Phoenix Marketing International's Automotive Practice has released its most recent findings from its ongoing research regarding purchase consideration of alternative fuel vehicles (AFVs). The Automotive Practice collects data from consumers who were recently or are currently in the market for a new vehicle, and asks them about their willingness to consider an AFV on their next purchase or lease.
Data is collected biannually each January and July. The most recent results from July 2013 show that what type of vehicle consumers seek for purchase (luxury vehicle versus non-luxury) has an impact on consumers' willingness to consider an AFV, and that consideration among luxury consumers is shifting.
Phoenix Analyst Kevin Severance notes, "There are many factors that go into a consumer's decision to consider an alternative fuel vehicle. Influences vary from things like rising gas prices, the potential for fuel savings and AFV purchase incentives to things like openness to new technology or an interest in being environmentally conscious. AFVs often cost more up front, which can be a barrier for purchase to those who are looking for a non-luxury vehicle, despite the potential for longer-term fuel savings. For someone able and willing to spend more on a luxury vehicle, the decision might be based less on the potential for savings and more on personal preference to be 'green' or to drive something that represents the state of the art in automotive technology."
Phoenix data collected prior to July 2013 had shown that consumers in the market for a luxury vehicle tend to be more inclined ("more likely" or "extremely likely") to consider an AFV than those in the market for a non-luxury vehicle, but the most recent results show that gap has practically closed.
From January 2013 to July 2013, the portion of luxury consumers inclined to consider an AFV saw a significant drop from 35 percent to 31 percent and is now tied with non-luxury consumers. Non-luxury consumers have remained relatively stable at approximately 31 percent, although there was a slight decline in January 2013 – the same time there was a dip in gas prices.
Unsurprisingly, the findings imply that non-luxury consumers are more sensitive to fluctuations in gas prices and that those fluctuations directly impact purchase consideration of AFVs within that market segment. The findings also indicate that even with increasing fuel costs, luxury consumers could be losing interest in AFVs.
Luxury consumers who are averse to considering ("less likely" or "extremely unlikely" to consider) AFVs are also creeping upward from 11 percent in July 2012 to 13 percent in January 2013 and now at 14 percent in July 2013. Despite rising fuel costs and perhaps in expectation of continued improvement in the economy, luxury consumers are veering away from AFV consideration.
Although the precise cause of the shift is unknown, Phoenix Automotive points to a combination of factors including an improving economy as well as luxury vehicle consumers' known attraction to vehicle performance. Phoenix's Automotive Practice also conducts continuous advertising research that has shown conclusively that luxury consumers are more attuned to messaging on performance than they are fuel economy. These latest findings suggest that luxury consumers might be turning their backs on the idea of an AFV as the en vogue alternative and returning to the more classic notion of luxury prowess through performance.
