Environmental Protection Agency 

Fuel Economy Label 

Literature Review 
Environmental Protection Agency 


Fuel Economy Label
 

Literature Review
 

Office of Transportation and Air Quality 

U.S. Environmental Protection Agency 

and 

National Highway Traffic Safety Administration
 

United States Department of Transportation
 

Prepared for EPA by
 

PRR, Inc.
 

EPA Contract No. GS-23F-0364P
 

Task Order 0001
 

EPA-420-R-10-906 

August 2010 
Table of Contents

Executive Summary ............................................................3

I. Introduction and Methodology ........................................13

II. Understanding How Consumers Choose Vehicles..............17

A. The Vehicle Buying Process ..............................................17

B. Sources of Information ...................................................20 

1. Typical Sources of Information ....................................20

2. The Emergence of the Web as an Important 

Information Source ........................................................21

3. Importance of New Web-based Consumer-to-Consumer

Tools and Strategies .......................................................23

4. Green Car Labeling ...................................................24

C. Factors Which Influence Vehicle Choice ............................24

1. Vehicle-related factors ...............................................24

2. The Role of Demographics in Vehicle Purchasing ..........30

3. The Role of Psychographics in Vehicle Purchasing.........32

4. Fuel-Efficient/Low Emission Vehicle Options .................39

5. Importance of Interactions with Customers ...................44

III. Consumer Education Campaigns Regarding

Fuel Efficient Vehicles .......................................................47

A. Evaluation of Existing Consumer Education Campaigns .......47

B. Overview of Existing Social Campaigns Influencing 

Perceptions About Vehicles ..................................................48

IV. Summary of Results and Conclusions.............................53

Attachment 1 - Summaries of Major Studies .......................57

Bibliography.....................................................................75

Literature Review 1
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Executive Summary
�

In 2006 EPA updated how the city and highway fuel economy 

values are calculated to better reflect typical real-world driving 

patterns and provide more realistic fuel economy estimates. In 

addition, EPA redesigned the fuel economy label to make it more 

informative for consumers. The redesigned label more prominently 

featured annual fuel cost information, provided contemporary and 

easy-to-use graphics for comparing the fuel economy of different 

vehicles, used clearer text, and included a web site reference to 

www.fueleconomy.gov which provided additional information. 

EPA and the National Highway Traffic Safety Administration 

(NHTSA) are now initiating a new rulemaking to ensure that 

American consumers continue to have the most accurate,meaningful 

and useful information available to them when purchasing new 

vehicles and that the information is presented to them in clear and 

understandable terms. Further, the agencies must provide metrics 

that are relevant and useful for advanced technology vehicles such 

as plug-in hybrid electric vehicles (PHEVs). 

To help inform the creation of the new label, as well as to inform 

an eventual public education campaign regarding fuel-efficient 

vehicles, EPA engaged PRR to work with them in the design 

and implementation of several information gathering protocols 

including: 

• Literature review 

• Focus groups (in 3 phases) 

• National level online survey of new vehicle buyers 

• Expert panel 

Literature Review 3 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This document presents findings from the literature review that 

PRR conducted. The primary focus of the review was to understand 

how consumers decide which vehicles to purchase and the factors 

that influence their decisions. This information will prove useful 

to informing the label redesign, as well as the planned educational 

campaign to assist consumers to identify more fuel-efficient vehicles. 

PRR assembled and reviewed eighty articles pertaining to topics 

relevant to understanding the consumers’ vehicle choice and 

purchase process. Of the eighty articles reviewed, fifty-five were 

included in this literature review report. (However, all eighty 

articles appear in the bibliography.) 

Understanding How Consumers Choose 

Vehicles 

Several factors were explored to help understand how consumers 

determine which vehicle to buy. These included the decision-making 

process and the sources of information and types of information they 

use. Also of interest were the impacts of such factors as reliability, 

safety, price, and fuel economy in the vehicle purchase process. The 

impacts of consumer demographics and psychographics were also 

noted in the review. Of growing importance is the availability of 

emerging technologies and fuels and how consumers weigh the 

cost, consumption, fuel source and environmental impacts of such 

vehicles against other factors. Literature addressing the importance 

of interactions between the vehicle dealers and consumers and how 

that impacts consumer satisfaction and loyalty was also reviewed. 

