09/10 2

4. Executive Summary
With vehicle sales suffering in most experts or other consumers in-market environment as the primary reason:
markets today and automotive is an important trend, which grew 26%, up from 19% the previous year.
companies focused on cost cutting strongly this year. Traditional This trend was particularly evident in
and cash preservation, it’s easy to take information sources such as TV the U.S.
your eye off the consumer. But, in a advertising remain important in
climate characterized by volatility, developing countries, however, and Improvements in brand and
consumer insight is more important
than ever as buying behavior patterns
should be part of the marketing mix. 4 dealer loyalty and overall
satisfaction with the buying process
evolve rapidly. How do car buyers Consumers want to buy vehicles bode well for the industry. With
research vehicles? What types of cars
are they looking for? What triggers
2 and parts and accessories
online as they look for lower prices
plenty of bad news for automotive
companies these days, our research
them to buy? Where – and how – do and an alternative to the traditional uncovered a bit of good news. More
they want to buy? How do they want dealer model. Nearly 40% of than two-thirds of respondents said
to communicate with manufacturers respondents said they would like to they were likely to purchase the same
and dealers? buy a car over the Internet (the make/brand as their current vehicle,
complete end-to-end process) and half up from 61% last year. Similarly,
Capgemini’s Cars Online research aims would buy parts and accessories. dealer loyalty also rose, with 63% of
to answer these questions and more to While lower price is the leading consumers saying they were likely to
provide insight that can help reason, many respondents said they purchase from the same dealer where
automotive companies respond faster simply did not want to negotiate price they bought their current car, up from
and more effectively to changing or interact with the dealer in person. 59% the year before.
consumer needs and demands. Consumers seem to be polarized in
their desire to negotiate: about one- Satisfaction with the overall buying
Key Findings quarter wanted the ability to negotiate process was also up somewhat.
The research uncovered a number of a better deal, but another one-quarter However, consumer approval was
key findings: felt this was something they preferred more muted in the mature markets,
to avoid. demonstrating that there is still work
Usage of the web as a key to be done to improve the customer
1 information source during the
vehicle buying process has become 3 Green vehicle ownership
continues to rise as
experience in the U.S. and Western
Europe.
pervasive across most markets. environmental concerns grow.
Almost 90% of consumers today use Consumers indicate a growing Developing markets show early
the Internet to research vehicles, up
from 61% in 2005. A clear online
confidence in their understanding of
so-called “green” vehicles. This
5 signs of trending toward mature
markets, as consumers in the BRIC
usage pattern has emerged, with increased knowledge is influencing countries become more familiar
consumers turning initially to search buying decisions. In this year’s study, with buying cars. For example, this
engines, which jumped up the list of 41% of consumers said they currently year the gap between the factors that
information sources this year; then to own a fuel-efficient or alternative-fuel impact vehicle decisions in mature vs.
manufacturer and dealer sites for vehicle, up from 36% the year before. developing markets was much
factual information about vehicles, Another 30% said they plan to buy a smaller. Greater convergence will
prices and availability; and finally to fuel-efficient or alternative-fuel vehicle. likely still take a number of years, and
consumer-to-consumer tools like market differences will remain for
discussion sites for qualitative Interestingly, the reasons behind these some time. For instance, mature
information and opinions. buying decisions are evolving. While markets increasingly look for
fuel economy remains the leading information online, whereas
The ability to interact online and hold driver, a growing number of developing markets are still keen to
real-time discussions with automotive respondents named impact on the get information from more traditional
3

5. Automotive the way we see it
‘‘ Many of the formalities of car purchases will soon be a
thing of the past. The selection and purchase process will
be faster, easier and nicer.
Russian consumer
’’
sources such as TV advertising and manufacturer to respond to an online
trade shows. And mature markets inquiry within four hours. In China,
focus on permanent value when consumers are even more demanding,
choosing a vehicle, whereas with more than half expecting a
developing markets show greater response within an hour. In addition,
interest in more transactional almost one-quarter of respondents
marketing such as cash-back bonuses. point to ease and speed of transaction
as the key reason for buying a vehicle
Now is the time for automotive online, and 30% say it is the driving
companies to focus attention on factor behind their desire to purchase
providing a positive customer parts and accessories over the web. It
experience in developing countries is important to note that most of these
About the Study
while loyalty and satisfaction levels factors leading to consumer
remain higher than in mature frustration seem to be down to poor
markets. basic management and are in the Capgemini worked with SmartRevenue,
industry’s own hands to resolve. a Ridgefield, Connecticut-based
As the duration of the vehicle
6 buying cycle contracts,
automotive companies have less 8 Less than half of consumers
with cars still in-warranty have
research firm, to conduct the survey for
Cars Online 09/10. All analysis and
interpretation of the data has been
time to influence purchases. their vehicles serviced at the made by Capgemini in collaboration
Consumers today can quickly and purchasing dealership. This with the Car Internet Research Program
easily get vast amounts of information represents a significant missed (CIRP) of the University of Ottawa,
about the vehicles they are interested aftersales opportunity for dealers. Canada. In total, more than 3,000
consumers were surveyed in eight
in, resulting in a shrinking buying And it may also impact repurchase
countries: Brazil, China, France,
cycle. What used to take six months is decisions, as consumers tend to be
Germany, India, Russia, the United
now likely to take only four, with more likely to buy their next vehicle Kingdom and the United States.
showroom visits coming ever closer to from the servicing dealer rather than
the point of purchase. More than two- the prior purchasing dealer. The composition of the consumer
thirds of respondents begin the sample in each country was based on
research process two to four months While this topline review provides a projectable national samples
before they plan to buy and 60% visit summary of key findings from this representative of the population in terms
the showroom for the first time within year’s Cars Online study, the sections of region, age and gender. All
two months of purchase. that follow offer more in-depth data consumers surveyed were in-market
and analysis focused on key topics (24% plan to buy or lease a vehicle
within three months; 29% in four to six
Connecting with shoppers during the such as buying behavior patterns, web
months; 11% in seven to nine months;
research period and providing them usage, online buying, customer
and 36% in 10 to 12 months).
with the right tools and information is interaction and aftersales/servicing
critical in influencing buying expectations.
decisions. By the time they visit the
showroom it is often too late.
Consumers want the car buying
7 process to be easier and faster.
A number of indicators point to a
growing desire for improved ease and
speed of transaction. For example,
more consumers expect a dealer or
Cars Online 09/10 4

