Digital Auto Report: Corona boosts car traffic

The outbreak of COVID-19 has had a significant impact on the mobility behavior of Germans, leading to substantial increases in individual transportation. This is the central finding of the first part of the “Digital Auto Report 2020” by Strategy&, a subsidiary of the consulting firm PwC. Nearly a third of respondents are using their own cars more frequently for commuting, business appointments, or leisure activities than before. The acquisition of a car remains popular: while 24 percent planned to buy a new car in 2020/21 before the Corona crisis, this share has only dropped by three percentage points. Gasoline-powered cars remain the most popular, whereas diesel vehicles are the least preferred choice for most. The trend towards smart mobility, on the other hand, is being somewhat dampened by COVID-19 and the preference for individual mobility.

New Mobility: Sharing and Pooling in Decline

77 percent of Germans report using carsharing and ride-hailing services less frequently. The current major incentive to attract customers to sharing services is to highlight hygiene measures such as vehicle cleaning and disinfection by the provider.

“The Corona crisis has increased the public’s interest in digital offerings: Nearly 60 percent of German consumers want connected car services. For a corresponding user experience with the networking and compatibility of different services, the software development and data analytics capabilities of automotive manufacturers are therefore crucial,” comments Jonas Seyfferth, co-author of the study and Director at Strategy& Germany.

Of the Germans interested in connected car services, 31 percent find a surcharge justified. The willingness to pay for a complete package of connected services averages up to 20 euros per month. With the popularity of digital offerings, the importance of the “CASE” dimension (Connected Car Services, Autonomous Driving, Smart Mobility, and Electrification) for business models is also increasing for the automotive industry.

Driven by regulatory requirements, the proportion of new vehicles with basic connectivity is expected to reach 86 percent by the end of the year. Full connectivity is expected for half of all vehicles in Europe by 2025. German consumers place the highest value on complementary safety applications (80%) in connected car services, but navigation services with information about the surrounding area (75%) are also popular.

Autonomous Driving Taking Longer Than Expected

The path to autonomous driving is taking longer than originally anticipated, with incremental improvements in hardware, software, and infrastructure. In Europe, only 14 percent of new vehicles are expected to feature Level 4/Level 5 technology for automated driving by 2035. Currently, 64 percent of German consumers are interested in autonomous driving, and about one-third of them would pay a premium for purchase, leasing, or subscription.

“If German manufacturers want to maintain their claim to technological leadership in autonomous driving as well, they should advance their developments in this area through cooperation for hardware components, software, and interfaces,” comments Jörg Krings, co-author of the study and Partner at Strategy& Germany.

The publication of the second and third parts of the “Digital Auto Report” on market forecasts or financial developments and organizational requirements is expected to follow in the coming weeks. For the consumer perspective, 1,000 consumers each in Germany, the USA, and China were surveyed online in July and August 2020 in a representative manner.