Global survey: Is 'green' set to drive the car industry?

Picture this. A crowded street full of bars and restaurants, gorgeous and wealthy people spilling out of drinking establishments and onto the footpaths. Suddenly the sound of a throaty engine rises above the pumping music and street noise, a prelude to the gobsmackingly powerful, tangerine sports car that pulls up. It's quite simply beautiful. Every single conversation stops. Laughter trails off. And every single head turns.

And that's what makes it quite amazing that, even if money were no object, six in ten people say they would rather buy a green car than a dream car.

Synovate surveyed more than 13,500 people across 18 markets about green versus dream cars, vehicle ownership, intent to buy in the next year and their attitude to cars, traffic, public transport and their need-for-speed. Here's some of what we found.

Dream, green or in between?
Is green mainstream? Can the lure of the environmentally friendly vehicle outweigh the desire for all the raw power of the petrol engine? Synovate asked respondents to forget about money for a moment and tell us whether they would buy green, dream or in between.

The top answer across all 18 markets, if money were no object, was to buy a green car, with 37% of respondents saying this would be their preferred purchase. Thirty-one percent said they would buy their dream car and a further 22% claimed that 'my dream car is a green car'... meaning that 59% - or very nearly six in ten - showed the desire to go green.

"Car makers are producing more and more options that will appeal to this fast-growing group of green-inclined people," says Synovate's CEO of Motorsesearch, Scott Miller.

"But we cannot forget that cars are the ultimate product when it comes to an emotional connection with people. What you drive says more about you than you think. There will always be a group of people who do not want to compromise on dream cars for green reasons. The answer? The 22% who want both are the way of the future. Car makers will produce vehicles that are dream and green."

Some of the highest results for 'green' (adding 'green car' to 'dream car is a green car') were Thailand at 77%, Korea at 76%, China at 75% and Brazil at 72%.

Synovate's Director of Motoresearch for China Kelvin Gin, says it's not a surprising result for China.

"Last year's Olympic Games really highlighted issues with China's air quality, plus the Government has made concessions for both green car manufacturers and the people who choose to buy and drive them. In fact there is RMB10 billion (approx US$1.5 billion) up for grabs for investment in manufacturing greener cars."

Similarly the Brazilian Government provides incentives for people to buy greener vehicles.

"By law, all cars now have to be flex-fuel which has quite quickly made 'green' cars part of behaviour and thinking in Brazil," says Ari Gonzalis, New Business Director for Synovate Motoresearch in Brazil.

"Brazilians are also proud that the nation is a leader in developing alternative fuel that is cheaper and pollutes less. By making 'green' de rigueur, the Government has actually created a scenario where people's dream cars are green by definition."

Despite the 'fantasy' element of the question where money is no object, Synovate Korea's Motoresearch Head, ByeongHwan Je, puts the Korean lean towards green down to economics.

"Green or hybrid cars are more fuel efficient and, together with pollution concerns, this economical issue would be a big part of why Koreans put green over dream."

The nation most likely to simply elect 'green car' was Germany, with 58% choosing the environment over their dream cars.

So where can the dreamers be found? Overall, 31% of people would still choose their dream car green-be-damned, 35% of men and 27% of women. The single biggest result for dream car came from South Africa where over half of all respondents (53%) would go for their fantasy vehicle.

South Africa-based Richard Rice, Director of Global Motoresearch Sales & Marketing for Synovate, says that, in South Africa, the car is probably the closest product that comes to a visible expression of who a person is.

"Here a car is emotional. People love their cars... for the freedom, for the image they create, for what it says about their status. Consequently, that image is far more important than how environmentally friendly a car is.

"Compounding this is that many car buyers in South Africa are the first family members to even be able to buy a car, so in the excitement, green considerations will fall by the wayside. We'll go with however much power we can afford."

Similarly, 47% of Indians say they would go dream, something that Sumit Arora, Head of Synovate's Motoresearch group in India explains is due to the 'new' India.