6. Developing Markets: Buying Trends
Evolve Rapidly
Developing markets are not alike in every respect, as our research identifies
variances in buying behavior from one country to another.
Don’t Call Them “Emerging” The developing markets have seen
On a recent visit to a large Chinese strong vehicle sales growth in recent
automotive manufacturer, we years. However, just like the mature
discussed the market and its potential. markets, they have suffered somewhat
During the conversation, a company in the past 12 months. For example,
executive took issue with the term according to the Association of
“emerging,” often used to describe the European Businesses, Russian car
Chinese market. He noted that given sales fell by 49% in the first half of
the size and growth of the automotive 2009, and a similar drop is projected
business in his country, “emerging” for the second half of the year. In
hardly seemed accurate anymore. Brazil, ANFAVEA (the Brazilian
National Association of Motor Vehicle
We took his point. This year we refer Manufacturers) expects car sales to fall
to the BRIC countries as “developing” this year for the first time since 2003.1
markets, because as the Chinese The picture is brighter in China and
executive pointed out, these markets India. Nevertheless, the potential for
have already emerged. significant long-term growth remains
strong in all four markets.
In this year’s study we again track
consumer buying behavior in the Following are some of the key trends
developing markets of Brazil, Russia, noted in the developing regions.
India and China. The findings from Additional variances by market are
the four BRIC countries offer a glimpse discussed throughout the full report.
of how these dynamic and growing
automotive markets are evolving. Signs of Convergence Appear
This year we found early signs of
convergence in Russia, Brazil and
India as consumers in these markets
become more familiar with buying
cars. As a result, some of the trends
are beginning to move closer toward
those in the mature markets. We have
seen a similar rationalization in China
in recent years too.
For example, this year the gap
between the factors that impact
vehicle decisions in mature vs.
developing markets was much
smaller. Last year, consumers in the
BRIC countries tended to rate all of
the factors as more important than
did respondents in mature markets.
This year, the numbers were much
1 “April car sales in Brazil fall 13.7% from the previous
month,” http://en.mercopress.com/2009/05/08/april-car-
sales-in-brazil-fall-13.7-from-the-previous-month,
May 8, 2009
5

7. Automotive the way we see it
closer to those in the mature markets,
with the exception of short-term Consumers in Developing Markets Consider More Vehicles (% consumers saying)
factors such as low financing and
cash-back incentives, which are still How many different makes/models of vehicles
more important in developing are you currently considering?
countries than in mature markets. 2 1
100% 1 4
Customer loyalty and online buying 14
trends also show signs of convergence,
with slight declines in some of the 27
80%
developing markets as they begin to More than 7
move closer to the levels typically
6-7
seen in the mature markets.
60% 4-5
The shift toward convergence is 2-3
67
particularly pronounced in Russia, 1
where many vehicle buying patterns
resemble those in western markets, a 40%
60
trend that was apparent last year as
well. For example, Russian consumers
are more likely than those in the other
20%
developing markets to rely on web-
based information sources and less so
on traditional sources such as TV 16
8
advertising and auto shows. This pattern 0%
mirrors consumer behavior in the Mature Markets Developing Markets
mature markets, particularly the U.S.
Source: Capgemini
A similar trend is apparent in the type
of vehicle consumers plan to buy.
Russian respondents are more likely Differences Between Developing
than their counterparts in the other and Mature Markets Remain
BRIC countries to want to buy a used
vehicle, no doubt helped by recent
government tax changes. About one-
quarter said they plan to buy a used
Despite the trend toward convergence,
significant differences between
developing markets and mature
markets remain. For example,
“ I have confidence that
we will see big changes in
the kinds of cars we buy;
car, which is about the same as the consumers in most of the developing they will be friendly to the
number in the U.S. The stronger used countries are more likely to rely on environment and to my
car market in both the U.S. and traditional information sources such
pocket. Brazilian consumer
Russia likely accounts for the fact that
consumers in those countries are
more inclined to use service stations
and auto repair shops for servicing. In
as TV advertising when researching
vehicles. Respondents from mature
markets primarily use web-based
sources. This is likely due to the fact
”
addition, Russian consumers show that consumers in the developing
strong interest in buying a sports markets are still new to the car buying
utility vehicle, again similar to process and want as much
consumers in the U.S. information as possible from a wide
range of sources.
Cars Online 09/10 6

