Roland Berger Strategy Consultants and TNS Infratest on hybrid and electric cars as customers see them

Succeeding in the market is about marketing, not just technology

• Survey of 1,083 car buyers in Germany, Great Britain and France
• Findings: Customers think Toyota is doing most in environmentally-friendly power systems (named by 55%), followed by Honda (20%), Late followers are putting their position in the market at risk if they don't invest in marketing now
• More people are prepared to pay for environmentally friendly cars
• Even now, many customers are already interested in alternative power systems (over 70% in Germany and France)

Electric vehicles are the way forward for cars. The automotive industry is investing massively in research and development into these alternative power systems. But customers are still not aware enough just how much the industry is actually doing: in a comprehensive study, Roland Berger Strategy Consultants and TNS Infratest asked more than a thousand customers in Europe's top three markets how they see what the major manufacturers are doing in alternative power systems (electric vehicles, hybrid cars), and what makes they prefer. The findings should alarm Western car makers: while Toyota (55%) and Honda, two Japanese OEMs, come top of the list, the best Germany can do is BMW in third place, with 19% (respondents were allowed to name up to three makes). The really good news for all car makers: more people are prepared to pay more for vehicles which emit less CO2 in 2009 than in 2007.

"The automotive industry is facing dramatic challenges: sales and profits may be collapsing, but car makers are still having to invest massively in new powertrain systems and business models for individual mobility," says Ralf Landmann, Partner at Roland Berger's Automotive Competence Center. In the wake of the world climate debate and the need to be independent of imported oil, politicians the world over have started putting legislation in place. The automotive industry now agrees, electrifying the drivetrain is a key technology: so most car makers have started investing significant resources in research and development into these alternative power systems. Dr. Robert Schröder, Deputy Managing Director at TNS Infratest Automotive, says, "And the current debates on new infrastructure providers for alternative power systems show manufacturers can't close their eyes to the changes ahead. They should try actively to create an alternative future."

Very few people really see how much manufacturers are doing, though

Many customers still have the impression most automotive groups have failed to realize this change in time, however. Fifty-five percent of respondents said Toyota is doing most on environmentally friendly power systems, followed by Honda (20%). Top German maker was BMW, in third place with 19%. What was even more striking was how far out in front Toyota was when people were asked which make they associated most with hybrid or electric cars: the Japanese volume maker was named by 36% of respondents, followed, once again, by Honda, way ahead of all other manufacturers. More people are prepared to pay more for cars which reduce CO2 emissions significantly in 2009 than they were in 2007: the percentage of respondents prepared to pay more than EUR 2,000 extra for an environmentally friendly car rose from 14% to 20% and from 10% to 16% in Germany and France respectively. In Great Britain, the percentage of people prepared to pay more than GBP 1,500 to help reduce emissions was up from 15% to 17%.

Manufacturers need to invest in marketing now

What customers need, and the way to succeed in the market, has changed drastically in recent years. New technology is no longer just something development departments do. The only way to succeed is to be innovative, give customers what they need and make them aware you're doing so. "Communicating and marketing across the board are what also really counts in this race," says Landmann. "Around 60% of those surveyed want a particular design for fuel-efficient, low-emission vehicles. They want to show they're driving a particularly environmentally friendly vehicle." Customers also rate car dealers as no more than average when it comes to advising on questions about fuel consumption and emission levels. Another opportunity of setting yourself apart from the competition.

Use the opportunities new drive systems offer

Most consumers are really interested in alternative power systems: 68% of respondents said they were fairly interested or very interested in this subject. In France and Germany, the figures were even 77% and 76% respectively. "Efficient, low-emission power systems are already a key factor as far as customers are concerned," says Landmann. "Manufacturers who succeed not just in offering good technological solutions fast in this field, but making customers aware they are doing so, will be the major winners in the industry in the coming years."