"The Indian auto market is vibrant. Every year new 'dream' models are launched and major world players arrive. Luxury cars have started hitting good numbers.

"And what's driving this is ambition and aspiration. People now have more money; more choices and they are willing to spend. Ownership of big-ticket items is a reflection of success and conspicuous consumption is celebrated. These numbers will only rise."

In the United States (US), 35% would buy a dream car, 23% chose green and 19% say their dream car is a green car.

Purchase intention: Brakes on or gearing up?
Yes, we are all living in interesting times... many individuals are dealing with financial challenges, Governments are trying to manage copious economic challenges and car companies are facing make-or-break times. But through all this, there are still car buyers out there...

Overall, 15% of respondents across 18 diverse markets say they will buy a new car in the next 12 months. The new car purchase intenders were topped by India at 38%, Egypt at 24% and Turkey at 23%.

US-based Vice President of Motoresearch, Tim Englehart, says this is an indicator of where we are economically around the world.

"This clearly shows that car companies have great opportunities in the emerging markets of the world. It needs to be noted that this survey was conducted across urban people from the large cities so, while the results are not representative of the general population of the country, they are absolutely representative of people the car companies may wish to target.

"Many of these people will be first-time buyers and they may not be intending to buy a large family car. For example, a third of urban respondents in India saying they intend to buy a new vehicle is not surprising but this number would be growing with the introduction of a US$2,000 Tato Nano. This car has the entire industry buzzing."

In the case of Egypt, Tamer El Naggar, Managing Director and auto research specialist for Synovate in Egypt agrees there would be a large proportion of first-time buyers in the 24%.

"The dream of car ownership is being achieved by more and more middle-class Egyptians. There are more opportunities now as smaller and cheaper Chinese cars are making inroads in the market."

Least likely to be buying a new car are Australians and Germans with only 6% saying they will in the next year.

Peter Riley, Account Director of Motoresearch in Australia, says "One explanation for the low purchase intentions for new vehicles in Australia could be that just prior to the global financial crisis Australia posted record new vehicle sales. This is likely to have pushed the replacement cycle out. There is also a polarisation in the market between consumers who want to take advantage of low interest rates and great deals on offer, and those who prefer to remain cautious with their spending."

A further 6% of survey respondents across the 18 markets say they will buy a used car in the next year.

Englehart says the 6% is relatively small but car companies have an emerging opportunity in this market.

"There's a strong chance for a second bite at the cherry when it comes to their branded cars. Our survey showed that over half of all respondents (53%) agree they would be happy to pay more for a used car if it came with a manufacturer certification and warranty."

Does public transport have legs?
Personalised transport like cars and motorcycles answer that basic need, getting from point A to point B. Yet, public transport can often take care of that as well, albeit with a little less style. It's greener and cheaper, both important considerations, so are more people joining the queue for the bus?

Overall, 14% of respondents across the 18 markets say they will use public transport more often in the coming year. The highest level of agreement was China at 39%.

Kelvin Gin says Chinese people are definitely curtailing spending but we also need to remember that not that many people own cars yet in China.

"Even though this is an urban sample (so potentially more car owners) and China is arguably the world's top car market, you still have well over a billion people here who do not own a vehicle. They have to get to places somehow so public transport is always in demand in Chinese cities. The Government is improving public infrastructure all the time too."

There was also a high response in Korea where a third of respondents said they will use more public transport and ByeongHwan Je puts this down to simple economics.

"Korea imports 100% of its petroleum and gas from other nations and is therefore very price-sensitive. Even though fuel prices are down from last year, fuel for personal vehicles is still quite a luxury. The Government also actively pushes the use of public transport."

Only 2% of American respondents say they will use more public transport in the next 12 months.

The survey also asked if people would be riding bikes or walking more often and an overall 9% agreed that they would. The highest results were Korea at 20%, Germany at 17%, China at 16% and Japan at 15%.