The Vehicle Buying Cycle 

The vehicle buying cycle is that period of time between consumers’ 

first contemplation of purchasing a new vehicle and when they 

actually purchase the vehicle. For many consumers, purchasing a 

big-ticket item like a vehicle happens only occasionally and tends 

to be related to other major changes in their lives. This increases 

the anxiety level of the consumer and increases the need for good 

information to drive the decision process (Center for Advancing 

Health, 2009). With the dramatic increase in the type and amount 

of information available to consumers on the Internet, most 

consumers consider more alternatives and make decisions quicker 

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than ever (Center for Advancing Health, 2009). The vehicle 

buying cycle is contracting due to the amount of information that 

consumers are accessing on the Internet. By the time the consumer 

enters the dealership to test drive a vehicle s/he is closer to a final 

purchasing decision than was true in the past. The Internet also 

provides consumers the opportunity to purchase vehicles online 

(annual growth rate of 14.6% in the United States over the past 

five years) which is very attractive to consumers who do not want 

to negotiate with vehicle dealerships. Consequently, influencing 

consumer purchasing decisions increasingly needs to occur prior to 

consumers visiting dealer showrooms. 

Sources of Information 

Consumers gather information from a variety of sources as they 

work their way through the vehicle buying decision-making process. 

Traditionally, information has come from vehicle manufacturers 

and dealers, by word of mouth, and from family and friends, but 

much has changed with the advent of the Internet and the ability 

of consumers to search for information on specific types of vehicles 

and brands. Nearly half of consumers visit a vehicle manufacturer’s 

Web site (Capgemini, 2009a), particularly in search of product 

and price information. Consumers are also increasingly using the 

Internet to access fuel economy information. The Internet also 

serves as a great source of information from those with first-hand 

experience with specific vehicles through reviews and blogs. 

Factors Which Influence Vehicle Choice 

Vehicle related factors 

Consumers differentiate between different makes and models by 

what the vehicles have to offer, and make choices that maximize 

their utility when compared to other available makes and models of 

interest (Garcia, 2007). Even though there has been a tremendous 

growth in the number of vehicle makes and models and vehicle 

features, the most important factors that lead consumers to 

purchase a particular vehicle have remained consistent over time. 

According to Cars Online (Capgemini, 2009a, 2008, 2007), the 

top four factors that consumers continue to claim they value 

when making vehicle purchasing decisions are: reliability, safety, 

price, and fuel economy. This finding is in line with the Deloitte 

Literature Review 5 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2008, 2010) survey findings wherein fuel economy and price were 

reported to be the most important vehicle attributes by consumers 

who were between the ages of 17 and 30 years. 

Vehicle reliability influences consumers’ experience and colors 

their opinion about the make and model of the vehicle, as well 

as the reliability and reputation of the brand (halo effect). No 

matter which vehicles consumers choose to buy, they have high 

expectations that the vehicle will be safe. In fact, many consumers 

are willing to pay more to obtain a vehicle with enhanced safety 

features. While the role of safety in consumers’ decision process is 

yet to be explored in depth in research studies, both the government 

and manufacturers have acknowledged consumers’ increasing need 

for safety in vehicles. 

Vehicle price has become even more critical for consumers because 

of the global economic crisis, which has interested consumer 

interest in purchasing low-cost fuel-efficient cars (Capgemini, 

2009a, 2008). Fuel economy has also become even more critical for 

consumers because of increasing gas prices. Further, fuel economy is 

the top reason why people are opting for fuel-efficient or alternatefuel vehicles (Capgemini, 2009a, 2008). When gas prices go up and 

some feel the crunch in the operating costs of their current vehicle, 

they look for vehicles that have higher fuel efficiency. 

Demographics 

Vehicle purchasing decisions are influenced by consumers’ specific 

needs and situations, but are also influenced by specific consumer 

demographics. Those demographics can include age, gender, 

income, education level, and household size. Each of these factors 

can influence what type of vehicle is likely to meet a consumer’s 

needs. The studies reviewed showed that, not surprisingly, higher 

income families and individuals tend to drive more expensive 

vehicles, larger households tend to drive larger vehicles, and 

households are more likely to drive a minivan the more members 

are under the age of 19 (Choo & Mokhtarian, 2002). 

Deloitte’s 2008 Generation Y survey results found that in regards to 

fuel economy and environmental impact, those with lower personal 

or household income are more likely to rate gas mileage as an 

extremely or very important factor. Women attach more importance 

than men to gas mileage, storage capacity, and environmentally6 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

friendly production, while men tend to be more focused than women 

on leg room and horsepower. In addition, those who have attended 

college are more likely to say that thinking about the economic 

outlook and the relationship with oil-producing countries has a 

strong impact on their vehicle purchase decisions (Deloitte, 2008). 

Finally, concern for the environment, although important, is not 

important enough for most Gen Y consumers to pay a premium for 

a vehicle (Deloitte, 2010; Deloitte/MSU 2010). 