8. Dealer Visits Vary in Developing Markets (% consumers saying)
How many dealerships will you visit before purchasing/leasing your next vehicle?
60%
50%
Don’t know
40% More than 5
4-5
30% 3-4
2-3
1-2
20%
1
10%
0%
Total U.S. Western Russia Brazil India China
Europe
Source: Capgemini
Interestingly, however, respondents in Variances in Buying Behavior Differences were also apparent in
developing countries who do use the Among BRIC Markets terms of the types of vehicles
Internet are more likely than their It is important to note that all consumers plan to buy. Brazilian
counterparts in mature markets to developing markets are not alike in respondents show a much greater
turn to new tools such as blogs, video every respect and that we see tendency toward buying smaller cars
sites and RSS feeds. They may be new variances in buying behavior from one and place greater emphasis on hybrid
to the vehicle buying process, but not country to another. or other alternative-fuel cars.
to technology.
Brazil stands out in a number of
Consumers in developing markets are respects. For example, Brazilian
also more likely than those in mature consumers are more likely than their
markets to consider a greater number counterparts in the other developing
of makes and models before buying. countries to look at a greater number
One-third of respondents from the
BRIC countries look at four or more
makes/models, compared with only
17% in the mature markets.
of vehicles. More than half said they
will consider four or more
makes/models.
“ I would like to see a
point system for providing
feedback on a blog or
Russian consumers tend to visit more forum site, which would
In addition, consumers in developing dealers than do shoppers in the other enable you to get some
markets are prepared to spend a developing markets. Almost one-third
kind of discount from the
significantly higher proportion of their of respondents in Russia said they will
dealer or manufacturer.
”
income on a vehicle. In the U.S., for visit four or more dealers before
example, the majority of respondents buying, compared with only 7% in Indian consumer
expect to spend less than 25% of their Brazil, 13% in India and 4% in China.
annual income on their next vehicle, This may be due to the fact that there
compared with the developing are more dealerships in Russia to
markets where the majority of choose from than in countries such as
consumers will spend up to 50% of India and China.
their income. In Russia, one-third are
prepared to spend more than 50%.
7

9. Automotive the way we see it
How Consumers Buy: Target Your
Marketing Mix
Vehicle buyers are taking less time to research and visit showrooms and are
increasingly turning to web-based information sources.
Vehicle Buying Cycle Shrinks Understanding the shifting timeframe
Traditionally, the vehicle buying cycle is vital, as the research period is the
has been shown to last about six critical time to reach in-market
months. Our research indicates that consumers with the right information
this period is compressing as consumers and the right response mechanisms.
are able to gather significant By the time a consumer visits the
information about vehicles quickly showroom, it is often too late to
and easily over the web. More than influence the vehicle decision.
two-thirds of respondents begin the
research process two to four months What triggers a consumer to move
before they plan to buy and 60% visit from the research stage into the
the showroom for the first time within showroom? It is not so much a
two months of purchase. This pattern particular point in time but rather a
is fairly consistent across markets. shift in mindset.
The Shrinking Vehicle Buying Cycle (% consumers saying)
How long before your planned vehicle purchase/lease How long before your planned vehicle purchase/lease
did/will you begin to research vehicles? will/did you visit a dealership showroom?
<2 weeks 2 weeks-1 month 1-2 months <2 weeks 2 weeks-1 month 1-2 months
2-4 months 4-6 months 6-8 months 2-4 months 4-6 months 6-8 months
8-10 months 10-12 months >12 months 8-10 months 10-12 months >12 months
30% 30%
25% 25%
20% 20%
25
23 27
15% 15%
17 23
22
10% 14 10%
11
5% 7 5% 11
6
3 3 3 1 1 1
2
0% 0%
Total Total
Source: Capgemini
Cars Online 09/10 8