Shinya Goto, Head of Synovate Japan's Motoresearch team says that multiple factors are at work.

"Public transport, walking and bike riding are no doubt more popular in all these markets for similar reasons... the environment, exercise and economics. But in the case of Japan there is another important factor at work, one that has implications for the auto industry.

"The younger generation is moving away from personal transport. From the late teens to around 30, we see much less inclination to own a vehicle. These young people are environmentally aware and would rather spend their money on mobiles and clothes, taking public transport and creating a 'cocoon' with their mobiles or iPods. This is a real change from other generations."

CEO of Synovate Motoresearch, Scott Miller, says this trend will move beyond Japan.

"Two car households will become one car households. More and more, owning a car may not be viewed as that responsible.

"Smart car makers are already working to find types of vehicles and performance characteristics that will not make people feel responsible for environmental damage; and working to stop the reputation that cars are bad for the world.

"So it's not all doom and gloom - not by a long shot. Quite simply, cars are freedom... and people value freedom above most other things. If they continue to enjoy guilt-free freedom, the car will stay a large part of daily lives for many people."

Love me, love my car
While many are pragmatic about cars, seeing them as a means to an end, the survey also showed that, for many, the love affair with the car remains passionate.

Forty-three percent of Egyptians say they cannot live without their car; 11% of United Arab Emirates (UAE) respondents say that - above anything else - their vehicle makes them feel good; and 27% of Indians and Malaysians are jealous of friends with better cars.

Ajay Bangia, Associate Director of Synovate Motoresearch in Malaysia points out that vehicles can act as strong indicators of social status and success.

"Everyone wants a shiny new car to announce to the world - but especially to their neighbours and friends - that they have arrived."

Indeed, an overall 27% of respondents agree they would love a car that turns heads with standout agreement from the UAE (61%), India (50%), China (40%) and Egypt (36%).

Synovate Director of Motoresearch covering Central and Eastern Europe and the Middle East, Achilleas Militiadous, says that the expat-heavy city of Dubai is full of people after an eye-catching vehicle.

"Quite a few expats can afford a car that they would not be able to buy back home and of course, despite the downturn, the UAE still has more than its share of the super-wealthy who can afford very luxurious vehicles.

"But this phenomenon is not confined to those who can afford cars. Sometimes people pay more for their car than they do their accommodation."

Still, 36% of all respondents see their vehicles as something that simply gets them from one place to another, something that Englehart believes is linked to a loss of connection with car brands.

"There is a lack of emotional connection among many drivers now that has come along due to cookie cutter designs in the name of cost cutting. Long term, that loss of emotion will have a big impact on people's relationships with car brands.

"Car makers have to get the balance right. A car can still be very cool while offering practicality and a lower price. Success in the auto business comes from understanding people well enough to meet their emotional needs as well as practical ones."

Governments taking the wheel
In a global recession, with car companies struggling and the subsequent loss of jobs and economic power, should Governments drive matters?

The Synovate survey asked people whether they agreed with 'I think it's reasonable in a recession for car manufacturers to receive financial assistance from Governments'. We asked the question in March 2009, ahead of the US Government's General Motors investment, but well after many other Governments stepped in, in a variety of ways.

Overall 42% agreed that it was indeed reasonable for Governments to provide auto industry assistance in a recession. Most of the markets we surveyed have national car industries in common, so there's a strong cultural variability on whether people thought those industries and jobs should be influenced by a Government or left alone.

The top markets for agreeing that Governments might step in were South Africa (63%), Turkey (60%), Malaysia (59%), China (58%), India (55%) and Thailand (54%).

"The car industry here employs tens of thousands and makes a significant contribution to the GDP... for most South Africans it makes complete sense to support Government financing."

Gulsah Olcay, Head of Synovate Motoresearch in Turkey says there were big layoffs in the sector prompting the launch of Government support.

