Study: Auto Extras Are Way Too Complicated

Feb 02, 2015 03:59 PM EST | Jordan Ecarma

Automotive innovation is for the nerds.

That's the takeaway from a new Oliver Wyman study showing that everyday consumers get overwhelmed by fancy abbreviations and features they don't understand, preferring to stick with the basics instead of springing for the latest in car tech.

Surveying 550 new-vehicle customers in the United States and Germany, the study found that consumers "feel overwhelmed by the huge number of innovations" and tend to focus on affordable mobility over innovative extras.

"In particular, the massive number of company specific names (4Matic, dynamic drive) and abbreviations (HCCI, JDLS) create confusion," the study said.

Interest in auto extras drops by half before the customer even knows the price, and the actual take rate of innovations purchased by the consumer is only 17 percent, according to the study, which used 50 test situations to analyze consumer behavior and dealer knowledge.

Additionally, auto dealerships don't necessarily follow brand image when it comes to emphasizing new features--a carmaker could emphasize innovations that aren't even explained by dealers to customers on the lot.

Dealers could spend as much as 12 minutes explaining automotive innovations, or they might ignore them entirely. The study found that Mercedes-Benz dealers spent the least amount of time explaining innovations, while Lexus dealers spent the most.

When new auto innovations come to the market, they are usually developed by suppliers and first appear as extra options for new vehicles. Suppliers have to deal with two uncertainties: how well the vehicle will sell and how appealing the innovation will be to customers.

Original equipment manufacturers and suppliers alike need to study the customers in their target markets to be able to predict how well innovations will be received.

Buyer choices when it comes to car extras vary widely based on budget, age group, region and other factors; in one example, 45 percent of European customers older than 55 would want an automatic transmission, while only 21 percent of younger buyers would opt for that extra. In Germany, 55 percent of all customers would order side air bags as an extra, but only 46 percent of customers worldwide would want that option. 

As the auto industry gets closer to offering self-driving vehicles, perhaps carmakers should keep these findings in mind: Buyers who are overwhelmed by extras won't be too likely to trust auto pilot functionality right off the bat. 

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