Consumers Ready For Hybrids, According To New Study.(Brief Article)

Hybrid vehicles are getting the attention of the global consumer, according to a new research study. Consumers are ready to purchase hybrid engine vehicles, and are willing to pay up to a 10 percent price premium for them in return for improved fuel economy and reduced air and noise pollution. At the same time, they expect the technology to be transparent with no compromises on the comfort, convenience and performance levels that they enjoy with conventional vehicles.

These findings and more are detailed in "Automotive hybrids: A desired vehicle for the right price," a global consumer study from Roland Berger Strategy Consultants. More 3,600 consumers in North America, Europe and Japan participated in this comprehensive study that surveyed consumer attitudes toward hybrid vehicles.

According to Michael Heidingsfelder, Partner of Roland Berger's North American operations and leader of the U.S. automotive practice, the study has major implications for the industry, specifically for automakers and suppliers. First and foremost, automakers need to develop hybrid vehicles that offer the same characteristics that drivers experience with their current vehicles. "Consumers are not prepared to sacrifice comfort, convenience and performance under any circumstances," he said.

"Furthermore, there is a limit to what consumers will pay for hybrid vehicles, even for vehicles that meet their expectations."

Mahesh Lunani, senior project manager in Roland Berger's Detroit office and co-author of "Automotive Hybrids," said the study led to several meaningful findings about how consumers perceive hybrid vehicles:

1. Nearly 90 percent of consumers surveyed showed an interest in hybrids, with North American consumers expressing the strongest interest.

2. More than 75 percent of all consumers said they would consider replacing their current vehicle with a hybrid IF the price premium was reasonable.

3. The vast majority of respondents identified 10 percent as the limit they would pay for a premium on a hybrid vehicle.

4. North American consumers noted that satisfaction with their current car brand would be one of the main criteria for replacing their existing vehicle with a hybrid vehicle.

5. More than 50 percent of European drivers felt that hybrid technology is not yet well-developed, while North American and Japanese consumers were more optimistic about the maturity of the technology.

6. The vast majority of consumers recognized Toyota and Honda as leaders in hybrid technology and said they would consider purchasing vehicles from these companies.

Lunani noted there is a success formula that automakers must utilize in hybrid vehicle development, which includes an optimal combination of vehicle design, performance, pricing and supply chain strategies. Automakers should judiciously select the appropriate technologies that they will develop in-house and those that they outsource, in order to balance often conflicting objectives of speed-to-market and design ownership, he added.

"Those who are unable to follow this formula or who implement it poorly will miss the opportunity to assume a leadership position in an exciting growth market, which is rare in this industry," Lunani said. Heidingsfelder noted suppliers have a great opportunity as well.

"Consumer optimism about hybrid vehicles provides new growth opportunities for suppliers," he said. "Suppliers must be fully aware of global automakers' outsourcing patterns. Those suppliers that leverage their existing competencies and customer relationships to develop solutions to eliminate bottlenecks in technology and manufacturing will emerge as market leaders."

Roland Berger is a strategy consultant firm with 31 offices in 21 countries with more than 1500 consultants worldwide.

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