1. The long and short
for the automotive
industry
Shifting from transactional
to customer-centric

2. Page 2 Getting under the hood with automotive market research
June 2015, London
Agenda
Global automotive market overview
Mobility, connectivity and changing customer
needs
Paradigm shift in automotive retail
Considerations for the market research industry

3. Page 3 Getting under the hood with automotive market research
June 2015, London
Global automotive market overview
Key factors signalling the urgency to change faster
• Industry likely to witness more change in the next 5 years than in the last 15 years
• Retail experience will need to transform
• Increase in disruptors from outside the auto ecosystem
• Stakeholders (shareholders, regulators) wield significant influence, demanding performance
and transparency
• China, US and Western Europe are likely to drive volumes for the industry over the medium
term, however double digit sales growth likely only in select emerging markets
• Global automakers see the need to adjust their business models to the new normal in China
based on moderate sales growth over the next decade
• Our analysis of the automotive C-suite’s agenda indicates majority of the organisations lack
preparedness, execution and resource alignment to enable faster change

4. Page 4 Getting under the hood with automotive market research
June 2015, London
Agenda
Global automotive market overview
Mobility, connectivity and changing customer
needs
Paradigm shift in automotive retail
Considerations for the market research industry

5. Page 5 Getting under the hood with automotive market research
June 2015, London
Shift in consumer preferences
Shift in consumers’ mobility preferences
Forcing a change in way we envision mobility
Increasing
vehicle
ownership
and running
costs
Growing
internet and
smartphone
penetration
with decline
in prices and
easy
accessibility
Government
and
automakers
focus on
enhanced
safety, fuel
efficiency and
driving
assistance
Improving
quality and
availability of
both public
and private
shared
transport
options
Environment-
related
régulations
and concerns
– pollution,
climate
change etc.
Key drivers of
change
Vehicle
ownership
Vehicle access (car
sharing, leasing)
Ownership pride
and social
status
Optimization of
purchase and
running cost
Basic
connectivity
Need to stay
connected –
always and
everywhere
Averse to high costs
of safety and
alternate powertrain
vehicles
Open to trying the
alternative vehicles
and accessing best-in-
class safety features
From… …to

6. Page 6 Getting under the hood with automotive market research
June 2015, London
9-13
cars replaced on the road
by each shared car1
4m
drivers expected to belong
to car-sharing services
Globally in 2020 (from
<1m in 2013) 2
$6.2b
expected Global revenue
from car-sharing market
in 2020 (from <$1b in
2013)3
Asset base
Type of
customer
Crowd-sourced
Company-
owned
Individual Business
Source: 1Transportation Sustainability Research Center at UC Berkeley; 2Automotive-IQ; 3Navigant Research; Note: *car sharing companies
Rising trend of collaborative consumption is driving the demand for car-sharing services, to combat the increasing
congestion and rising cost of ownership
Market indicators
Impact Considerations
OEMs
Dealers
Move from ‘ownership’
to ‘access’, to cause
decline in sales
Rising bargaining power
of CS*, as they expand
fleet
►New type of players to pose as potential threat as
they look to build relationships with customers
‘Product-centric’
to ‘solutions-
oriented’
Expand
demographic by
positioning CS*
as customers
Enable
connectivity to
make vehicles
share-ready
Tie-up with OEMs
to provide car-
sharing services
Leverage customer interactions
to gauge the kind of mobility
solutions needed
Sharing economy driving the demand for car-sharing
OEMs and dealers to re-consider business strategies amidst an evolving business
environment

7. Page 7 EY presentation at MOVE 2014 summit
Connectivity to play a key role in enabling mobility integration
Automotive industry is still looking for viable business models
Connectivity and car-web integration offer the possibility to redesign how vehicles interact with cities and, as such,
have the ability to transform urban mobility
Disruptive innovation to enable profitable business strategies
Vehicle to-
grid benefits
“It’s about connecting the
car to the house …”
“Price of the vehicle to go
up, but the cost of
mobility will go down
significantly”
“Most of the telematics
value resides in the
services like
smartphones”

