Brief
|
|
Executive Summary
Over the next decade, the car industry will change in almost every way, from increasing electrification and automated driving support to the growing use of AI in the buying journey and new manufacturers entering the market. In addition, geopolitical challenges are putting growing pressure on both original equipment manufacturers (OEMs) and suppliers, with the industry’s once-global supply chain becoming more regionalized and shaped by tariffs. In addition, car sales in Europe, North America, Japan, and South Korea are still below their 2017 peak. With no meaningful growth in sight, OEMs face tough challenges between substantial overcapacity on one side and price-sensitive customers on the other. Not every car manufacturer will survive this squeeze. Average OEM profit margins were down to around 3% in 2025, leaving limited financial headroom and, for many players, generating returns below the cost of capital. Success and continued survival depend on a deep understanding of what customers want and delivering it better than competitors. Amid these changes, Bain surveyed more than 12,000 car buyers worldwide to understand how customer priorities are shifting and what this means for how OEMs, dealers, and suppliers can successfully adapt and manage this transition. The results are assessed below in four key areas: the customer purchase journey, criteria for buying, electric vehicle (EV) preferences, and autonomous driving (AD). Although some trends, such as the use of AI, span markets and generations, the responses also highlight important and nuanced differences in expectations and desires between regions, age cohorts, and the mass-market and premium segments. The customer purchase journey has transformedOmnichannel is the new standard for car buyers. More than 80% of respondents worldwide follow an omnichannel journey, switching seamlessly between online and offline touchpoints while choosing and buying a vehicle. This figure increases to 95% in China. Importantly, greater use of digital touchpoints does not kill physical ones, even in China, the most digitally advanced of the three major markets. Dealerships remain essential throughout the journey: Nine in 10 respondents worldwide finish their purchase offline, and more than 50% of customers in Europe, the US, and China have two or more dealer interactions along the way. Older buyers (for the purposes of this survey, those born before 1981) have more dealer touchpoints than younger ones during their journey in Europe (60% vs. 48%) and the US (59% vs. 40%), but in China, there is essentially no generational difference (see Figure 1).
Figure 1
Note: Regional averages reflect all survey respondents in that region; generation of respondents defined by birth year (baby boomers: 1949–1964; Generation X: 1965–1980; Generation Y: 1981–1996; Generation Z: 1997–2007) Source: Bain global mobility end consumer survey (n=12,351 2026)Globally, more than six in 10 respondents start the buying process online, but not everyone is comfortable operating in that way. In Japan, 19% of customers carry out the entire journey offline, along with 17% in Europe, 11% in the US, and just 3% in China. Looking ahead, respondents in China are most open to closing car purchases online, with 84% of mass-market and 88% of premium customers saying they would consider it. Customers in the US and Europe are far more reluctant, particularly in the mass-market segment, with 29% of US mass-market buyers and 39% of their European counterparts saying they will never choose this route. Across all regions, AI is revolutionizing the buying journey and increasingly influencing customers’ decision making. This trend is clearest in Asia: In China, close to 80% of respondents across all age groups are using AI during their purchase, with even higher rates in Indonesia as well as among younger buyers in India and the United Arab Emirates (UAE) (see Figure 2).
Figure 2
AI adoption is also picking up strongly in the West, although a generation gap remains. Younger buyers in Europe and the US are more than twice as likely to use AI as older ones, at 61% and 55%, respectively, vs. roughly a quarter of baby boomer and Gen X respondents in each market. Older respondents in Japan are the furthest behind in AI adoption, but younger buyers are roughly on par with those in the US. Buying priorities vary widelyOne of the survey’s most pronounced regional differences is respondents’ selection of their top priority. Price is the No. 1 consideration for most buyers in the US and Europe, at 68% and 62% of respondents, respectively, while the top priority in China is the car’s technology and features, at 58% (see Figure 3). In China, recent price competition among OEMs has pushed prices down substantially, whereas households in the US and Europe remain under financial pressure from the rising cost of living.
Figure 3
The results also highlight a clear contrast between increasingly price-sensitive mass-market buyers and their premium counterparts. In Europe, premium buyers share the same top three priorities as in China: technology and features, followed by brand, and then price. In the US, brand is only slightly ahead of technology (57% vs. 55%), meaning OEMs need to focus on both their brand and on technology and features. In addition to price pressures, mass-market carmakers are dealing with far weaker customer loyalty. In Europe, 35% of mass-market buyers are already open to newer Chinese brands or are indifferent to brand, creating a serious challenge for traditional OEMs. Although the share of premium respondents who would consider new brands is slightly lower, at 29%, this also represents a growing problem for premium OEMs. US customers remain the most committed to established brands, with 79% of mass-market buyers and 72% of premium buyers saying they only considered them during their last purchase. In China, brand relevance is particularly low: 24% of buyers do not care about the brand at all, compared with 14% in Europe and 10% in the US, and domestic brands have the highest appeal. Additionally, some 60% of premium buyers in China are open to multiple brands, including Chinese ones, along with 52% of their mass-market counterparts. Young customers drive interest in BEVsFor EV demand, age is a more relevant differentiator than region, with younger people most interested in battery electric vehicles (BEVs). Around 50% of Gen Y and Gen Z buyers in China, the US, and Europe are open to buying a BEV. Japan is a significant outlier, with fewer than a quarter (22%) of younger buyers willing to choose electric (see Figure 4).
