One of the most notable impacts of the COVID-19 pandemic on the consumer front was revealed in an exclusive study from Deloitte Canada, which found that 39% of respondents have altered their timeline for purchasing their next vehicle.
The information was pulled from the company’s new 2020 Ontario Automotive Consumer Study and presented by Ryan Robinson, Automotive Research Leader at Deloitte as part of the Trillium Automobile Dealers Association (TADA)’s virtual Auto Dealers Innovation Series & Expo (ADIS) on September 24.
“What conventional wisdom might dictate is that not all of that 39% of people are necessarily holding off their purchases,” said Robinson. “In fact we see about 18% of the 39% that are actually planning on acquiring a vehicle sooner than they originally planned. And that is partly down to the perceived level of incentives in the marketplace.”
There are also 21% of consumers that plan to purchase a vehicle later than previously intended. Asked about the significance of this number during a Q&A session with Canadian auto dealer’s editor Todd Phillips, Robinson said the potential impact of a second wave of the pandemic should not be understated. The more businesses are pushed into a position where they will have to close their doors again, the more consumers will pull back — and that will be negative for vehicle demand moving forward.
However, it is also worth noting that 61 per cent of respondents overall do not plan to change their car-buying timeline. Broken down by age group, 77% of consumers aged 55 and older did not alter their timeline, followed by 61% in the 35-54 age group, and 46% in the 18-34 group.
Robinson said the 18-34 group are less inclined to indicate that they have not altered their plans, but are more inclined to acquire a vehicle sooner than their other age counterparts in the older categories (31% aged 18-34 versus 16% for the 35-54 group, and 6% for the 55-plus group).
“There appears to be some support for (vehicle) demand overall around the edges, as being created by people who are looking to vehicle ownership as a way to supplement their core transportation requirements that are being satisfied by shared transportation modes,” said Robinson.
According to the study, 56% of young people (18-34) are somewhat/very interested in acquiring a vehicle as a way to maintain social distancing while travelling, followed by 38% of age group 35-54 and 23% of age group 55-plus.
Based on the data, there is a potential for a greater influx of young buyers to purchase vehicles sooner rather than later, but there is also a downside to this: the number of people looking to avoid mass transit leans towards the younger population, just as, in the event of a renewed atmosphere of lockdowns, rising unemployment numbers also lean towards the younger generation.
“We think that may be something to consider — that there may be people entering the market sooner rather than later,” said Robinson. “We do expect that demand to moderate somewhat over time and transform more into a longer term recovery mode, as we see the potential for some significant affordability issues creeping into the system.”
A significant amount of people plan to drive less too (43%) due to the pandemic, which may be due to 41% of people planning to work from home at least a couple of days a week, moving forward.
One of the most surprising findings in the study, according to Robinson, is that 78% of people still want to buy their next vehicle in the dealership in-person. Only 22% want a fully virtual or partial virtual experience. And 84% say they still want to see the vehicle before they buy it.
Furthermore, 72% want to test drive it prior to purchase, 49% would prefer to negotiate the price in-person and do not feel comfortable making the full purchase online, and 45% would like to have their questions answered by a real person.
Overall, the study offers a look into what consumers expect when it comes to their car-buying needs and what dealers can expect from them during this pandemic. Robinson advises dealers to “look more closely at what the new normal and the future will look like.”
For those who attended the event, contact TADA to get a copy of the full presentation and the research findings.
