Automotive trends and linked financial options are the subjects of market research called “Global Trends in Automotive & Financial Services” which looks at how consumers want contemporary mobility service providers to manage financial services and purchasing methods, as well as how much financial services affect auto purchases.
The market research firm Kantar launched it in 2022 on behalf of Mercedes-Benz Mobility. A total of 2,605 people from Germany, the United States, and China participated in an online survey with 36 closed questions and 2 open questions during January and February of 2022.
Table of Contents
The switch to an electric car
In Germany, 80% of drivers of luxury cars say they’ll convert to electric cars in the next five years. With a 66 percent loan rate, most of them would do so as opposed to outright purchases. This is the outcome of a recent Kantar poll conducted for Mercedes-Benz Mobility in China, Germany, and the USA among more than 2,500 drivers who drive different brands of vehicles.
On the path to e-mobility, financial and mobility service providers are essential. The manufacturers’ financial service providers are the most chosen partners for transitioning to an electric vehicle in all nations (total: 73 percent; GER: 81 percent; USA: 74 percent, CN: 64 percent).
Additionally, digital products are becoming more and more popular. According to the majority of respondents, online communication with the provider is becoming just as crucial as real contact. China now has the most accessible in-car payment market (46 percent ). Potential customers see this service as a crucial differentiator for one supplier over the competition.
The survey found that among all financing methods, finance is still favored (46 percent), followed by auto leasing and automobile subscriptions. Additionally, 45 percent of respondents claim that consumers’ decisions on whether to stick with a brand are influenced by the financial service providers (or “captives”) used by manufacturers.
“We perceive a clear push towards e-mobility and a desire for more financial flexibility among car drivers. The study thus confirms our strategy of paving the way to green mobility with flexible financing options. The digital sales channel is playing an increasingly important role in this, but personal advice remains relevant. For years, we have been driving the digitalisation of our offerings and the integration of digital and physical customer touchpoints at Mercedes-Benz Mobility to provide our customers with a seamless experience and the highest level of service across all sales channels,” said Franz Reiner, Chairman of the Board of Management of Mercedes-Benz Mobility AG.
“The study shows that financial service providers play a key role in the choice of a vehicle brand. For the customer, car manufacturers and their financial service providers are strongly intertwined. A key success factor is an integrated customer experience. Mercedes-Benz Mobility works intensively with the vehicle brand to create such exceptional customer experiences,” added Peter Zieringer, Chief Customer Officer and Member of the Board of Management of Mercedes-Benz Mobility AG responsible for Sales & Marketing.
EV financing preferred, especially in the US and Germany
A sizable majority of respondents in each of the three marketplaces can see themselves using an electric vehicle over the next five years. China outperforms the rest of the world with a 96 percent rating. However, the trend clearly favors electric cars in both the USA (68%) and Germany (80%).
Additionally, there was significant interest in car financing options. Among those interested in electric automobiles, 66 percent of German and 65 percent of American research participants said they would buy the car using a financial instrument (financing, leasing, or car subscription). With 44 percent in Germany and 45 percent in the USA, direct buying is far less common.
Funding is the most widely used kind of car financing across all sectors (GER: 48 percent; USA: 60 percent, CN: 58 percent). In every nation, the manufacturer’s financial service provider is the first option when it comes to financing and leasing electric vehicles. Following Germany with 81 percent of the vote, the USA (74%) and China (74%) choose the so-called “captives” (64 percent ).
Online and in-car purchasing is among the fastest-growing automotive trends
Digital offerings for auto loans are becoming more significant. Digital touchpoints, or online contact with the supplier throughout the purchase process, are often seen by respondents as being similarly significant to in-person interactions with dealers in all nations (GER: 55 percent; USA: 52 percent, CN: 76 percent).
In addition, the willingness to complete a financing, leasing, or automobile subscription online differs from that of an online direct purchase. A personal interaction may, however, encourage more people to sign a contract online. For instance, around a third (38%) of respondents in Germany said they would never sign a finance or leasing arrangement online without getting personal guidance.
However, over half (47%) of these people would be open to signing an online contract with the help of a personal adviser. In contrast, just 26% of Chinese consumers would reject a financing and leasing agreement that could only be signed online. However, 67 percent of these respondents said they would be open to finalizing the deal online with a personal adviser.
Respondents are receptive to digital payments from the automobile, especially in China (in-car payment). 46 percent of research participants said they would definitely or probably utilize in-car payments in China. There are still worries about data security and data privacy in Germany (27%) and the USA (27%).
However, they may be decreased by increasing public knowledge of the system’s security. Potential customers consider in-car payment to be a manufacturer’s top competitive advantage over rival suppliers in all nations (GER: 55 percent, USA: 68 percent, CN: 76 percent). Participants in the survey believe that the biggest benefit of in-car payment is the huge increase in convenience and comfort of daily living.
Financing is popular
46 percent of respondents said they would choose to finance their next automobile. Subscription (32 percent) and leasing come next (26 percent). Users who had financed or leased their current automobile are more likely to pick financing alternatives for their subsequent vehicles. German and American direct buyers often buy their next automobile in the same way.
The readiness to transfer from a vehicle that was directly bought to financing or a car subscription is especially important in China, where direct buyers are demonstrating more openness to various financing solutions.
As a result, for their next vehicle, 48 percent and 51 percent, respectively, of Chinese respondents said they would very likely or even certainly convert to financing or a subscription model. This willingness is now just 18 percent (for finance) and 21% (for auto subscriptions) in Germany.
In Germany (46 percent) and the USA (43 percent), this is one of the primary justifications for financing an automobile: “At the conclusion of the contract period, the car will be mine”. In many nations, but notably in China and the USA, one’s personal financial resources are important.
In the USA, this includes the chance to acquire an automobile that would otherwise be prohibitively costly (52 percent ). In China, it is avoiding a large upfront payment while making an outright purchase (49 percent). The respondents claim that leasing, in particular, enables more frequent use of a new vehicle (GER: 40 percent, USA: 46 percent, CN: 26 percent).
Furthermore, one of the primary arguments put up is that age-related repairs are simpler to prevent (GER: 37 percent, USA: 49 percent, CN: 13 percent). Study participants who merely want to use the car but do not own it find leasing appealing, especially in Germany and China (GER: 37 percent, CN: 26 percent). Financial factors often take a back seat.
Carmakers need to have a strong financial service provider
Chinese respondents put even more significance on receiving all vehicle-related services from a single source by a single provider, while German and American respondents base their choice of a financial service provider specifically on the terms and conditions. In Germany, the United States, and China, picking a financial service provider is influenced by the firm’s reputation for reliability.
Thus, the financial service providers for the manufacturers have a big impact on brand loyalty: for almost half of the survey participants (45%), the financial service providers’ services are very or very important when deciding whether to use a brand again. In all three areas, according to the respondents, Mercedes-Benz Mobility is considered a reliable, creative, and client-focused finance partner.
In contrast to direct purchases, respondents in all three nations are more likely to choose more optional features when financing or leasing a vehicle (62 percent), as well as a new automobile rather than a used one. Financial service providers also help manufacturers benefit economically (56 percent).
Furthermore, financing or leasing agreements result in the purchase of other services, especially in China (GER: 44 percent, USA: 45 percent, CN: 66 percent). As in the USA, extended warranties and auto insurance are both widely used in China and Germany.