Figure 4
However, in China, where BEVs accounted for 33% of new car sales in 2025, more than 50% of consumers of all ages are open to buying one. Willingness among older generations is far lower in Europe and the US, at just 26% and 22%, respectively, with Japan again the lowest at 10%. Through the survey, Bain sought to understand why some buyers are still reluctant to buy BEVs. Price was the main reason: 63% of respondents in the US and 58% in Europe did not want to pay more for an EV than for a similar internal combustion engine (ICE) model. That compared to 46% in China. This is a challenge for carmakers as the higher costs of making BEVs compared to combustion-engine models means the prices are typically higher. Achieving cost parity will be key to increasing electrified vehicle sales, and OEMs must prioritize ways to reduce prices. Germany offered a preview of how quickly this can shift once price parity narrows: In August 2026, BEV registrations jumped 75% year-on-year to reach around 32% of new car sales. New government incentives and rising fuel prices likely drove that change. It’s too early to tell if the spike is temporary, but it shows how fast BEV adoption dynamics can move. Charging also remains a barrier, with 47% of BEV skeptics saying it takes too long and 43% saying the infrastructure isn’t good enough. Although many early adopters have access to home charging, broader adoption of BEVs will hinge on affordable, convenient charging access for those who cannot charge where they live or work. Bidirectional charging (using their car’s battery to power their home or send power back to the grid) could add value for EV owners in the long term, though the technology and business model are still maturing. One of the clearest and most actionable findings of the survey was the effect of test-driving on BEV adoption. For OEMs and dealers, it is a game changer. Across regions, those who have tested a BEV are up to 2.2 times as willing to consider purchasing one (see Figure 5). Yet mass-market customers in Europe and the US are far less likely to have tried one, at 39% and 28%, respectively, compared with 66% of premium car buyers in Europe and 56% in the US.
Figure 5
For OEMs and dealers, this is a clear opportunity. Making BEV test-drives quick and easy, especially for mass-market customers, could be one of the most effective ways to accelerate adoption. Vehicle autonomy holds strong appeal, but divisions remainA growing share of customers in all regions are interested in buying a car with at least L3 autonomy in the future, even though availability remains very limited. L3 is the term for a privately owned vehicle that can perform most driving tasks within limited conditions but needs a human driver to take over the wheel when prompted. This is distinct from a robotaxi, which is a driverless taxi replacement built on a higher level of autonomy (L4/L5). This interest—and the willingness to pay for it—varies significantly by region. In the UAE, 90% of respondents would consider buying an L3+ car and that number is even higher in India and Indonesia (see Figure 6). In China, 84% of those surveyed would consider buying one. This figure drops to 47% in Europe and 40% in the US.
Figure 6
Figure 6
For traditional OEMs, this presents an unfamiliar challenge. Europe and the US, markets that have historically driven and funded automotive innovation, now show the lowest overall interest in autonomous driving (AD). But a deeper dive into the survey data shows that this gap is largely a mass-market phenomenon: Premium buyers in Europe and the US are far more interested in AD (64% and 59%, respectively) than their mass-market counterparts (39% and 35%, respectively), while in China and other emerging markets, interest is broad-based across both price segments. That gives Chinese OEMs a much wider pool of AD-ready customers to draw on in their home market. The specific risk for premium OEMs in Europe and the US is that customers are far more interested in AD—and are far more willing to switch brands for it—than mass-market buyers (see Figure 7).
Figure 7
In other words, the customers most engaged with AD today are also the ones most likely to switch to a competitor that delivers it better. The stakes are even higher for Chinese OEMs, where intent to change is equally high across both premium and mass buyers. Staying ahead on AD will be critical to acquiring and retaining customers. Keeping pace with changing customer demandBased on these survey responses, key actions for OEMs, dealerships, and suppliers to take include: Get the cost positioning right: Mass-market customers remain particularly price-sensitive in major markets such as Europe and the US. This reality, combined with stagnating demand and production volumes, means that OEMs must continue to improve efficiency, which will require tough operational decisions. Understand that digital elements grab attention, but physical touchpoints remain vital: Across all markets, younger and older generations shop differently, and that gap is likely to widen. However, all customers still rely heavily on physical touchpoints and dealerships not just to close sales but throughout the buying journey—making the in-person elements of purchase as important as digital access. Redesign funnels for the AI-driven buyer: Car buyers are increasingly using AI-related tools to research, short-list, and choose their new car. OEMs and dealers need to ensure their digital channels are optimized for large language models (LLMs) such as ChatGPT so that their vehicles, features, and services show up in AI responses. They also need to fight hard for every customer through the service and value they offer, as brand loyalty is already weakening and AI-driven decision making will accelerate this trend. Overcome known barriers to EV and BEV adoption: Growing interest in BEVs is evident, but readiness varies sharply by region and segment. Offering a good-quality BEV at the right price will be a basic requirement for all OEMs, but they and the wider automotive and transportation ecosystem need to ensure affordable and convenient charging access for customers who cannot charge at home. Ensuring mass-market buyers can take a BEV test-drive is also one of the most effective ways to convert them from ICE models. Compete on value and technology, not brand heritage alone: Brand remains an asset, but OEMs cannot rely solely on this. Price sensitivity is likely to remain high among customers in the US and Europe, and buyers in China are becoming more brand-agnostic. Technology will increasingly be the differentiating feature for buyers. Automotive companies that want to keep up with the transformational changes impacting the car industry need to ensure they are responding to the nuances in buying priorities between regions, age groups, and market segments. Winning in the coming years will only be possible by meeting every group of buyers where they are, rather than attempting to apply a blanket approach. The authors are grateful for the support Alessandro Costanzo and Dhruv Anand provided for this study. |