Corona Crisis: Capgemini Study Sees Opportunities and Risks for the Automotive Industry

The consulting and IT services company Capgemini sees great challenges ahead for the automotive industry, because: According to the Capgemini study, 44 percent of people worldwide intend to use their cars more frequently due to the COVID-19 pandemic, while using public transport or shared mobility services less often. The main reason for this is hygiene, as around 75 percent of respondents worldwide cited better control over hygiene as a key reason for purchasing a car. Germany is slightly below the average with 64 percent.

Purchasing a car is also becoming more attractive for younger people

According to the study, buying a car is also becoming more attractive for younger consumers under 35. This target group has recently preferred sharing models or public transport much more strongly. However, the Capgemini study now shows that 44 percent are once again considering owning a car. Simple financing and flexible payment models are important in this regard.

Sebastian Tschödrich, Vice President in the Automotive sector at Capgemini Invent, explains:

"Health and safety concerns will fundamentally change consumer behavior in the automotive industry even after the pandemic subsides. On the one hand, consumers' desire to use public transportation and shared mobility services less will lead to greater importance of individual mobility and make owning a car more attractive. On the other hand, the economic impacts of the crisis and the increasing acceptance of home office models could dampen demand."

Thus, the industry might still get off lightly in 2020, as 35 percent of the surveyed consumers intend to buy a car this year (Germany, known as a car country, is slightly more reserved at around 33 percent). However, 16 percent are still undecided. These consumers could be enticed with extensive service offers: An additional survey among German consumers revealed that around 89 percent of customers who are currently hesitating could be persuaded to purchase a car with attractive offers or a convincing "customer experience."

Which brings us to the topic of "online," whose importance continues to rise: by now, many potential customers want to handle the entire purchase, including consultation, via online channels. Currently, 52 percent of global prospective buyers choose online channels for gathering information – before the COVID-19 crisis, according to Capgemini, it was 44 percent. Additionally, 46 percent of respondents worldwide want to minimize visits to dealerships – in this regard, Germany, with 41 percent, again falls slightly below the average.

In Germany, Capgemini now sees a potential of 25 percent of all surveyed consumers who would purchase vehicles entirely online. Interestingly, back in 2013, Capgemini published a study indicating that 30 percent of respondents could theoretically imagine buying a car online.

What does that mean?

According to the latest Capgemini study, privately owned cars are gaining acceptance again due to better controllable hygiene. The clear losers would be sharing services and public transportation. However, a problem is the reduced travel activity in general, which could render many trips unnecessary. And if one does buy a car, they prefer to gather information digitally. However, such large amounts of money involved for many households and fleets are still reluctantly handled entirely without in-person trade and interaction. In this respect, little has changed in recent years.