Research firm Deloitte recently released a study that pinpoints Generation Y consumers as the biggest growth market for hybrid car producers. This study focused on 4,500 consumers in the United States spread among Generation Y (19-31) consumers, Generation X consumers and baby boomers. Deloitte also canvassed 300 Generation Y consumers in Europe and 250 in China. The conclusion of Deloitte Vice Chairman Craig Giffi is that this generation of consumers is very interested in hybrid vehicles with connectivity options. This conclusion should be noted by every automaker because Generation Y represents about 80 million consumers who are motivated to purchase next-generation vehicles.
Generation Y consumers purchased 25% of automobiles in the U.S. in 2011 and could purchase up to 40% of automobiles in the next decade. A general preference (59%) among Generation Y drivers for green vehicles includes an overwhelming desire for hybrid vehicles. Deloitte determined that 57% of these consumers prefer hybrids, 37% traditional vehicles and 2% all-electric vehicles. This conclusion shows that Generation Y wants to keep one foot in the traditional auto market while venturing a bit into the future. Giffi stated that 49% of Generation Y drivers would pay $300 for each mile-per-gallon gain in an automobile. This increment aligns closely with $350 mile-per-gallon gain that currently exists in the hybrid vehicle market.
Deloitte found Generation Y respondents willing to pay premium prices for connectivity options rather than all-electric drive systems. The typical participant stated a willingness to spend more than $3,000 for connectivity equipment offered by automakers. This desire for connectivity starts with touch screen interfaces desired by 73% of respondents. Generation Y drivers could use these interfaces to access maps, directions, vehicle performance statistics and entertainment. Automakers could benefit from software updates and aftermarket purchases with 77% of respondents willing to spend money to upgrade basic interfaces.
The report issued at the Shifting Gears conference in Detroit affirms existing progress made by automakers. American, Japanese and European automakers have focused on hybrid vehicles as gateway models until electric and hydrogen vehicles are available. These models are also designed to balance traditional views of transportation with the desire to push the technological envelope. Generation Y plays exactly into this balance, which means that hybrid vehicles should persist for the next two decades while alt-fuel vehicle development is stunted. The tendency toward hybrids improves on the previous generation’s fuel consumption and emissions but holds back demand for plug-ins and alt-fuel models.