Car Ownership: It’s Here to Stay
If you’ve attended a mere handful of automotive tradeshows and conferences over the past few years, you’ve likely heard at least a few industry experts sound the alarm bell regarding industry disruption. These pesky disruptive forces they most often touted were the Ubers, the Lyfts and the millennials of the modern world. You’ve been told that these disruptors, either as an individual entity or as a collective, were after your cake – and they had full intention of devouring it. As those sleek ride sharing services became more readily available, cost-efficient, and, some would argue, the most hassle-free method of transportation, concerns rose in the automotive industry about whether the desire to own a vehicle would remain the same, particularly as younger generations slowly encroached on representing the largest generation in the workforce, thus the group with the most influence and purchasing power.
Additionally, you’ve likely followed the rapid expansion of public transit systems. Trains, buses, light rail and subways continued to grow their service offering, routes, and even lobbied city officials for designated lanes on the road – in certain instances, closures to passenger vehicles of entire roadways – and at face value, one could argue that car ownership was in fact less desirable, particularly for those who live in an urban setting. However, the single largest disruptor, that not even the best and brightest in automotive could foresee, would rapidly change our approach to seemingly everything in life – offering no passes to both ride sharing and public transit.
With the impacts of the COVID-19 pandemic came a 65% drop in ride share usage and 81% less people reporting they will no longer be using public transit services. As a result of the stay-at-home orders enacted by provincial and municipal government officials, coupled with the rollout and enforcement of physical distancing decrees, for precautionary and safety reasons, these results came as expected. You may be wondering, where do we go from here? As restrictions begin to lift, will people go back to their old means of transportation? Or is there a novel opportunity on the horizon for car dealerships Canada-wide? Could those same individuals, who for years had no desire or intent to travel the road towards car ownership, really transition to a first-time buyer?
To bring some clarity to these questions, we conducted a consumer survey, through which we asked autoTRADER.ca shoppers if they will revert to their previous methods of transportation post COVID-19. The overwhelming majority – a whopping 70% – do not plan to use ride share services again and 40% of those who previously relied on public transportation do not plan on continuing to do so. What’s more, respondents shared that car ownership offers them more flexibility (44% agree), allows for more personal space (36% agree), and puts them in the driver’s seat – no pun intended – of maintaining the cleanliness and hygiene of their surroundings (33% agree).
We’re seeing the results of what consumers shared with us come to life on the autoTRADER.ca as well. Each week, since the onset of the pandemic, we have seen a lift in unique visitors on the marketplace. Our latest autoTRADER.ca traffic and engagement report from the week of May 18th, 2020, showed a 20.4% increase in unique visitors year-over-year (YoY). What further compounds this momentous shift, is that these consumers are not just browsing; they’re submitting leads, and, doing so in droves. A total of 110,000 leads were captured on autoTRADER.ca over this one-week period, which represents a 15.5% YoY increase. This tells us there is high intent among car shoppers, dispelling the belief that those with too much time on their hands are skewing the data being reported.
In contradiction to past rumors and ramblings surrounding the desirability of car ownership, consumer attitudes and behaviours are indicating that vehicle ownership, be it through purchase, finance or lease, is within the consideration set – and a serious one, at that – when the time comes to head back to work. More specifically, 14% of people who do not currently own a vehicle, now plan on purchasing one as a direct result of COVID-19.
At the beginning of pandemic, the state of the automotive industry was in flux, with uncertainty, discomfort, perhaps even fear growing by the day. We were all posed with new challenges and methods of operating that were uncharted. However, based on the trends we’ve observed when connecting with consumers and their shopping behaviour on the autoTRADER.ca marketplace, we believe it’s safe to say that car ownership isn’t going anywhere; more so, the need, not just desire, to own a vehicle is certainly increasing.
Source: autoTRADER.ca COVID-19 Consumer Attitudinal Study, Google Surveys, n=1000.