Psychographics 

In addition to demographics, psychographics also influence vehicle 

purchasing decisions. Psychographics are more about providing 

what consumers want than just providing something that they 

need (Assaraf, 2008). It’s about what types of lifestyles they lead, 

what type of images they want to portray, how much and for 

what reasons they travel in their vehicles, and how they view their 

vehicles as an extension of self. Personality and lifestyle play a big 

part in what types of vehicles consumers choose to purchase and 

drive. It is also clear that by knowing more about a consumer’s 

travel attitudes, personality, and lifestyle the better the prediction 

of the type of vehicle that will appeal to that consumer. 

For example, when considering purchasing a vehicle, Gen Y 

consumers (age 17-28) indicated that (Deloitte, 2008): 

•	� A vehicle says a lot about a person’s taste/sense of style (82%) 

•	� When buying a vehicle, I consider how it impacts my 

personal pursuit such as jobs, relationships, and hobbies 

(77%) 

•	� When buying a vehicle, I consider how it reflects who I am 

as a person (67%) 

•	� A vehicle says a lot about a person’s status in society (65%) 

•	� A vehicle says a lot about a person’s values (57%) 

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Fuel-Efficient/Low Emission Vehicle Options 

Consumer demand for green products is growing, and the 

automobile industry is no exception. There is growing awareness of 

fuel-efficient and alternative fuel vehicles, and consumer research 

indicates a growing interest in purchasing more fuel efficient and 

low emissions “greener” vehicles. While there is growing awareness 

of the environmental impact of the automobile, environmental 

concern typically shows up as a secondary factor and is not enough 

on its own to compel consumers to pay a premium in price or 

sacrifice performance for the sake of “being green.” For green 

vehicles to gain widespread commercial acceptance, the cost and 

performance must at least match traditional vehicles. 

In addition, while Generation Y drivers tend to understand the 

environmental benefits of “green” vehicles better than other age 

groups, many feel they lack the information to make good choices. 

They also are concerned about cost and tend to prefer vehicles that 

can provide both economic and environmental benefits. 

A number of other barriers get in the way of consumers purchasing 

electric vehicles. These include: concerns about insufficient driving 

range, the need for specialized infrastructure (such as charging 

stations), battery performance, and doubts concerning the electric 

car’s ecological value. 

Importance of Interactions with Customers 

Also important to a consumer’s decision of what vehicle to purchase 

are the experiential factors that influence consumer loyalty to the dealer 

and/or brand, their satisfaction with the purchase, and their behavior 

after purchase. As the global auto industry struggles to deal with 

the economic downturn and American carmakers try to recuperate 

from a year full of bad news, maintaining a strong customer focus 

becomes essential for survival and good performance. As Accenture 

(2009) in their paper ‘New Places, Faces and Spaces: Customer-centric 

principles for acquiring customers in today’s multi-polar world’ points 

out, the key to negotiating the extreme volatility of the present day 

market is to build customer loyalty to ensure long-term growth. This 

requires dealers to understand their current customer base, work 

hard to engage new customers, develop trust-based relationships 

with customers, and manage customer interactions and transactions 

efficiently. Good service and experiences build loyalty, which results in 

customers returning to the dealership for their next vehicle purchase. 

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Another part of this equation is the transformation of the customerdealer relationship in recent times. With customers having access to 

all sorts of information from the Internet about the vehicles under 

consideration, they gain more of the power in the relationship than 

before. This creates a customer-dealer relationship that is more like 

an interaction between two equal parties. Further, consumers also 

read online reviews and rankings about other shoppers’ experiences 

at the dealership and use these to determine what kind of experience 

they’re going to have at a dealership. 

Consumer Education Campaigns 

The literature review did not find any academic studies on the 

results of education campaigns to encourage consumers to choose 

more environmentally friendly vehicles. Therefore, the focus of the 

information presented is on existing education campaigns, but not 

on their outcomes. For each campaign, a brief description of the 

campaign and a review of key outreach components are presented. 

Conclusions 

This literature review provides a summary of available information 

on the vehicle buying process, information sources used by 

consumers as they shop for vehicles, the factors that influence 

consumer vehicle purchasing decisions, and the impact of the 

increasing availability of “greener” vehicles. It also summarizes 

information on available public education campaigns that address 

the benefits of driving “greener” vehicles. 

The sources used to prepare this literature review were varied in 

their methodologies and carried a variety of limitations as to their 

coverage of the population of U.S. car buyers. It should be noted 

that in spite of the multiple methods used by the major sources, a 

number of similar and consistent results and themes emerged from 

among them. 

