5 trends shaping the auto industry’s approach to a new normal

Kyle Keogh, Thomais Zaremba / May 2020

The automotive industry was already impacted by an unprecedented disruption before the coronavirus. Working with auto brands over the past few years, we’ve seen shared mobility, driverless cars, and electric vehicles shake up the industry, so understanding how to adapt during difficult times is not a new challenge. Here’s what’s different: COVID-19 is accelerating trends in the automotive industry that were already underway but had not yet been widely adopted. These will likely become the new normal when operations reopen.

Automotive brands looking to position themselves for recovery will need to adapt to faster industry cycles and shorter planning horizons. They’ll also need to prioritise initiatives that are best aligned with where the industry is headed, such as operationalising home delivery or further digitising the automotive purchase process. To help auto marketers prepare for what’s ahead, we’ve identified five key trends to keep in mind.

1. People are finding comfort in car ownership

Amid a nearly full halt to everyday modes of transportation, from flying to ride sharing, we’re starting to see a rise in consumers’ desire for their own personal mode of transportation. The personal spaces where people find comfort include their homes and their own automobiles.

A study from Ipsos in early March shows that, in China, people’s attitudes toward vehicle ownership, public transportation, and mobility solutions like ride hailing have shifted in the wake of the pandemic. Usage of personal or private cars nearly doubled after the outbreak, while reliance on public transportation has fallen by more than half, with taxis and ride hailing each seeing significant declines in usage.1

A green line encircles a blue car. 93% of people say they are using personal vehicles more. Source: Cars.com, Ride-Sharing Drops, Online Car Shopping Increases in Coronavirus’ Wake, March 30, 2020.

With commuters in the U.S. relying less on public transportation and ride-sharing services, 93% of people said they are using personal vehicles more.2 But among people surveyed in China who do not own a car, most responded that they intend to purchase a vehicle for health and safety reasons.3 And we are seeing this shift play out in the U.S. A recent Cars.com survey reported that 20% of respondents who didn’t own their own car were considering purchasing one.4

2. People expect to find car deals during the coronavirus pandemic

Car buyers want to know if now is the time for a vehicle purchase, and if so, can they score a good deal. Search interest for “is it a good time to buy a car” grew more than 9X between January and February of 2020 and March and April of 2020.5 Savvy car shoppers have increasingly turned to digital to compare models and prices, but now deals matter more than ever.

U.S.-based search interest for ‘is it a good time to buy a car’

A line graph indicates that search interest for buying a car in the U.S. has spiked in March 2020 since January of the same year.

Price is always an influential factor for auto purchasers, so it’s no surprise that current deals offered by automakers are heightening people’s interest in what’s out there. Search volume for best car deals and truck deals has grown 70% globally from March 22, 2020, to March 28, 2020, versus March 15 to March 21 of the same year.6

And deals could speed the path to purchase, as auto shoppers see 0% annual percentage rate financing and cash discounts as the strongest influencers of expediting their vehicle purchase.7 Automakers have responded with financing deals like no-interest financing for 72 to 84 months, but have also moved to assist customers who need help with their payments by offering no-penalty payment deferments.

For example, Hyundai had the No. 1 ad for the week of March 30, 2020, with a context-appropriate spot about Hyundai Assurance, a program that covers payments for up to six months if a buyer loses their job this year due to COVID-19.8

3. People want the dealer experience from their home

As consumer research increasingly moves online, U.S. search interest for “dealership near me” dropped more than 20% in March 2020 versus February 2020.9 But people still want to engage with vehicles as they would on a dealership lot. They just want that experience to be closer to home.

Auto shoppers ranked the following activities by preference as good alternatives to a dealer visit:10

  1. At-home test drive
  2. Review videos
  3. Digital showroom
  4. Online configurator
  5. VR test drive
  6. Videoconference

Before the pandemic, auto shoppers were turning to YouTube to experience digital test drives. The importance of that trend is even greater given current shelter-in-place policies. Brands that want potential buyers to engage with specific models should consider highlighting video content of interior overviews, walk arounds, test drives, and review videos.

4. People want online car buying and at-home delivery

Automakers have quickly shifted from offline-only transactions to meeting consumers’ preference for digitising all steps of the purchase journey. Ninety-two percent of auto purchasers already research online, and we’re now seeing the full vehicle buying journey — through purchase and delivery — follow a similar trajectory.11

A pair of hands shops for a car on a mobile phone. 18% of auto shoppers would buy a vehicle sooner if there was an online option.

While dealers before COVID-19 have been able to offer vehicle delivery, only a very small number have the online capabilities to execute a full vehicle sale online. Additionally, while the purchase journey itself is happening online, the purchase still happens offline. At-home test drives and vehicle delivery were tied as the number one alternative to visiting a car dealership for auto shoppers.12

At a time when social restrictions related to the pandemic are impacting consumer behaviour, developing strategies for how to meet consumer demand for online buying and at-home delivery can make a large impact: 18% of auto shoppers would buy a vehicle sooner if they could purchase the vehicle they wanted without going to a dealership.13

5. People are tuning in to digital events

As circumstances have required postponing or canceling auto shows and large conferences, some original equipment manufacturers are delaying vehicle launches, while others are shifting to fully online launches for new vehicles. This is a radical shift for an industry used to glossy, in-person rollout events.

AutoTrader, for instance, managed its 2020 AutoTrader South African Car of the Year 2020 through a bespoke website designed for the event, with integration across video, social media channels and dedicated sections for different types of vehicles based on their use: urban, family, sports utility and the like. More than 220,000 consumers voted for their favourite car in the lead-up to the finale in April, which was hosted through a live stream. This footage created a strong emotional bond with the online audience, and continues to garner views, extending the usefulness of the finale event beyond a once-off awards evening.

For auto brands rethinking live events in the near term, consider this guide for help.

The pandemic has changed business as we knew it. And while we can’t predict the future, these shifts in consumer behaviour are likely to persist. As automakers shift to moving metal again, understanding customer expectations, as well as the new ways people shop and buy, will be critical to success.

Kyle Keogh

Kyle Keogh

Industry Director, Automotive at Google
Thomais Zaremba.png

Thomais Zaremba

Industry Director, Automotive at Google

Sources (13)

1, 3 Ipsos, Impact of Coronavirus to new car purchase in China, March 12, 2020. Accessed May 2020.

2 Cars.com, Ride-Sharing Drops, Online Car Shopping Increases in Coronavirus’ Wake, March 30, 2020. Accessed May 2020.

4 Roadshow by Cnet, Coronavirus has people changing their minds about ride-hailing, study says, March 24, 2020, Accessed May 2020.

5 Google Trends, U.S., Jan. 2020–April 2020.

6 Google Data, Global English, March 22, 2020–March 28, 2020 vs. March 15, 2020–March 21, 2020.

7 Google Surveys, U.S., “Global Auto Pulse,” n= 1,203 of respondents who plan to purchase a vehicle in the next 12 months, March 26, 2020–April 2, 2020.

8 iSpot.tv

9 Google Trends, U.S., March 1, 2020–March 29, 2020 vs. Feb. 2, 2020–Feb. 23, 2020.

10, 12 Google Surveys, U.S., “Global Auto Pulse,” n of 1,263 respondents who plan to purchase a vehicle in the next 12 months, March 2020–April 2020.

11 Google/Kantar TNS, U.S., The Drive to Decide Survey, n=500 recent car buyers, 2018.

13 Google Surveys, Global, “Global Auto Pulse,” n of 9,019 respondents in BR, CA, FR, DE, IT, JP, ES, UK, and U.S. who plan to purchase a vehicle in the next 12 months, March 2020–April 2020.