"The Government offered direct assistance to car manufacturers who did not lay off employees, preserving a number of jobs. Turkish people in general think that's a good result from a Government action."

"Malaysians have a complex relationship with Proton, the national car maker. People would be quick to complain about a niggly power window problem but also feel enormous pride. Proton has become a symbol of national ingenuity and this is why people would be very supportive should the company require assistance."

Least likely to support Government interventions were the Japanese (67% disagreed with the statement), Americans (65% disagreed) and Canadians (64% disagreed).

Englehart puts the North American responses down to through-and-through capitalism.

"We're going through an extraordinary time in the US in particular at the moment but this does not change the fact that both Canada and the US are among the most capitalistic countries in the world. That kind of background and national philosophy doesn't change overnight."

Muscle cars, sports cars, smart (green) cars, trucks, motorbikes... over the years, Scott Miller, Synovate's CEO of Motoresearch, has made it his business to own and love them all. Miller is a car guy through and through. He spends his weekends driving them (and cleaning them!) and says he works in the world's most enthralling industry with its most fascinating and inspiring products.

Infact spoke with Miller at 9pm Detroit time and, after another hectic day of researching and talking about cars; he was revved up enough to indulge in even more car talk...

Infact: How many cars do you own?

Scott: My family makes it our business to own all sorts of different cars... muscle cars, sports, smart, trucks. We're curious to see what they are all like, to play with them. We own three at a time and kind of cycle through them... we probably buy a new one each year.

Infact: Any motorcycles?

I firmly believe you should buy domestic...

Scott: I've owned one, a Harley Davidson, but traded it in a while ago for family reasons. Great bike.

Infact: What makes are the current three cars?

Scott: One is a Dodge, a GMC (that's a GM truck for those of us who live a long way from Detroit!) and a Smart car. I just parted with an Alfa Romeo Spider.

Infact: How do you feel about them?

Scott: Well, I like them. We have vehicles in our household that fulfill different purposes. We tend to buy classics... no showing off. This is a blue collar, hard working, domestic market and flashy foreign cars are just not right here. Flashy cars don't cut it. So saying, I want to like my cars. They all fit their purpose and they are the perfect vehicles for those purposes. I feel responsible when I think about the cars I buy.

Infact: Any plans to buy a new one soon?

Scott: Yes. We're going to replace the Dodge in two weeks. I have no idea yet what we're going to buy though.

My favourite car until very recently was the 645 convertible, a BMW. But now it's the Audi A5, a great car... if I lived in Germany. I firmly believe you should buy domestic... so I hope our Motoresearch staff in Germany buy German, Japan buy Japanese and here we buy American.

Infact: Do you use public transport?

My day-to-day relationship with cars is... I clean them, the family trashes them.

Scott: When travelling, all the time. When home, no. There basically isn't any public transport in Detroit. There should be. We do take cabs (are they public transport?!) when we go out drinking.

Infact: Do you ever walk or ride a bike to get to where you are going?

Scott: Yes, weather permitting, we walk anywhere that's within a mile or two. And we use bikes for social visits... to see friends or go to the park.

Infact: Describe your relationship with cars.

Scott: (Thinks) This is an important question so I want to get it right.

Cars make a significant statement about their drivers. I want my cars to say I am a savvy smart buyer who buys things that he likes, which also fulfill a purpose. I have enough sense to buy the right cars for what I need them for.

My day-to-day relationship with my cars is... I clean them, the family trashes them. I live with four women. What is it about women and cars?! I cycle through them. I clean one, it's taken out by my family and comes back trashed... just in time for me to have finished cleaning the next one...

Infact: Hey, not all women! I'm clean... now. Ok, I wasn't when I was a teenager. Mind you, my first driving lesson from my Dad was how to change a tyre, check oil and clean the car. I was so disappointed! I love that he did that now though.

With the current economic crisis, every single car company in the world got caught.

