- Study shows E-mobility on the rise: around 80% of German respondents intend to switch to an electric car within the next five years
- 66% of them would choose financing instead of direct purchase for an electric vehicle – a total of 73% in Germany, USA and China consider manufacturers’ financial service providers the first choice
- Digital first in car financing options: online purchasing gains in popularity – majority in all three countries, particularly in China, rates digital contact with provider equally important as a personal contact
- Smart payments from the car (In-car payment): potential users in all countries consider in-car payment a key competitive advantage of the provider over other providers
- Financing of new vehicle preferred option in all markets (46%) – car subscriptions ranked second in terms of popularity
- Manufacturers’ financial service providers strengthen brand loyalty: for almost half of the respondents (45%) in Germany, the USA and China, the financial service provider plays a significant or very significant role in whether they remain loyal to the brand
A total of 80% of premium car drivers in Germany intend to switch to an electric vehicle within the next five years. At 66%, the majority of them would finance the vehicle rather than purchasing it outright. This is the result of a recent Kantar survey on behalf of Mercedes-Benz Mobility among more than 2,500 drivers across various brands in Germany, the USA and China. Financial and mobility service providers thus play a key role on the road to E-mobility. In all countries, preferred partners in switching to an electric car are the manufacturers’ financial service providers (total: 73%; GER: 81%; USA: 74%, CN: 64%).
Also digital offerings are increasingly popular: online contact with the provider is increasingly important and considered equally important as personal contact for the majority of respondents. The most open market for in-car payment is currently China (46%). Potential users consider this service a key competitive advantage of a provider over other providers. According to the study financing is still the preferred option (46%) among all financing options, followed by car subscriptions and vehicle leasing. 45% of respondents also state that manufacturers’ financial service providers (“captives”) play a significant or even very significant role in deciding whether to remain loyal to a brand.
Franz Reiner, Chairman of the Board of Management of Mercedes-Benz Mobility AG, stated: “We perceive a clear push towards e-mobility and a desire for more financial flexibility among car drivers. The study thus confirms our strategy of paving the way to green mobility with flexible financing options. The digital sales channel is playing an increasingly important role in this, but personal advice remains relevant. For years, we have been driving the digitalisation of our offerings and the integration of digital and physical customer touchpoints at Mercedes-Benz Mobility to provide our customers with a seamless experience and the highest level of service across all sales channels.”
Peter Zieringer, Chief Customer Officer and Member of the Board of Management of Mercedes-Benz Mobility AG responsible for Sales & Marketing, added: “The study shows that financial service providers play a key role in the choice of a vehicle brand. For the customer, car manufacturers and their financial service providers are strongly intertwined. A key success factor is an integrated customer experience. Mercedes-Benz Mobility works intensively with the vehicle brand to create such exceptional customer experiences.”
Particularly in Germany and the USA, car owners prefer financing the electric car instead of purchasing it outright
In all three markets, a large majority of respondents can imagine driving an electric car within the next five years. In comparison with the other countries, China stands out with 96%. However, also in Germany (80%) and the USA (68%) the trend clearly goes towards electric vehicles. There was also a strong interest in financing options: Of the respondents interested in electric cars, 66% of the German and 65% of the American study participants stated that they would purchase the vehicle via a financial product (financing, leasing or car subscription). Direct purchase is much less popular with 44% in Germany and 45% in the USA. The most popular financing option in all markets is financing (GER: 48 %; USA: 60 %, CN: 58 %). When it comes to financing and leasing an electric vehicle, the manufacturer’s financial service provider is the first choice in all countries. In Germany, 81% opt for the so-called “captives”, followed by the USA (74%) and China (64%).
Online purchase is increasingly popular globally, respondents open to in-car payment
Digital offers for car financing options are gaining in importance. For the majority of respondents in all countries, digital touchpoints – i.e. online contact with the provider during the purchasing process – are equally important as personal contact with the dealer (GER: 55%; USA: 52%, CN: 76%). The willingness to finalise a financing or a leasing contract or car subscription online is also more distinct than an online direct purchase. However, a designated personal contact can increase the willingness to finalise a contract online. In Germany, for example, around a third (38%) of respondents stated they would not finalise a financing or leasing contract online without personal advice. However, around half (47%) of these individuals would be willing to finalise an online contract together with a personal advisor. In China, on the other hand, only a quarter (26%) would decline an online-only contract for financing and leasing. However, two thirds (67%) of these respondents would be willing to finalise the contract online together with a personal advisor.