The following are a number of key findings that have implications 

for the redesign of the fuel economy label, as well as an educational 

campaign designed to aid consumers’ understanding of more fuelefficient vehicles. 

Literature Review 9 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• The length of the vehicle buying cycle is contracting as 

more and more consumers obtain more information 

sooner from the Internet. By the time consumers enter a 

dealership, many are closer to purchasing a vehicle than 

ever before. The Internet has emerged as one of the most 

important sources of information for consumers interested 

in purchasing a vehicle. To gather information consumers 

can visit manufacturer and dealer Web sites, and rely 

on consumer-to-consumer tools like reviews and blogs. 

Consumers are also increasingly interested in purchasing 

vehicles online. Consequently, information on the 

redesigned fuel economy label that is intended to inform 

them about a vehicle’s performance in regard to several 

metrics (such as fuel consumption, cost, and environmental 

impact) should also be available online to assist consumers 

to find more fuel-efficient vehicles. 

• Considering that in the consumer surveys reviewed 

consumers consistently stated that the most important 

factors that influence which vehicle they purchase are 

reliability, safety, price, and fuel economy (not necessarily 

in that order), the fuel economy label and educational 

campaign will need to acknowledge the place that fuel 

economy plays in the purchase process and identify ways 

to ‘be heard’ as consumers make their decisions. 

• Consumer vehicle purchasing is also influenced by 

individual demographics and psychographics in terms of 

how a vehicle satisfies the practical and emotional needs of 

the consumer. Age, gender, income, household size, urban 

or suburban living, as well as availability of other travel 

options, all play a part in what type of vehicle a consumer 

decides to purchase. But so do the psychographic aspects 

of ‘what a vehicle says about me.’ This suggests that to 

be most effective, the educational campaign should be 

tailored to specific demographic market segments, while 

also making the purchase of fuel-efficient vehicles a ‘cool’ 

statement about the consumer. Acknowledging what 

is important in the vehicle purchase process to specific 

demographic segments, as well as to what consumers think 

of as ‘cool’, can serve as a gateway to getting their attention 

and assisting them to identify more fuel-efficient vehicles. 

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Finally, demographic and psychographic influences not 

only help in understanding the appeal of particular vehicles, 

but also point the way towards potential messaging to help 

consumers make better informed decisions. 

•	� A major challenge will be explaining the functioning of 

advanced technology vehicles to consumers. Overall, 

consumers lack information on “green” vehicles and 

technologies to really understand the differences and be 

able to make comparisons across brands, models, and 

technologies. Identifying easy-to-understand ways to explain 

advanced technology vehicles, how they function, and the 

fuel-efficiency of such vehicles will need to be determined 

before an effective educational campaign can be designed. 

The redesigned fuel economy label will be an important 

starting point for this since it is being designed to effectively 

allow consumers to make informed comparisons among 

vehicle types. 

•	� Lastly, the results of the literature regarding consumer 

education campaigns related to helping consumers 

better understand the benefits of purchasing a more 

environmentally friendly vehicle can serve as an important 

starting point for the agencies’ educational campaign. 

Although it does not appear from the literature that these 

campaigns have evaluated outcomes, they can still provide 

good information, especially if key staff members from 

those campaigns are interviewed to learn about what 

worked and didn’t work from their perspectives. 

Literature Review 11 
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I. Introduction and 

Methodology 

In 2006, EPA updated how the city and highway fuel economy 

values are calculated to better reflect typical real-world driving 

patterns and provide more realistic fuel economy estimates. In 

addition, EPA redesigned the fuel economy label to make it more 

informative for consumers. The redesigned label more prominently 

featured annual fuel cost information, provided contemporary and 

easy-to-use graphics for comparing the fuel economy of different 

vehicles, used clearer text, and included a web site reference to 

www.fueleconomy.gov which provided additional information. 

EPA and the National Highway Traffic Safety Administration 

(NHTSA) are now initiating a new rulemaking to ensure that 

American consumers continue to have the most accurate,meaningful 

and useful information available to them when purchasing new 

vehicles and that the information is presented to them in clear and 

understandable terms. Further, the agencies must provide metrics 

that are relevant and useful for advanced technology vehicles such 

as plug-in hybrid electric vehicles (PHEVs). 