Scott: That's a really great first lesson and part of an important trend in the way people manage their whole lives now. You have to start with managing the risk. It's all about risk reduction, putting yourself in control of your situation.

More and more people are feeling out of control because of cluttered lives, technology, busy-ness, stretched finances and on and on. We have a trends research team who are doing a lot of work on this.

So that type of mindset your Dad showed, learning the basics, is much more important to people now than it used to be. We now teach our kids about managing money, we teach them to look after things, the basics of car maintenance... and we hope that gives them, and us, a bit more control over our environment.

Infact: You've made cars a large part of your working life. How much a part of your non-working life are they?

Scott: A huge part. On an average weekend I spend eight hours driving. I had better be comfortable and in a car with nice features!

I have two 14 year olds and an 11 year old... they play football, tennis, golf, volleyball, plus have social engagements. I've driven three hours today and it's a workday. I left the office, picked up a kid, dropped her, picked up another kid, drove an hour and will have to wait to take her home again. That's why my Blackberry is very important... at least I can get stuff done.

I – and my car – am a tool in the raising of my children. Your kids can't take a bus to a remote basketball court or wherever...

Car companies need to understand why different people buy different cars and build their business around that.

Infact: Changing tack for a moment, can you give me your take on the automotive industry at the moment? What does it have to do to build business and stay a major force?

Scott: The auto industry is suffering from being an endurable goods industry... it moves slowly, the product cycle takes too long. The rest of the world moves very quickly. The industry is very complex (what other product is as complicated?) but it needs to get better at changing quickly. Legislation, the environment, the economy... all these things change fast so the auto industry needs to be more nimble and adapt to outside changes.

With the current economic crisis, every single car company in the world got caught. They didn't do anything wrong. There were just too few players with too much volume and no one could move fast.

There will be a sorting out of this. It's started. Soon, no one company will have too much global market share. Some companies will go away, big ones will get smaller, new competition will arrive. All this will make it a more flexible and responsive industry.

The big companies are too big, too consolidated. They will spin off brands and there will be a big correction... more players, more nimble, more competition.

The competition will come from new businesses too. India, China, South America... many emerging economies are producing vehicles. They'll get one or one-and-a-half percent of the global market. That's a great business.

All in all, the car industry is reinventing the way it does business. It's a complex and fascinating business to be in. Find me any other product that is so complex and that people love so much.

Infact: How do car companies build their brands again?

Scott: Slowly. Very deliberately. And with underlying value propositions. They have to get back to genuine value and then deliver it. Build the brand from there. People find out what a product really is, so you can't build a sporty brand if there's no power, you can't build luxury brands if the cars are anything less than sublime in their features, you can't build a family brand if it's not comfortable, efficient and convenient and so on.

Car companies need to understand why different people buy different cars and build their business around that.

Infact: How do they make owning a car an emotional thing for people? Do they need to?

Scott: It already is emotional. That does not have to be created. But car companies need to better capitalise on that emotion. They need to create meaningful and tangible experiences out of the emotions. After all, a car will be the second-largest purchase you make in your life.

Infact: Are there too many cars on the road?

Scott: No. Not yet. There will be.

Personal transportation is freedom. A vehicle is freedom...

Infact: Do you think cars and motorbikes should be more expensive to encourage people to take public transport or walk?

Scott: No, that's not the right control. Fuels and infrastructure can be more limiting though. I would not create an artificial economy. But people should probably pay more for fuel and circulation... access and tolls to keep the roads flowing. I like what London has done in its centre... by making people pay to take their cars there, they have made it a luxury to go into London with a vehicle.

Infact: How do we reconcile the role of the car when it's generally accepted that people all over the world need to reduce their carbon footprints?

Scott: If the primary goal in life is to reduce carbon footprint, then the vehicle is in trouble. But it's not. Of course we need to look at ways to do this but a vehicle is the glue that connects society in lots of places. It brings you your food. It brings goods and other things that people need. All brought together by vehicles.