10. In earlier consumer research conducted Ensuring that your showroom is
by the Car Internet Research Program among those visited by consumers is a
(CIRP) and Capgemini, we found that challenge as consumers visit fewer
the switch from researching to dealer dealerships today than in past years.
visits typically occurs when “enough” About one-quarter of respondents said
information has been gathered and a
consumer feels ready to negotiate. Of
course, what constitutes enough
they visit only one or two dealerships
before buying a vehicle. “ There should be a real
price for a vehicle and a
real warranty with no fine
information will vary from one buyer The Search for Information
print. U.S. consumer
to another. However, from a power-
struggle perspective, it typically means
that the customer knows what he
wants and how much he is ready to
Where do consumers go for their
information during the research stage?
Most turn to the web. Almost 90% of
consumers say they use the Internet to
”
pay. When that state of mind is research vehicles. This year, the use of search engines
reached, the buyer is ready to enter jumped considerably, moving up to
the showroom. the third spot from seventh position
last year. Search engines are
increasingly becoming a key starting
Expected Use of Information Sources (% consumers saying)
point for consumers as they search for
new models and brands, as well as
Dealer websites
information about automotive-related
blogs, reviews and other types of
Manufacturer
Internet sites resources that might help them during
the research process.
Search engine
Family and friends Usage of manufacturer websites as
well as automotive blogs, forums and
Information websites
discussion groups also increased.
Independent car While most web-based sources show
valuation services
gains in mature markets this year, the
Manufacturer-specific
franchise dealer use of more traditional sources such
Used car dealer
as TV advertising and auto shows,
continues to decline among Western
Specialist motoring/
automotive press car buyers. In contrast, while
Internet news sites
consumers in developing markets use
the web to research vehicles, they still
Print advertising rely on traditional sources too. This is
Mature Markets
Independent particularly true in Brazil, India and
Developing Markets
e-tailer sites China, though less so in Russia. For
Auto shows example, 30% of consumers in the
BRIC regions use and value TV
TV advertising
advertising, compared with only 16%
Web forums, blogs or of respondents in the mature markets.
Internet discussion groups
0% 10% 20% 30% 40% 50% 60%
These trends point to the importance
of targeting your marketing mix to the
Source: Capgemini specific market. This approach has
9

11. Automotive the way we see it
Importance of Factors in Consumers’ Choice of Vehicle
(% consumers saying “important/very important”)
Reliability of brand
“ Petrol vehicles will
become a thing of the past
and more emphasis will be
Safety placed on safety, the
Price of vehicle environment and
Fuel economy economical vehicles. I will
Vehicle availability and/or reliability
of sales and delivery date
concentrate more on
Quality of interior styling manufacturer and
Aftersales service government websites for
Brand name of vehicles, information. UK consumer
products and services
Extra options at no cost
Treatment by the manufacturer
during my previous ownership cycle
Treatment by the dealer during
”
my previous ownership cycle Mature Markets
Ability to research information Developing Markets
on the Internet
Low emissions
Product features/options
to fit my needs
0% or low financing
Cash-back incentive
Option for additional warranty
coverage or service credit
Coupons/options for
third-party providers
Hybrid or other
alternative-fuel cars
0% 20% 40% 60% 80% 100%
Source: Capgemini
already resulted in some significant vehicle that a consumer chooses? As
shifts in spending. For example, in the in prior years, the top four factors
U.S. local broadcast TV spending in across the board are reliability, safety,
the automotive category fell more price and fuel economy. In a
than 50% in the first quarter of 2009, continuation of our findings from
according to the Television Bureau of last year, consumers in developing
Advertising.2 markets are more likely than their
counterparts in mature markets to
Reliability and Safety emphasize transitory factors, such as
Matter Most cash-back incentives and coupons/
Once the research process is complete, options for third-party providers.
what factors ultimately determine the
2 “A World Without Local Car Dealer Ads?” Advertising Age, June 12, 2009
Cars Online 09/10 10

12. Green Vehicles: A Force for the Future
Growing interest in fuel-efficient and alternative-fuel vehicles will lead to
fundamental shifts in consumer buying behavior over the coming years.
“Time We Got Off the Oil Brazil, which is not surprising given
Wagon” that ethanol-based and flex-fuel
When consumers were asked vehicles have been sold in that country
about the changes they expect to see for a number of years. Almost 90% of
in the way they buy vehicles over Brazilian respondents say they have a
the next decade, mentions of more strong understanding of green vehicles.
environmentally friendly cars vied
with online buying as the major Evidence of rationalization between
change. “I am hoping that soon my developing and mature markets is
choices for alternative-fuel/green vehicles apparent in this area. Confidence in
will be much larger. It’s time we got off green knowledge was up in the U.S.
the oil wagon,” said one respondent and level in Western Europe, but down
from the U.S. somewhat in developing markets.
That sentiment was echoed
throughout the eight markets studied.
Even in Germany, where vehicle
performance was a key factor for
many consumers, one respondent
noted that “A fast car is not exciting if it
consumes a lot of fuel.”
Considerable focus today is being put
“ I think the auto industry
is going to make a
complete change within 10
on developing more fuel-efficient and
alternative-fuel vehicles by most major to 15 years. I hope there
car manufacturers, as well as will be no emissions, 100%
governments, energy companies and
clean fuel. U.S. consumer
other industries. This growing focus
on “green” is being strongly fueled by
consumer demand stemming from
economic and environmental factors.
”
In our research, 41% of consumers
said they currently own a fuel-efficient
or alternative-fuel vehicle, up from
36% the year before. And another
30% said they plan to buy a fuel-
efficient or alternative-fuel vehicle.
Consumer Confidence About
Green Knowledge Is High
Consumers in most markets today are
gaining a better understanding of
what green really means. Three-
quarters of all respondents say they
are confident or very confident in
their knowledge of green vehicles.
The degree of confidence is highest in
11

