Their perspective on Auto Sector
Amidst news of how the pandemic has impacted different sectors, auto sector has featured as one impacted considerably given the tightening of purse strings following the economic fall outs of the pandemic with job losses & wage cuts. As per a UN report, world’s workers have lost USD 3.5 trillion in wages amid the pandemic. This has forced the automotive sector to slow down and review the situation in depth.
There have been many scenarios worked out which range from a quick recovery to whether it will be a W Shaped or a V shaped recovery. Given the prolonged spell of the virus’s impact, more alphabets have come into play with K shaped recovery also getting touted by some. At the core of all this is the customer sentiment and how they view their life in the scheme of events unfolding around them that have been unprecedented in their lifetime. It is critical for businesses to understand this well and shape and finetune their strategies accordingly. Here the role of market research is significant and conducting the required qualitative and quantitative research is vital to understand customers well.
Feedback research had understood the impact of COVID on people across UAE, Egypt & KSA in June 2020 through an online research with a sample size of 1000 in each market. In the UAE, people were most concerned about their financial well being as the market is dominated by expats. Spends on some categories have been curbed while purchase decisions have been deferred in other categories like travel and purchase of automobiles.
It is important to understand how the Gen-Z and Millennials in specific are reacting to this situation. These are the youth of the country from 16 to 30 years old and many of them are just beginning to enter the employment market while others are at the initial stages of their career. Their perspectives can be very different from the older segments of the population and it is more important as they are the ones who will form the bulk of the customer base in coming years. To understand this for the auto sector in UAE, Feedback Exelerate, the unit at Feedback research that specializes in the automotive sector reached out to 720 of the Gen-Z & millennials in UAE with research conducted online.
The youth seems less fazed by the situation and remain optimistic about the future. They are circumspect about the immediate future but have clear plans on purchasing a car in the coming 2-3 years. Almost 9 out of 10 are planning on purchasing a new car and this augurs well for the auto industry.
This generation has been more socially responsible and environment conscious. This combined with recent advances in the technology has ensured that the disposition towards electric cars is very positive. Almost half of those aware of electric vehicles are keen to consider them. Most of them consider electric cars to be a must for the environment and this is felt more so by those who are keen on considering electric cars. There have been a few concerns that have been a concern for electric vehicles though recent advances have addressed them to a good extent. However, the concerns on electric cars not being seen as powerful enough and that they are good only for travelling short distances do remain an issue among the youth. These are aspects that manufacturers of electric vehicles will need to address to strengthen the consideration among current intenders as well as to lure those currently not considering EVs
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