8. Page 8 Getting under the hood with automotive market research
June 2015, London
Automotive C-suite’s value proposition agenda
Meeting connectivity, efficiency expectations and overhauling digital experience
critical to enhance value proposition
31%
feel well-prepared
B. In-vehicle features and
functions
78%
expect demand
for in-vehicle
features/functions
supports their
value proposition
Demand for greater connectivity
/ infotainment, smartphone
compatibility
Demand for fuel efficiency, lower
emissions
Features driven by regulations
(Emission, fuel consumption,
safety)
Key driving factors
14%
feel well-prepared
Only
C. Digital experience and
transactions
66%
expect demand for
digital experience
supports their
value proposition
OnlyKey driving factors
Role of digital/online resources in
influencing customer choices
Convergence of digital and retail
vehicle buying experience
41%
feel well-prepared
6%
feel well-prepared
Only
50%
expect financing
and pricing
supports their
value proposition
D. Financing, pricing,
affordability
Key driving factors
Incentives and vehicle pricing
Bundled service offering (finance,
insurance, service and fleet
management)
Innovative financing and retail
model for electric and hybrid
vehicles
84%
expect demand for
mobility services
and vehicle types
supports their
value proposition
A. Demand evolution —
mobility and vehicle types
Key driving factors
Demand for used cars
Demand for corporate car
sharing programs and fleet
management solutions
Demand for multi-modal urban
transport integration

9. Page 9 Getting under the hood with automotive market research
June 2015, London
Agenda
Global automotive market overview
Mobility, connectivity and changing customer
needs
Paradigm shift in automotive retail
Considerations for the market research industry

10. Page 10 Getting under the hood with automotive market research
June 2015, London
Automotive retail in the future
Evolving from bricks-and-mortar to an omni-channel strategy
Shifting from product-driven to a customer-centric approach
Offering mobility services based value propositions instead of
ownership
Providing seamless brand experience across channels
Consumers will no longer have a need for a traditional dealership

11. Page 11 Getting under the hood with automotive market research
June 2015, London
The paradigm shift in auto retailing over the next decade will be
based on five key pillars
Focus on
customer-
centricity
Emergence of
new value
propositions
Improving the
digital
experience
New channels
to reach
consumers
Develop a
seamless
customer
experience
across all
channels
2
3
4
1 5

12. Page 12 Getting under the hood with automotive market research
June 2015, London
Agenda
Global automotive market overview
Mobility, connectivity and changing customer
needs
Paradigm shift in automotive retail
Considerations for the market research industry

13. Page 13 EY presentation at MOVE 2014 summit
In the mobility eco-system, the debate is open on who owns the
customer
Telematics solution
providers
…focus on packaging
data and information in a
meaningful way
Energy and power
utility players
…can provide integrated
house and car electricity
packages
Telecom service
providers and
chipmakers
…trying to identify
additional roles to play
beyond the data carrier
Cities
…are competing on best
value proposition for clean
air, finance, investments
and talent
Technologists
Google, Microsoft,
Apple and more..
…are developing the
operating landscape to
guide the customers in
the new ecosystem
E-payment, NFC
technology and
travel information
platforms
…enable real-time
information and one-stop
and contactless payment
systems
Collaboration
Competition
Vehicle
manufacturers and suppliers
Mobility redefines the way
manufacturers are able to interact
with their customers to deliver
services in non-traditional ways

14. Page 14 Getting under the hood with automotive market research
June 2015, London
Key considerations
To build profitable customer relationships, automakers and dealers need to undertake
unprecedented change management in collaboration with other stakeholders in the
automotive ecosystem to:
• Design and deliver differentiated customer
experiences
• Introduce customized mobility solutions and
integrated service packages
• Identify, design and roll out innovative formats of
retail for a well-informed customer
• Craft a holistic digital and social media strategy
• Manage brand experience through multiple touch
points with customers

15. Page 15 Getting under the hood with automotive market research
June 2015, London
Thank you for your attention! Anil Valsan
Lead Analyst
Automotive & Transportation
Ernst & Young
1 More London Place
London SE1 2AF
Phone +44 207 951 6879
Mobile +44 7903 206464
Email avalsan@uk.ey.com

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