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April 5, 2012

Electric Vehicle Push Should Not Necessarily be Focused on Europe and the US

Electric vehicleAnalyst Insight by Neil King, Analyst- Automotive

Green Influences, a recent study by Euromonitor International's Survey Team, reveals some interesting results that challenge many preconceptions about consumer attitudes to green products and offers valuable insight into locating green car buyers. For example, country differences trump income differences, whereby even the lowest-income earners in rural areas of developing markets are much more interested in green products than the average consumer in mature markets.

A diverse set of online panelists in eight countries – the US, Brazil, the UK, France, Germany, India, China and Japan - were invited to participate in this survey, with ages ranging from 15 to more than 65 years old. Consumers' relative willingness to pay more for green products is, unsurprisingly, strongly related to their valuation of green features but there are large regional and moderate gender and age disparities in how important green features are considered to be.

Model of influences on consumers' "green" purchasing decisions


Source: Euromonitor International

The respondents who placed the greatest importance on green features tend to live in developing countries. Our Chinese and Indian respondents, in particular, were very interested in green features and were willing to pay more to obtain them, regardless of their income level. These consumers are also living in markets with rising GDP per capita. On the other hand, disinterest in green features is highest in the relatively inert European markets and the US, as is unwillingness to pay extra.

Green labels are considered more important by older consumers (age 30+) in Brazil, China, France, Germany, India and Japan and by women in all eight countries surveyed. However, interest in green labels is greater among higher-income consumers in China but among lower-income consumers in Brazil.

In China, Brazil and India, online respondents said they were heavily influenced by green claims when making purchasing decisions, often nearly as much as by price. In contrast, consumers in mature markets are much more concerned about price than any green features. Overall, a minority of consumers are willing to pay a premium for green products but, intriguingly, such green-minded consumers are more likely to be found in developing markets, especially in countries with robust GDP growth per capita.

Consumers in developing markets are more green-minded

Image 2

Source: Euromonitor International

Consequently, educating consumers about the value of green features is key in growing markets but until green-mindedness expands further, consumers in developing countries, women and slightly older consumers everywhere are therefore the more promising initial targets for green providers. The issue of green-mindedness is certainly true for electric cars but overcoming scepticism about the new technology is even more critical, particularly in terms of reliability, performance and range. Moreover, the Green Influences survey also found that consumers were more willing, on average, to pay more for products that are convenient to use than those that have green features, and electric cars will certainly not be more convenient than vehicles with conventional powertrains until the charging infrastructure is in place. In the meantime, carmakers should certainly be pushing green-mindedness and promoting electric vehicle technology, but not necessarily focusing on Europe and the US.


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