To help inform the creation of the new label, as well as to inform 

an eventual public education campaign regarding fuel-efficient 

vehicles, EPA engaged PRR to work with them in the design and 

implementation of several information gathering protocols including: 

• Literature review 

• Focus groups (in 3 phases) 

• National level online survey of new vehicle buyers 

• Expert panel 

Literature Review 13 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This document presents findings from the literature review that 

PRR conducted. The primary focus of the review was to understand 

how consumers decide which vehicles to purchase and the factors 

that influence their decisions. All articles for this literature review 

were selected with that focus in mind. This information will prove 

useful to informing the label redesign, as well as the educational 

campaign to inform consumers about new vehicle technologies and 

how to use the fuel economy label to compare vehicles within and 

across technologies. 

PRR assembled and reviewed eighty articles and studies to better 

understand how consumers decide which vehicle to purchase and 

what influences those purchasing decisions. Of most interest were 

those articles and studies that provided information from the 

viewpoint of the consumer. Because of the speed at which trends are 

evolving, most of the sources selected for inclusion were published 

between 1995 and 2010. The sources span a broad range of books, 

articles, papers, and secondary research reports. Data presented are 

primarily taken from business, marketing, and academic journals 

and magazines; Web sites; newspapers; conference proceedings; 

and published government guidelines, standards, and documents. 

From the eighty articles reviewed, fifty-five were included in this 

literature review report. 

The major sources used in this literature review are summarized in 

Attachment 1 to this report. These summaries provide information 

on purpose, methodology, results and relevance to this literature 

review. As noted in Attachment 1, the sources used were based on 

varying methodologies. Also noted is that all sources are based on 

research from the U.S., except for the Capgemini studies which 

include information from a variety of countries. Even with their 

varying methodologies, several themes emerged that were consistent 

across many of the sources reviewed and are presented in the 

literature review. When appropriate, methodological limitations are 

noted in the text of this report and are also noted in Attachment 1. 

This report was purposely written in a reader-friendly style that 

summarizes the key findings in a format that will be useful to a 

variety of audiences. In particular, the review provides the following 

information: 

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•	� Decision-making process used by consumers 

•	� Sources of information and types of information consumers 

use to make their decisions: 

•	� Typical sources of information 

•	� Emergence of the Web as an important information 

source 

•	� New Web-based Consumer-to-Consumer tools and 

strategies 

•	� Online buying 

•	� Factors that influence vehicle choice, including: 

•	� Vehicle specific factors such as reliability, safety, price, 

and fuel economy 

•	� Consumer demographic and psychographic influences 

on vehicle purchases 

•	� Availability of green vehicles and how consumers 

weigh the environmental advantages of purchasing 

green vehicles against all other factors they consider 

when deciding which vehicles to purchase 

•	� Importance of interactions between the vehicle dealers 

and consumers, and how that impacts consumer 

satisfaction and loyalty 

•	� Education campaigns that have been used to encourage 

consumers to make more environmentally friendly choices 

when buying vehicles 

The APA citation style was used in this report to acknowledge 

the sources used in its preparation. The sources cited in the body 

of the report appear alphabetically at the end of the report (see 

Bibliography) and hyperlinks to full articles have been included for 

these sources in the bibliography for easy access and retrieval. 

Literature Review 15 
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II. Understanding How 

Consumers Choose Vehicles 

To better understand how consumers determine which vehicle to 

buy, a variety of factors were examined. The review started with 

the decision-making process used by consumers and the sources 

of information and types of information they use to make their 

decisions.The review then looked at the factors that influence vehicle 

choice including vehicle specific factors like reliability, safety, price, 

and fuel economy. Also considered was how individual consumer 

demographics and psychographics influence vehicle purchases. Of 

growing importance is the availability of green vehicles and how 

consumers weigh the environmental advantages of purchasing a 

green vehicle against all other factors they consider when deciding 

which vehicle to purchase. Lastly, the importance of interactions 

between the vehicle dealers and consumers and how that impacts 

consumer satisfaction and loyalty was considered. 

A. The Vehicle Buying Process 

The vehicle buying process is that time between when consumers 

first contemplate purchasing a new vehicle and when they actually 

purchase the vehicle. For many consumers purchasing a big-ticket 

item like a vehicle happens only occasionally and tends to be 

related to other major changes in their lives. The primary reasons 

that consumers start considering the purchase of a new vehicle 

are mechanical problems with their existing car, or the appeal of 

a new car or particular car feature (Capgemini, 2005). With the 

dramatic increase in the type and amount of information available 

to consumers on the Internet, most consumers consider more 

alternatives and make decisions quicker than ever. 

Literature Review 17 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the past,studies haveshown that the typical process used by consumers 

was composed of several distinct phases known as the purchasing 

funnel. First developed over a hundred years ago, the purchasing funnel 

is used to describe how consumers narrow choices as they move from 

awareness, to opinion, to consideration, to preference, to purchase. For 

vehicles, the purchasing funnel illustrates how consumers narrow their 

vehicle choices as they gather information and make judgments at each 

stage (Chatterjee, Jauchius, Kaas, Satpathy, 2002). 