13. Automotive the way we see it
Brazil, ethanol or gasoline/ethanol
Ownership of Green Vehicles Increases (% consumers saying) flex-fuel cars are popular.
Own a fuel-efficient/
41 It is not surprising that electric vehicles,
alternative-fuel vehicle 36
particularly hybrid gas/electric cars,
would be at the top of consumers’
list of alternative-fuel choices. They
Plan to buy a fuel-efficient/ 30 are the most commercially mature
alternative-fuel vehicle 30 and viable of the various kinds of
alternative vehicles and have
Thinking seriously about
demonstrated the potential to
16 2009
buying a fuel-efficient/ reduce fuel consumption and
alternative-fuel vehicle 2008
19 exhaust emission.
Do not own/not interested 13
“I think we will start seeing an awful lot
in buying a fuel-efficient/ more cars available in electric form,”
alternative-fuel vehicle 15
said a consumer from the UK. “And
0% 10% 20% 30% 40% 50% greater pressure will be put on drivers to
be more green aware.”
Source: Capgemini
Although sales of hybrid electric
vehicles still represent only a small
Why Consumers Buy Green Most of the developing markets also share of overall car sales and despite
While fuel economy remains the saw an increase in the focus on the slower sales this year, future demand
number one reason that consumers environment. In India, for example, is expected to grow. This is
own or plan to buy a fuel-efficient or 32% of respondents pointed to the particularly true in markets like the
alternative-fuel vehicle, environmental environmental impact, up 10 percentage U.S. and Japan as prices of hybrid and
impact is a growing factor. An points from the prior year. Similarly in other types of electric vehicles begin
increasing focus on environmental China, 32% identified environmental to drop. By some estimates, global
issues overall, combined with lower impact as the primary reason behind sales of hybrid electric vehicles may
fuel prices during the past year are the green vehicle decisions, an increase surge at a compound annual growth
likely drivers. The trend was from 20% in 2008. rate as high as 12% over the next few
particularly apparent in the U.S. years. Developing markets like Brazil,
where 20% of respondents said the Hybrids Lead the Way India and China are also expected to
environment was their primary reason According to our research, gas/electric contribute to this growth as they put
for choosing a fuel-efficient or hybrids are the primary type of more focus on environmental issues
alternative-fuel car, up from just 9% alternative-fuel vehicle that consumers such as CO2 reduction.
the previous year. currently own or plan to buy. This is
particularly true in the Western
Consumers in Western Europe markets. In the U.S., for example,
remain the most focused on the 60% say they own or plan to buy a
environment, with 31% indicating gas/electric hybrid car, up from 52%
that environmental impact is the in 2008. Gas/electric hybrids are less
primary reason for owning or dominant in the developing markets,
planning to buy a fuel-efficient or where consumer interest is also
alternative-fuel car. This number is focused on natural gas or natural gas
up from 22% the year before. hybrids and all-electric vehicles. In
Cars Online 09/10 12

14. Why Consumers Buy Green Vehicles (% consumers saying)
100% 2 1 3 1 2
1 4
11 9 11 11 6
13 2
17 3 6
4 2 6
80% 3 19
20 Other
26 22 32 32
31 Preserve residual value of vehicle
60%
Cost
Tax credit
69
40% Impact on the environment
63
59 Fuel economy
57 46 54 52
20%
0%
Total U.S. Western Russia Brazil India China
Europe
Source: Capgemini
Base: Consumers who own/plan to buy a fuel-efficient or alternative-fuel vehicle
Will Consumers Pay for Green? “But I hope that prices will come down as
While consumer interest in green it will encourage others to purchase this
vehicles is strong and growing, cost type of vehicle as well.”
remains an issue. Our research found
“ I would consider a
hydrogen-powered sedan.
The maintenance is
that consumers show some
willingness to pay for improved fuel
efficiency, although about 70% of
respondents said they would pay no
Prices are expected to drop over the
coming years, but it is still early in the
cost-reduction curve. Government-
sponsored programs in the form of
affordable and it’s good for more than 10% extra for a fuel- both consumer credits/rebates and
efficient or alternative-fuel vehicle. battery development incentives in the
the environment too.
German consumer
” And in the mature markets, close to
20% said they were not prepared to
pay any premium at all.
electric vehicle business provide some
cost relief. However, the price gap
between gas-powered and alternative-
fuel vehicles will need to shrink
“I will purchase an alternative-fuel car as considerably if the mass market is to
I am very concerned about the accept green cars.
environment,” said a U.S. consumer.
13

