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Bain: car buyers want lower prices and more tech at once
CNBC reports Bain found tech led purchase considerations in China while price remained first in the U.S. and Europe, and said automakers must close gaps without pricing themselves out.
- New headline Was: “Car buyers are demanding lower prices and better tech. Automakers must deliver both”
- Our desk filed its story
Global automakers face buyers who want both competitive prices and more technology, consultancy Bain & Company told CNBC, citing its latest Global Automotive Consumer Survey1.
Technology and features were a leading purchase consideration for 58% of Chinese consumers, ranking ahead of price, CNBC reported from the survey1. In the United States and Europe, price remained the top consideration, cited by 68% and 62% of respondents, respectively1.
Bain executives told CNBC that intense competition in China has made low prices an expectation, so carmakers try to stand out on technology and features1. Klaus Stricker, who leads Bain's global automotive and mobility practice, said competitive price is "basically a precondition to be in consideration of the customer"1.
Stricker told CNBC he expects Western markets to follow, with competitive pricing becoming a baseline and technology playing a larger role in purchases, and said growing competition from Chinese manufacturers is expected to intensify pricing pressure in Europe1.
China's vehicle exports to Italy more than doubled to 209,258 units in January through August, while shipments to the United Kingdom rose about 86% to 365,672, CNBC said, citing customs figures reported by the China Passenger Car Association1.
More than a third of customers in Western markets are open to new brands, according to Bain's survey as reported by CNBC, and buyers most interested in autonomous-driving technology are more willing to switch manufacturers for better functionality1. Helen Liu, Bain's Asia automotive head, told CNBC that younger U.S. and European consumers are closer to Chinese buyers in openness to technology1.
Stricker said mass-market buyers often expect advanced driving technology to be included rather than sold at a large premium, CNBC reported1. Liu said Chinese and Western manufacturers are "climbing different mountains": emerging Chinese players must build brand standing, while Western incumbents must strengthen technology offerings, and all must keep prices competitive1.
Bain said manufacturers that close those gaps without pricing themselves out of consideration stand to gain as the industry consolidates, according to CNBC1.