How consumers purchase vehicles has evolved with the increased 

use of the Internet to gather information about potential choices. 

Historically, consumers have started out considering six or seven 

different vehicles which they refine down over time to one or two 

vehicles they will go test drive (Clift, 2006). New studies by CNW 

Research have shown that about halfway through the decision 

process, consumers may add new vehicles for consideration as they 

are exposed to additional information through their searches on 

the Internet. Other important pieces of information available to 

new vehicle purchasers are reviews from current owners that may 

influence new vehicle buyer opinions and considerations (Clift, 

2006). This creates a decision process that is not always as linear 

as that illustrated by the purchasing funnel. Although consumers 

may go back and forth among the steps of the purchasing funnel, 

it is clear that consumers must first be aware of the various vehicle 

options before they can form an opinion, and they must have a 

positive opinion of a vehicle option before they will consider it and 

decide to gather more information to narrow their choices to make 

a decision (Henry, 2008). 

For many consumers, once they have narrowed their selection to a 

few vehicles, they visit a dealer with the intention of going for a test 

drive. Armed with additional information from the Internet (as well 

as other sources) before they enter an automotive dealership to look 

at and potentially test drive a vehicle, it is now more difficult than 

in the past to influence a consumer’s decision on which vehicle they 

will ultimately purchase once they are at the dealership. Consumers 

are also able to more quickly reach a decision of whether or not 

to purchase a particular vehicle once they make the decision to 

take a test drive. They then gather additional information to make 

a final decision on which to purchase. At this point, other factors 

can influence the decision making process including vehicle pricing, 

the value of a trade-in, financing options, and how the consumer 

is treated by the dealership (Center for Advancing Health, 2009). 

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As the duration of the vehicle buying cycle contracts through the use of the 

Internet, automotive companies have less time to influence purchases. Based 

on results from its annual surveys of consumers interested in purchasing 

a new vehicle, Capgemini concluded that what used to take six months, 

may now only take four months. When a consumer is finally ready to 

visit a dealership, they are much closer to making a purchase than they 

likely were in the past. Consumers go to dealerships when they feel they 

have enough information on what they want to purchase and how much 

they want to pay to be able to negotiate. They gather more information 

through research on the Internet and visit fewer dealerships than in past 

years before making a vehicle purchase (Capgemini, 2009a). Based on a 

Capgemini’s 2009 customer survey of 3,000 persons interested in buying a 

new vehicle, more than two-thirds of the respondents stated that they began 

gathering information two to four months before they planned to purchase 

a vehicle, and 60% visited a dealership for the first time within two months 

of purchasing a vehicle (Capgemini, 2009a). 

The Internet also provides consumers the opportunity to purchase vehicles 

online which is very attractive to consumers who do not want to negotiate 

with vehicle dealerships. Online sales volumes have increased at an annual 

growth rate of 14.6% in the United States over the past five years (Deloitte, 

2009). In a 2009 Capgemini consumer survey, 21% of U.S. consumers 

said they were likely to purchase a vehicle online. This is up from 17% 

the previous year (Capgemini, 2009a). Yet, online sales only represented 

represent 4% of total car sales in the United States in 2009 (Deloitte, 2009). 

Price discounts, avoiding in-person interactions and price negotiations with 

a dealer, and ease and speed of the transaction were cited as the top reasons 

to purchase a vehicle online. The primary barrier to purchasing online cited 

by respondents is the inability to test drive a vehicle. Other barriers cited 

by respondents include not being able to see photos or video of the vehicle, 

inability to access accurate and complete product and pricing information, 

unsuitable interface to negotiate on pricing with dealers, concerns about 

delivery, and lack of integration with related services such as financing and 

insurance (Deloitte, 2010; Capgemini, 2009a). There is also strong interest 

in buying parts and accessories online, primarily as a means to find lower 

prices as an alternative to the traditional dealer model (Capgemini, 2009a). 

Overall, online buying is increasing, but it is unclear if there will be large 

scale adoption of the Internet as a sales channel. 

Literature Review 19 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B. Sources of Information 

Consumers gather information from a variety of sources as they 

work their way through the vehicle buying decision-making process. 

Traditionally, information has come from vehicle manufacturers 

and dealers and by word of mouth. Much has changed with the 

advent of the Internet and the ability of consumers to search for 

information on specific types of vehicles and brands. The Internet 

also serves as a great source of information from those with firsthand experience with specific vehicles through reviews and blogs. 