15. Automotive the way we see it
The Role of the Web: Consumer Usage
Pattern Emerges
As Internet sophistication grows, consumers look to different kinds of sites for
targeted information.
Use of the web during the vehicle The importance of features such as
buying process is now at nearly full comparators and configurators was
saturation in most markets. The down somewhat this year. Least
exception is China, where Internet important to consumers are features
penetration remains low in some such as dynamic graphics, the ability
regions. A clear pattern has emerged, to check dealer inventory, availability
with many consumers starting their of a website in their native language,
research with search engines, then and online information about the
moving to manufacturer and dealer latest ads and promotions.
sites, and finally to consumer-to-
consumer tools like blogs and Some differences were apparent by
discussion sites. market. For example, comparators
and cost calculators were somewhat
What Consumers Want more important to consumers in the
from the Web mature markets, especially the U.S.
As Internet sophistication grows, Respondents in the developing
consumers look to different kinds of markets, particularly those from India,
sites for targeted information. From were interested in the ability to get
manufacturer and dealer sites, guidance and advice over the web and
respondents say they want to find a to communicate with their dealer or
full range of product information and car company online to solve
base pricing above everything else. problems, buy accessories, etc.
This has been the case now for a
number of years.
Wide Use of the Internet to Research Vehicles (% consumers saying)
100%
“ I want to look for a
vehicle that is more fuel
efficient and will be
80%
researching at green
websites and different
60% 2009 car blogs because
2008 consumer opinions
really matter to me.
”
2007
40%
2006 U.S. consumer
2005
20%
0%
Total U.S. Western Russia Brazil India China
Europe
Source: Capgemini
Note: Russia, Brazil and India were not included in the research until 2008
Cars Online 09/10 14

16. New Tools Provide New
Reasons for Using Consumer-to-Consumer Online Tools (% consumers saying) Information
After doing research via manufacturer
and dealer websites, an increasing
Opinions/reviews about
specific car brands/makes number of consumers are turning to
online consumer-to-consumer tools
Discussions with other consumers
such as automotive blogs, forums,
News about new vehicles discussion groups, video sites and RSS
feeds. The use of these tools during
Helpful hints
the research process has grown in
Discussions with automotive experts
recent years and is particularly high in
the developing markets.
Information about vehicle recalls
Opinions/reviews about
Indian consumers are among the most
specific car dealers likely to use automotive blogs (46% of
Indian respondents vs. an average of
Personal stories
2009 40%), online video sites (50%, compared
Discussions about a
specific automotive topic
with the average of 32%); and RSS
2008
Information about automotive
feeds (28% vs. 12% overall). Respondents
events/auto shows 2007 from Brazil are the most likely to use
Other car images/videos social messaging/micro-blog sites like
Twitter (30% vs. the average of 13%)
Spy photos/videos
and mobile phone applications (27%,
0% 10% 20% 30% 40% 50% 60% compared with 10% overall).
Source: Capgemini Consumers rely on these sites
Note: Multiple responses allowed
Base: Consumers who use consumer-to-consumer online tools to research vehicles primarily to gain more qualitative,
objective information about vehicles
and dealers. This year respondents
placed growing emphasis on
interactive discussion sites, rather
than static information such as vehicle
news. For example, 29% said they
look for discussions with other
consumers, up from 21% in 2007;
and 28% participate in discussions
“ I would like to see one centralized website where it
would be possible to find information on all offers for all
brands. It would be a more flexible and simple way to
with automotive experts, an increase
from 20% two years ago.
Not only do these kinds of tools
choose a car. Russian consumer provide consumers with additional
” information as part of the research
15

17. Automotive the way we see it
process, they can influence buying
decisions. More than two-thirds of
consumers said they would be more
likely to purchase a particular vehicle
or buy from a certain dealer if they
found positive comments posted on
blogs, forums and the like. The
numbers were even higher in Brazil
and India.
Conversely, 57% of respondents said
they would be less likely to buy a
particular make or from a specific
dealer if they found negative
comments on these kinds of sites.
Building Relationships Via the Web
What if consumers had the chance to speak to a vehicle manufacturer adviser as they
narrowed down their vehicle selections? Someone who could help them by answering
technical questions, or identifying resolutions to their specific needs (as a hotline would);
or by being reassuring – offering an ear, a human voice and advice (like a coach).
In research conducted by the Car Internet Research Program (CIRP) and Capgemini, we
found that consumers saw value in pioneering flexible web services, such as virtual
assistance, particularly during the critical time period during the research process before
they enter the dealer showroom.3
Our research made it clear that implementing a service like a “Virtual Adviser” into a
manufacturer’s web model can engage early-phase shoppers interactively and set the
stage for building a superior customer relationship experience. This can provide the
following benefits:
• Enhance the probability of a shopper choosing your brand as one of the two models
they will closely examine.
• Increase the likelihood that your dealership will be the one they visit.
• Improve the chances that the shopper will arrive at the dealership feeling more
comfortable, with a greater level of trust.
• Complement the dealership distribution model by providing broader consumer
coverage, particularly in new or expanding markets.
Most importantly, we found that a Virtual Adviser program has the potential to drive an
enhanced prospect funnel with improved conversion rates.
3 “Before the Door,” Car Internet Research Program (CIRP) and Capgemini, 2009
Cars Online 09/10 16