Personal transportation is freedom. A vehicle is freedom... So we want to reduce the carbon footprint but do people want to be less free? Cars are still key to moving about the world.

Infact: What about Governments around the world... should they be bailing out their auto industries?

Scott: There is Government intervention in many places at the moment. And I think it's right in many cases, it depends how it's handled. The role of Government is to enable businesses to succeed... to make the economy succeed.

Infact: Our survey showed that Americans and Canadians were most against this... what do you make of that?

Scott: That's because they are among the most capitalistic nations in the world. People's opinions have not changed as quickly as the economy did!

If car companies want to sell more green cars, they need to make green cars that tap into people's ideas of 'dream' cars too.

Infact: What is the difference between someone owning a car in a developed country like Japan or the US, and someone owning a car in an emerging economy?

Scott: In an emerging economy, the person uses it much more as a statement of privilege... and eventually takes it for granted. In a developed country, most people see a car as their right, it's due to them.

We quickly become aspirational. When someone in a developing economy gets used to personal transport, there's no going back. So it becomes similar very quickly.

Infact: I know you cannot lump all emerging economies together. For example, when we asked people 'if money were no object, would you buy a green car or a dream car?', the two biggest emerging economies were at odds. China's answers heavily tended towards the green, and India's were only second to South Africa on buying the dream car. How can this be explained?

Scott: That's right. Culture plays a huge part in this. India is very aspirational. China is very pragmatic.

But also the understanding of 'green' is different from place to place. In China, green means clean air. In Europe it's about CO2. In India it's about air quality and water quality.

A practical example of why this matters is this... Europeans think diesel is green because it burns less CO2. Asians think it's dirty because they can see the plumes of smoke when it's burned. Car makers are on top of this but need to understand all the cultures and these factors as they change.

Segments of the worldwide population will be green, other are not. But many will evolve to be green when it comes to cars, over time and depending on the attributes of the cars available.

If car companies want to sell more green cars, they need to make green cars that tap into people's ideas of 'dream' cars too.

Infact: Where do you think the world's strongest 'car cultures' are? And what is a 'car culture'?

Scott: Firstly I think a car culture is engineering-oriented and tech-savvy and – on that basis – the biggest car cultures are Germany and Japan.

If you think of a car culture as love for the car, passion, look no further than the US.

I let it out. I love driving fast.

Infact: How about you Scott? If money were no object, would you buy a green car or a dream car?

Scott: Both. Actually the real answer is that I will never buy my dream car... it would be too lavish and that's not who I am.

Infact: Do you ever look at friends' cars and wish you had them?

Scott: All the time! All my friends have nicer cars than me. But I take a certain amount of pride in dealing with that just fine and continuing to choose cars to meet the needs of my family.

Infact: Do you want your car to turn heads?

Scott: No. Maybe if I lived somewhere with flashy cars like Germany or Hong Kong, but not here in Detroit.

Infact: Do you ever get the chance to drive really fast? How does that make you feel?

Scott: Yes. I love it. We do tracks. And – if I am really honest – sometimes on the highways. I let it out. I love driving fast. We have wave runners... that's what we mostly use for speed.

Infact: Tell me about the strangest thing you've uncovered when researching car ownership over the years. Any cultural quirks?

Scott: I'm going to give you a research type of answer. There are cultures that are positive about everything. It fascinates me. They have such aspiration and hope and they always believe their dreams will come true. So in practical terms this means they tell you they will own a car (or whatever) and they believe it... they are talking from their hearts. But for many of these people, the dream will probably not come true. Still, they remain upbeat, happy and sure that it will. It's a research challenge, but something I find inspirational on a personal basis.

You can follow Scott's exploits on http://twitter.com/MillerCEOMotor

About the Synovate global 'Dream versus green' cars survey

Numbers of people surveyed