Access to all this additional information has allowed consumers 

to make quicker and more informed decisions once they visit a 

dealership. 

1. Typical Sources of Information 

In the past, vehicle buyers relied on information from manufacturers, 

dealers, third-parties, classified ads, family and friends. More 

recently, vehicle buyers have started to gather information from 

the Internet (Center for Advancing Health, 2009). There is evidence 

that consumers gather information and conduct research prior to 

visiting vehicle dealerships (Nye, Greene, Hopson, and Saulsbury, 

2003), although when particular types of information are accessed 

in the purchase process was not identified in the literature cited 

above. A 2009 consumer survey by Capgemini of more than 

3,000 potential car buyers (consumers planning to purchase a car 

in the next twelve months) in eight countries revealed internetbased information sources were most popular with consumers in 

the United States and Western Europe, including dealer Web sites 

(52%), manufacturer Web sites (50%), search engines (48%), and 

information Web sites (42%). However, consumers still use and 

value more traditional sources of information, such as friends 

and family (45%), independent car valuation services (38%), 

manufacturer-specific franchise dealers (34%), and used car dealers 

(28%). Just 16% of consumers indicated they used television 

advertising and auto shows as information sources in the carbuying process (Capgemini, 2009a). 

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2. The Emergence of the Web as an Important 

Information Source 

The Internet has become a standard information source for vehicle 

buyers. It has grown steadily over the past several years, from 

approximately 65% of U.S. consumers in 2005 using the Web to 

access vehicle information, to nearly 90% in 2009 (Capgemini, 

2009a). The typical web usage pattern is that consumers start 

their research with search engines, then move to manufacturer and 

dealer sites, and finally to consumer-to-consumer (C2C) tools like 

web forums; blogs; RSS (Really Simple Syndication) feeds, which 

is a news and blog content syndication tool; and discussion sites 

(Capgemini, 2009a). New car buyers report spending nearly seven 

hours conducting online research to inform their decision: 47% of 

new vehicle buyers using the internet in the buying process visit an 

independent site when initiating the research for their new vehicle, 

and 46% visit a manufacturer website while conducting their 

online research (Center for Advancing Health, 2009). 

It appears that consumers seek out the information sources that 

provide useful data on the attributes that they care about, and 

that those attributes of interest vary widely (Center for Advancing 

Health, 2009). The Centers for Advancing Health cites a J.D. 

Powers and Associates survey in which shoppers describe using 

independent, third-party sites such as Kelly Blue Book, Edmunds, 

and Consumer Reports for researching vehicle pricing, ratings, and 

reviews; manufacturer Web sites for information about vehicle 

model options, features, and specifications; and dealer sites for 

inventory information (Centers for Advancing Health, 2009). 

Research conducted by the EPA in collaboration with PRR provides 

additional insight into where consumers obtain information on 

fuel economy. Thirty-two focus groups were conducted between 

February 25 and May 27, 2010 in the cities of Seattle, Chicago, 

Houston and Charlotte. The participants were asked to complete an 

online survey before they took part in the focus group discussions. 

The findings from this pre-group online survey indicated that twothirds (67%) of the respondents used manufacturers’ websites to 

search for information on fuel economy. The other sources that 

participants reported searching for fuel economy information were: 

fuel economy label on vehicles (60%), Consumer Reports (51%), 

Edmunds.com (31%), auto dealers (30%), asking those who 

had similar vehicles (29%), auto magazines (e.g., Car & Driver, 

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Road & Track, Motor Trend; 30%), Edmunds.com (30%), auto 

dealers (25%) and Government websites (e.g. fueleconomy.gov, 

EPA Green Vehicle Guide; 17%). The sources of information that 

were less popular included television ads (12%), environmental 

organizations (4%), newspapers (4%) and radio ads (2%). The 

survey also found that close to three-fourths (72%) considered EPA 

as a trusted source of information on fuel economy (PRR – PreFocus Group Online Survey Report, 2010). 

The most important Web site features to consumers are price 

and product information, and the ability to compare vehicles. 

Consumers have consistently ranked these as the most important 

Web site features for several years. Less important Web site features 

include dynamic graphics, (such as video or eye-catching graphics), 

the ability to check dealer inventory, and online information about 

the latest ads and promotions (Capgemini, 2008, 2009a). While the 

use of the Internet does not appear to preclude consumer use of 

the dealer or word of mouth to gather information, there is some 

indication that consumers are substituting Internet research time for 

time spent at dealerships. In addition, print advertising is becoming 

less influential as the Internet becomes more useful and widely used 

(Center for Advancing Health, 2009; Capegemini, 2006, 2007). 