18. Online Buying: ‘No Hassles,
No Negotiations’
Consumers want a cheaper, faster, easier way to buy cars.
Their answer: the Internet.
“In 10 years, I expect buying a car online cars and parts/accessories, a trend we Western Europe and Russia, the
will be more like buying a replacement began tracking in our Cars Online results were consistent with last year.
mirror on eBay. Choose which one you research two years ago after not
want, pay for it and have it shipped to having focused on it for a number of Consumers are more likely to want to
your front door. No hassles and no years. This year, we explored the topic buy a new rather than a used car over
salesman negotiations.” – U.S. consumer more deeply. the Internet. This is no doubt due to
the fact that new cars are presumed to
“It will be possible to order a car and all Nearly 40% of consumers said they be of a high quality and in good working
the necessary features online – pay, get a would buy a vehicle online (the condition. Consumers are less willing
loan, insure and arrange a pick-up complete end-to-end transaction) if to buy a used car sight unseen.
location (delivery to home or a sales that capability existed. This was down
center). All this without leaving your a few percentage points from last year, Why Buy Online?
house.” – Russian consumer reflecting a rationalization in the While price discount is the leading
developing markets. Brazil, India and reason consumers are interested in
There is no question that consumers China all experienced a drop in the buying a car over the Internet, more
expect to buy their vehicles over the number of respondents saying they than one-quarter said they wanted to
Internet in 10 years’ time. But many were likely to buy a vehicle online, avoid interaction or price negotiation
are not willing to wait that long. although the rates are still far higher with the dealer in person. Consumers
than those in the mature markets. The also expect an online transaction to be
Consumers today have demonstrated number increased to 21% in the U.S., easier and faster.
a clear interest in online buying of from 17% the previous year. And in
In India and China, respondents were
particularly inclined to prefer the
Likelihood to Purchase Vehicle Over the Internet (% consumers saying) Internet in order to avoid interacting
with the dealer. In those markets, a
100%
12 14 8 price discount was a secondary reason
for buying a car online.
17
80%
25 27 It is important to point out that while
many consumers dislike the price
5 (Very likely)
25 negotiation that typically goes on
60% 4
inside the dealership, others actually
23 3
21 enjoy bargaining over price and say
2
that the inability to negotiate price
40% 22 1 (Not at all likely) would be a barrier to buying online.
18 17
This dichotomy in negotiation
20% preferences was apparent in earlier
28
22 21 research published by the Car Internet
Research Program (CIRP) and
0% Capgemini.4 In that study, we found
Total Consumers Consumers
intending to
that the process of negotiating the
intending to
acquire acquire purchase or lease of a vehicle arouses
NEW vehicle USED vehicle strong emotions and corresponding
Source: Capgemini reactions. Different consumers adopt
4 “‘Am I Being Taken?’ Inside the Dealership: The Impact of Consumer Negotiation Preferences and Strategy,” Car Internet Research Program (CIRP) and Capgemini, 2008
17

19. Automotive the way we see it
“ I would like to buy a car
totally on the Internet and
have it delivered to my
Primary Reason to Purchase Vehicle Over the Internet (% consumers saying) home. Perhaps there
would be only one
Price discount 36 dealership in town with
Do not want to one of each model for test
interact/negotiate price 28
in person with dealer drives and to look over.
Ease and speed 22 Then you would go home
of transaction
Ability to purchase
and order over the Internet
vehicle that is not 8 the car you want with the
available locally
options you want.
”
Do not want to be
talked into buying something
6
I do not want
U.S. consumer
0% 10% 20% 30% 40%
Source: Capgemini
different types of negotiation strategies; For example, a car could easily be
in some cases they are more opaque brought to a consumer’s home for a
and in others they are fairly transparent. test drive. Some consumers even
suggested using virtual reality tools to
Transparent shoppers are at ease with make online test drives possible.
the salesperson and are open about
their interest in the vehicle as well as Some differences by market were
why they like it. They are more likely apparent, with test drives being more
to enjoy the negotiation process. of a concern in mature markets and
Opaque consumers, on the other the lack of information about a
hand, are less confident in their ability vehicle’s history a greater concern in
to get a good price, and so do not developing regions.
enjoy the bargaining process. This
second group of car buyers represents Many respondents do not rule out a
a potential market for online vehicle role for the dealer in online vehicle
buying. buying. Close to one-third said price
negotiation would be the primary role
Barriers to Online Buying of the dealership, while 28% pointed
Again this year, we asked respondents to test drives and 17% said providing
to identify the barriers they see to service packages. Additional functions
online vehicle buying. And again, we included serving as a location to pick
were struck by the fact that the up a vehicle after buying it online, as
primary hurdles – such as the well as a place to view the vehicle in
inability to test drive a vehicle, see person and to acquire additional
photos/video of the vehicle or receive information before buying online.
full product and price information –
are clearly surmountable.
Cars Online 09/10 18