Particularly in China, respondents are open to digital payments from the car (in-car payment). In China, 46% of the study participants would very likely or even definitely use in-car payments. In Germany (27%) and the USA (27%), there are still concerns about data security and data protection. However, those may be reduced through raising awareness about the security of the system. Potential users in all countries rate in-car payment a key competitive advantage of a manufacturer over other providers (GER: 55%, USA: 68%, CN: 76%). The study participants consider the significant gain in convenience and more ease in everyday life the greatest advantage of in-car payment.
Financing still the top option
To finance their next car, 46% of respondents would opt for financing. This is followed by subscription (32%) and leasing (26%). Especially users who have already financed or leased their current car would choose financing options again for their next vehicle. Direct purchasers in Germany and the USA tend to purchase their next car again directly, as well. In China, direct purchasers are showing greater openness to different financing options: the willingness to switch from a directly purchased car to financing or a car subscription is most significant here. Thus, 48% and 51% of Chinese respondents respectively would very likely or even definitely switch to financing or a subscription model for their next car. In Germany, this willingness is currently still low at 18% (financing) and 21% (car subscription) respectively.
German drivers finance to own the vehicle at the end of the contract
“At the end of the contract term, the car will be mine” – this is one of the main reasons for financing a vehicle in Germany (46%) and the USA (43%). One’s own financial capabilities play a role in all countries, especially in China and the USA. In the USA, this includes the possibility to purchase an otherwise too expensive car (52%). In China, it contains avoiding a high one-off payment when purchasing outright (49%). According to the respondents, leasing in particular allows to drive a new car more frequently (GER: 40%, USA: 46%, CN: 26%). In addition, one of the main reasons cited is that age-related repairs are easier to avoid (GER: 37%, USA: 49%, CN: 13%). Especially in Germany and China, study participants who only want to use the vehicle but not own it consider leasing attractive (GER: 37%, CN: 26%). Financial considerations tend to play a secondary role.
Manufacturers’ financial service providers strengthen brand loyalty – majority opt for a new car instead of a used one when it comes to financing options
While the choice for a financial service provider in Germany and the USA depends on the terms and conditions in particular, Chinese respondents attach even greater importance to receive all vehicle-related services from a single source by a single provider. Trust in the provider is a decisive factor in Germany, USA and China when choosing a financial service provider. The manufacturers’ financial service providers thus have a significant influence on brand loyalty: for almost half of the study participants (45%), the services provided by the financial service providers play a significant or very significant role in their considerations to choose a brand again. According to the respondents, Mercedes-Benz Mobility is regarded a trustworthy, innovative, and customer-oriented financing partner in all three markets.
Financial service providers also contribute to further economically positive effects for manufacturers: in contrast to direct purchases, the majority of respondents in all three countries opt for more optional extras when financing or leasing a vehicle (62%) as well as for a new car instead of a used one (56%). Additionally, financing or leasing contracts lead to the purchase of additional services, particularly in China (GER: 44%, USA: 45%, CN: 66%). Car insurance is popular in Germany and China, as are extended warranties in the USA.
About the study
Global Trends in Automotive & Financial Services is a market study that recurrently examines customers’ expectations of modern mobility service providers regarding financial products and purchasing processes, as well as the influence of financial services on car purchases. It was first conducted in 2022 by the market research institute Kantar on behalf of Mercedes-Benz Mobility. Between January and February of this year, a total of 2,605 individuals from Germany, the USA and China took part in an online survey with 36 closed questions and two open questions. Kantar surveyed drivers of premium cars across all brands who had acquired their current vehicle either by means of financing options (financing, leasing) or by direct purchase.
Source: Mercedes-Benz Group AG., https://group-media.mercedes-benz.com/marsMediaSite/en/instance/ko.xhtml?oid=53735573&ls=L3NlYXJjaHJlc3VsdC9zZWFyY2hyZXN1bHQueGh0bWw_c2VhcmNoVHlwZT1mbGV4JnNlYXJjaFN0cmluZz1OTVNfRmxleFNlYXJjaF9DdXJyZW50TmV3cyZyZXN1bHRJbmZvVHlwZUlkPTQwNjI2JmZsZXhJbmZvVHlwZXM9NDA2MjYlMkM0MDYzMA!!&rs=4