Auto Tech Interest Wanes as Pricetag Rises

June 18, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | Automotive | Financial Services | Radio | Retail & E-Commerce | Technology

Consumers in the new-vehicle market remain very interested in a variety of technology-, entertainment- and connectivity-related features such as navigation systems, blind-spot detection and hybrid-electric capability, but they are not necessarily willing to pay for them after they see the price tag, according to recent research from J.D. Power and Associates.
For example, the survey of potential new-vehicle buyers in the US found that strong interest in a factory-installed navigation system is at 67% prior to the average market price being revealed, but falls to just 22% after consumers learn it will cost an additional $1,600:


This drop-off in interest appears to be less prevalent in those who buy luxury cars. Among owners of premium vehicles, interest in a navigation system after the price is revealed was higher, at 45%.

Consumers also do not appear to want to settle for something they perceive to be second-rate. Though strong interest wanes when the cost of an on-board navigation system is perceived to be too high, only one-third of consumers who express interest in a navigation system say they are interested in a lower-cost alternative of an off-board navigation system, which enables the driver to provide an address to a live operator and receive text or audible directions without a full-screen map integrated into a display within the vehicle, J.D. Power said.

“While the factory-installed options are considerably more expensive than an off-board navigation system, the price difference is not reflected in a proportionate decrease in consumer interest levels,” said Mike Marshall, director of automotive emerging technologies at J.D. Power and Associates. “Among consumers who express interest in both types of navigation system, seven out of ten indicate they would choose a factory-installed navigation system rather than an off-board version–despite the cost premium.”

Similarly, interest in blind-spot detection technology garnered 70% interest before the $500 price was revealed, and only 14% after.? Hybrid-electric technology fared similarly.? Before consumers knew it cost $5,000 more, 61% were interested.? Only 15% were interested after they learned of the cost premium.

Consumers who are in the market to buy a vehicle soon appear to be better versed in a number of tech and connectivity features than those who have a two-year purchase horizon, J.D. Power said. For example, premium surround sound garners the highest interest rate among these near-term vehicle intenders (72%), while just 61% of consumers who plan on purchasing a new vehicle in two years or more indicate strong interest in this feature.

The study also revealed the following entertainment and connectivity patterns:

  • Among consumers who listen to their portable digital music player in their vehicle, more than one-half use an auxiliary input jack, while approximately 20% use a wireless FM transmitter.
  • Among consumers currently using their vehicle’s Bluetooth functionality, initial interest for a wireless connectivity system in their vehicle is 68%, compared with just 47% among those who have this feature but do not utilize this technology in their vehicle.
  • Nearly two-thirds of consumers would like the ability to listen to a portable digital music player through their vehicle’s speakers, while 27% express a desire to use a smartphone’s music capabilities in conjunction with their vehicle’s audio system.

Separate research from Jacobs Media found that radio-listening US car buyers were more interested in an iPhone connector than in most other technology features.

About the study: The 2009 US Automotive Emerging Technologies Study is designed to measure consumer familiarity, interest and purchase intent for emerging automotive technologies, both before and after an estimated market price is revealed. It is based on survey responses from 19,249 American consumers and was fielded in April 2009.

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