20. “ It will soon be possible to order everything online,
starting from the build and color and finishing with
accessories. Russian consumer
”
Barriers to Online Buying (% consumers saying)
Price discounts and dissatisfaction
with the dealer/retailer process are the
key reasons consumers want to buy
Inability to test drive vehicle
before making final decision parts and accessories over the web.
Inability to see photos/video Overall, 35% of consumers expect a
of the vehicle inside and out
Inability to receive full price discount when they buy vehicle
product/price information
parts and accessories online; 30%
Inability to negotiate pricing online
point to ease and speed of transaction
Inability to receive a report
detailing the vehicle’s history as the key reason; 21% look for wider
Inability to contact and interact with
a representative online or by phone
selection and availability; and 10% do
Inability to match a vehicle not want to interact in person with a
to my exact specifications dealer or parts retailer.
Inability to conduct final negotiation online
Inability to negotiate trade-in Mature Markets These reasons are fairly consistent
of old vehicle online
Inability to apply for financing and Developing Markets across markets, with a few exceptions.
conduct financing approval process online
Inability to have vehicle
In Russia, the wider selection and
delivered to your home availability of parts and accessories
Other resonated most strongly with car
0% 10% 20% 30% 40% 50% 60% buyers. In India, ease and speed of
transaction was somewhat more
Source: Capgemini
Note: Multiple responses allowed important than price discount. And in
China, 31% of respondents said they
did not want to interact in person
However, many consumers do not A similar sentiment was echoed by a with a dealer or parts retailer.
expect to see dealer lots full of cars if respondent from the U.S., who said,
online buying takes off. “There will be “Talking one-on-one with a real person to Practical Items Lead the List
only test cars,” said a U.S. respondent. finalize a purchase is invaluable. I doubt Overall, respondents want to buy
“Cars will be made to your specifications, that I would ever purchase a vehicle from practical items such as seat covers,
thus eliminating dealer inventory on the the Internet, no matter how easy it is to floor mats and tires online rather than
sales floor.” research makes, models, pricing, extras.” custom accessories like spoilers,
specialty headlights/taillights and
Some respondents see a grim future Significant Interest in Buying custom wheels. There were some
for dealers. “Dealerships will become Parts/Accessories Online notable market differences, however.
history,” said a consumer in India. This year we took a closer look at the
“Everyone will buy their cars online and business of selling parts and accessories For example, in-car entertainment
have them delivered at their doorsteps.” over the Internet, an area of considerable devices and systems lead the list in
interest to consumers. Half of Russia, named by about half of
Not everyone is sold on online respondents said they would like to respondents, compared with an
buying, however. “I hope that we’ll still buy parts and accessories online. As average of 34%. Consumers in India
have our local dealers because of their with online vehicle buying, the trend were also more likely than average to
proximity and their knowledge of their is growing in the U.S., is consistent in consider buying in-car entertainment
customers,” said a consumer from Western Europe and Russia, and is systems over the web, while these
France. “I think that most of the research down somewhat in the other items were at the bottom of the list for
will be done on the Internet but finalizing developing markets. Chinese respondents.
the deal will be face-to-face with the
salesman. It’s too important a purchase
for everything to be done virtually.”
19

21. Automotive the way we see it
Customer Interaction: Loyalty and
Satisfaction Rates Improve
In a year full of bad news for the automotive industry, our research found bright
spots in brand and dealer loyalty and customer satisfaction with the vehicle
buying process.
Automotive companies could use a bit of consumers are likely to return to
of good news and our research the same dealer, and where, in fact,
provides it in the form of improved one-quarter of consumers would
customer loyalty. This year we saw a actively search out a new dealer for
spike in brand loyalty in most their next vehicle purchase.
countries, perhaps a reflection of the
ever-increasing reliability of most Building Loyalty Through
vehicles on the market today as well Communication
as improved lead management and So what can dealers and manufacturers
customer communication programs. do to maintain customer loyalty?
Communication is key. Consumers
Overall, 68% of respondents said they show a strong receptivity to a wide
were likely to purchase the same range of communications, such as
make/brand as their current vehicle, brochures about the vehicle
up from 61% last year. Improvements bought/leased, service reminders,
were seen in the mature markets as post-test drive surveys, welcome
well as most of the developing packs, satisfaction surveys and
countries, with the exception of India. personalized repurchase offers.
Similarly, dealer loyalty also rose, However, those items that are
with 63% of consumers saying they intrinsically most useful, such as
were likely to purchase from the service reminders and personalized
same dealer where they bought their repurchase offers near the end of a
current car, up from 59% the year lease or warranty period, are more
before. This may be due to the likely to influence future buying
contraction in the dealer business as decisions. For example, 30% of
well as improvements in quality and consumers said these two items would
service resulting from investments in make them more likely to buy their
customer lifecycle management next vehicle from the same dealer or
systems. manufacturer, the highest rating for
any form of communication.
Some variances by market are Personalized repurchase offers are
apparent. The U.S., Western Europe particularly influential in the U.S.,
and Russia all registered small Western Europe and Russia, but less
increases in dealer loyalty, while so in the other developing markets.
China saw a bigger jump. However,
both Brazil and India recorded small Some consumers suggested that
declines, which again may be a sign of manufacturers go even further in their
convergence beginning to occur in communication initiatives and involve
some of the developing markets. consumers in the development of new
vehicles. “It would be good to use online
Despite this year’s gains, dealer loyalty surveys to get views and guidance from
still remains lower than brand loyalty, existing users before manufacturing new
indicating that consumers are more vehicles,” said a respondent from India.
likely to trade dealers than trade
brands. This is particularly true in
mature markets, where less than half
Cars Online 09/10 20