Automatous vehicles sentiment rides high among global consumers

09 August 2016 Consultancy.uk

Self-driving cars are around the corner, with a range of stakeholders keen for their implementation. The vehicles promise reduced emissions, improved efficiency, improved safety standards and improved utilisation. Consumer sentiment remains relatively divided, however, with many weary of potential risks associated with a complete loss of control. While weary, the majority of consumers in a recent survey would put down more than $5,000 for a fully automatous vehicle.

Driving has, since the birth of the modern car, become both a necessity in many places around the world as well as an activity of leisure. The freedom and practicality associated with motorised vehicles have seen more than 37.1 million cars on UK roads – sales continue to grow, with more than 100 million new units expected to be sold by 2021 globally.

Cars, particularly ICE models, however, are polluting. Besides the large amount of greenhouse gas emitted, other noxious gases are produced during combustion which have direct negative effects on city environments. Large numbers of cars also create congestion, as well as vehicle accidents – which claim 1,732 lives in the UK each year and seriously injures more than 22,000.

Consumers open to self-driving cars

Times are changing, however, with ever increased focus on efficiency, environmentally friendly, safety and practicality driving forward new technologies that aim at revolutionising the car through full automation. According to a recent analysis of the potential impact of fully automatous self-driving vehicles (SDV) – their full implementation could see up to a 60% drop in the number of cars on city streets, an 80% drop in emissions and a 90% drop in accidents.

The high impact of SDV means that there is considerable drive to their development and implementation from stakeholders. Consumers will need to be on board, however, for the major benefits to be realised in the long-term. To identify in how far they are keen on the new technology, The Boston Consulting Group (BCG) and the World Economic Forum surveyed 5,500 consumers across 27 cities in ten countries; aiming to identify their respective sentiment to the potential arrival of automatous vehicles.

Consumer sentiment in favour of trying a self-driving car is relatively robust. Globally, 29% of respondents say that they are very likely to try one, while 29% said they are likely to do so. Only around 12% say they are very unlikely to do so.

Top reasons for consumer sentiment

Respondents from India display by far the most interest in trying a SDV at 56% very likely to do so, followed by UAE at 38%. In terms of likely or very likely to try, Chinese consumers are only slightly behind Indian consumers, at 75% and 85% of respondents respectively. Drivers in Singapore too are relatively keen to get into an SDV at 62% of respondents being at least likely to try.

Japan, the Netherlands and Germany hold the most sceptical consumers. In Japan just 12% say they are very likely to try, while in the Netherlands 19% say they are very likely to try. In Germany 21% say they are very unlikely to try the technology, just one point behind Japan where 22% say that they are very unlikely to try.

The research also ask consumers to highlight why they are interested in the technology. The top priority for consumers is that it is able to self-park, as cited by 41% of respondents. Being productive while being driven comes in second, cited by 40% of respondents. Just under a third cited improved safety as a reason to use a SDV, with a similar number citing environmental benefits. Lower insurance premiums were cited by a quarter of respondents.

Safety concerns top hurdle

As it stands, safety is the biggest barrier to positive consumer sentiment for the SDV, with 50% of respondents saying that they do not feel safe in cars that drive themselves. 45% of respondents want to be in control of the vehicle at all times, while 43% say that they do not want the car to make any mistakes. Around 30% of respondents say that driving is a pleasure for them, while 27% are weary of their own ignorance towards the technology.

Around a quarter of respondents is keen to wait until the technology is proven before allowing it to take the helm, while 23% say they are concerned that cars may be hacked. 20% fear breakdowns, given the increased complexity of repairs.

Consumers willing to pay more for SDV

The analysis also ask respondents whether they would be willing to pay a premium for a SDV. Globally, around 43% of respondents said that they would be keen to do so. Interestingly, while the least likely to try, Japanese consumers are the most keen to pay a premium for a SDV, at 51%, followed by France and India, both at 50%. Around 46% of UK consumers said that they would be willing to pay a premium.

In terms of the premium paid, the majority across the globe would be willing to put down more than $5,000 for an SDV equipped vehicle. German and Singaporean consumers are the most willing to spend more than $5,000, at 75% and 89% respectively. Indian consumers – while the most keen for the technology – are the least keen to put down more than $5,000, at 51% of respondents.

Consumers trust OEMs more for SDV development

When it comes to the developers of SDV, traditional OEMs are considerably more trusted than technology companies or new entrants. Germans in particular are trusting of OEMs, at 58% of respondents, with few trusting tech companies, at just 7%. The Dutch are the most critical, with around 34% of respondents saying that they do not know who to trust. The US has the highest level of trust for tech companies, at 21% of respondents, just behind OEMs at 22%. In the UK the most trusted group are OEMs at 41% of respondents, 24% said that they don’t know who to trust.

“There is a compelling case to be made for SDVs in cities,” says Nikolaus Lang, a BCG senior partner and report co-author. “Ride-shared, electric robo-taxis can substantially transform and improve urban transportation and, by direct extension, liability, by providing more people with easier access to mobility, making streets safer, and freeing up space no longer needed for parking. The major players—industry, consumers, and policymakers—are excited and engaged.”

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