Changes Observed Over Time

A similar iteration of the survey that was administered in 2017 was run in 2013. The 2013 version of the survey asked students 4 additional brand questions and a different set of opinion questions, and yielded 3938 complete responses. Though not identical, the two surveys have overlapping questions, allowing us to analyze some changes and similarities in the students’ knowledge and opinions of the automotive industry over time. The specific areas analyzed were student purchase intent,  Auto IQ, dream cars, and motives for vehicle use.  

We looked to changes in the automotive landscape to explain the changes we saw. Between 2013 and 2017, the auto industry experienced some notable shifts that are evident in the way survey results vary. In 2013, the industry was recovering from the bankruptcy of General Motors and Chrysler. Bankruptcy forced two of the nation’s large automakers to make structural changes. Consumers saw several brands terminated, new industry leadership, and changes to the way government interacted with the industry. The Obama administration put forth a directive that revised Corporate Average Fuel Economy (CAFE) standards. The administration mandated better fuel efficiency, and introduced the Car Allowance Rebate System, also known as ‘cash for clunkers.’ 

More shifts came when new factories opened in the United States during the economic upswing after the 2008 financial crisis. Rising American demand for SUVs and crossovers made manufacturing stateside more appealing for foreign automakers, like Volkswagen and BMW, which respectively opened new plants in Tennessee and increased production in South Carolina. 

Student preference for used cars was a trend that remained stable across the survey iterations. Analysis available in Figure 1 showed that after graduation students intended to purchase used cars at roughly double the rate observed for students who planned to buy new cars. 

Students graduating from college often have tight budgets and will be more price sensitive than older, wealthier car buyers. In our surveys, we noted a statistically significant uptick in Auto IQ, a measure of how well a student understands the auto industry. A more industry literate student will also be more inclined to purchase a used vehicle because they will understand the value issues associated with depreciation. They also will understand that quality issues that once plagued used cars are largely in the past. Consumer reports cites vehicle reliability improvements as an important change to the automotive landscape between 2013 and 2017, describing an improvement in average vehicle problem rates.

Though the students might understand the industry better, their interest in cars themselves declined. In 2013, 48 percent of students had a dream car they aspired to own one day, and in 2017, only 35 percent had such a dream car, as shown in Figure 2.  

Following that trend, in 2013 students’ motives for vehicle use were more aligned with the ‘fun’ aspects of driving related to independence or social status, whereas in 2017 the leading motives for vehicle use were related to practical, instrumental purposes as shown in Figure 3. We asked students about how they may use their vehicles and grouped these questions in our analysis. Question groups were based on their association to either a more instrumental point A to point B, practical use case, or a use case based more on fun, recreational or social aspects of vehicle ownership. In 2017, we observed a more dramatic uptick in the instrumental use case, which can be found in Figure 3. Questions were posed using a Likert scale, meaning a larger figure represents a stronger preference for each use case. 

Further, the industry began to focus on electrification of powertrains, vehicle connectivity, and vehicle autonomy. Vehicle electrification is driven by attitudes around the world that encourage improved sustainability. Tax credits, restrictions on internal combustion vehicle registration, access to parking, traffic perks, and increased interest in EVs contribute to this trend in China, Europe, and the United States. Tesla released its Model S shortly before the 2013 survey was administered. Since then, the company has garnered attention for breathing new life into the auto industry by making appealing, performance-oriented electric vehicles which attract a devout following. 

The survey results brought to life the ‘Tesla Effect.’ Connected, electric, and more advanced vehicle technology became more widespread and desirable between 2013 and 2017. Students voiced this where electric cars were few and far between in 2013, but Tesla was the most frequently named dream car in 2017, as shown in Figure 4.

Tesla cemented its “disruptor” status with its introduction of semi-autonomous features on its vehicles, remote vehicle updates, and online car buying, something few in the industry are able to match, despite major implementations of advanced driver assistance technologies across the industry. Tesla plays at the changes we noticed in motives for vehicle use. Through their unique features, Tesla vehicles address the practical, convenience features, which students are becoming more attracted to, as previously discussed.

The changes we noticed between 2013 and 2017 showed us that the ‘Tesla Effect,’ improved vehicle reliability, and industry consolidation impacted students’ automotive thinking. Students have adjusted their views on the industry to be more aligned with using cars to streamline their lives. Many surveys show young people are more willing to accept autonomous vehicles. They may also dedicate less time to searching for a vehicle by doing more online bargaining and transactions. Recently, online car shopping has taken off, as well as more convenient pricing and delivery options. Tesla holds an advantage in this area because they have deviated from the traditional dealer model and embraced a direct sales model, and they offer service options that include over-the-air updates and mobile repairs. All these point to a future consumer with new values who may choose vehicles based on convenience, reliability, and new technologies.