It also appears that the presence or lack of desired Web site features 

can impact consumer buying decisions. For example, a 2008 

Capgemini consumer survey of more than 3,100 car buyers in eight 

countries revealed that more than three-quarters of respondents 

said that “having the [web] features that matter to them would 

make them more likely to purchase a vehicle from that company,” 

and “more than half said that if the features they care about are not 

available they would be less likely to buy from that company.” This 

pattern was found to be consistent across all markets included in 

the survey (Capgemini, 2008). 

Consumers increasingly use the Internet to access fuel economy 

information.Usage of the DOE and EPAWeb site,www.fueleconomy.gov, 

increased from 400,000 user sessions in 1999 to more than 30 

million user sessions in 2008. Based on web traffic, the four most 

popular features of the fueleconomy.gov website are: 1) Find-a-car, 

which allows consumers to compare up to four vehicles in terms 

of fuel economy, fuel cost, greenhouse gas emissions, and energy 

security; 2) “Your MPG,” a feature that allows users to share real22 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

world MPG experience with others; 3) driving and maintenance 

tips to help drivers maximize fuel economy; and 4) MotorWeek 

Fuel Economy, which features public television programming to 

provide consumers with information about fuel economy and 

alternative fuel vehicles (Greene, Gibson, Hobson, 2009). 

3. Importance of New Web-based Consumer-to-Consumer 

Tools and Strategies 

Many consumers who use the Internet to gather information 

prior to going to a dealer showroom use consumer-to-consumer 

(C2C) tools after researching vehicles online with search engines 

and manufacturer and dealer Web sites (Capgemini, 2009a). C2C 

tools include automotive blogs, forums, discussion groups, video 

sites and RSS feeds, and allow consumers to gather supplemental 

qualitative information including consumer opinions on and 

reviews about specific car brands. Consumers also may use C2C 

tools to engage in a two-way dialogue with automotive experts 

and other consumers and to receive news about new vehicles and 

information about vehicle recalls (Capgemini, 2008, 2009a). 

Interestingly, a 2009 Deloitte survey of 1,100 Gen Y consumers 

(randomly drawn from a panel of individuals who agreed to 

participate in online surveys) found that the majority of Gen Y 

consumers (64%) do not get their information on a vehicle brand 

or model from social networking sites, despite this group’s high 

rate of social media use for general communication. Further, more 

than half (58.2%) do not look for vehicle advice on blogs or other 

social media forums. Instead, the majority (79.9%) rely on search 

engines such as Google or Yahoo! for information on a specific 

vehicle (Deloitte, 2010). 

However, there is some evidence that C2C tools may influence 

buying decisions. A 2009 Capgemini consumer survey revealed 

that more than two-thirds of consumers said they would be more 

likely to purchase a particular vehicle or buy from a certain dealer 

if they found positive comments posted on blogs and web forums 

about the vehicle or dealer. In addition, approximately 57% of 

respondents said they would be less likely to buy a particular make 

or from a specific dealer if they found negative comments on these 

kinds of sites (Capgemini, 2009a). 

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4. Green Car Labeling 

While the Internet is one resource consumers are increasingly 

using to look for fuel economy estimates when researching and 

comparing vehicles, well designed eco-labels can also be useful 

in providing fuel economy information to consumers (Teisl & 

Rubin, 2008). In addition, participants in focus groups conducted 

in Maine in 2004 stated that they get much of their information 

on vehicles on-line, and while they would like to have more 

information about environmental factors on the vehicle label, most 

had made their vehicle purchasing decision before they visited a 

dealership and were exposed to eco-labeling on the vehicle (Teisl 

& Rubin, 2004). In their “Green Car Labeling” study, Northeast 

States for Coordinated Air Use Management (2003) interviewed 

658 individuals 25 years or older that lived in the Northeast region 

of the U.S who had purchased a vehicle in the last two years, or 

planned to purchase a vehicle in the next two years. They found 

that one-half of these individuals thought that knowing about 

vehicle emissions was highly important when purchasing a vehicle. 

In addition, four out of 10 of these individuals stated that if the 

information was readily available, they would be highly likely to 

consider emissions in their next vehicle purchase. A key finding 

from this study was that the importance of emissions in their 

vehicle purchasing decision increased when emissions information 

was available, with three-quarters of the people interviewed stating 

they were in favor of green car labeling and that they would be 

moderately or highly likely to use the information on the label in 

their next vehicle purchase. 

C. Factors Which Influence Vehicle Choice 

1. Vehicle-related factors 

As Garcia (2007) has pointed out, automobiles have traditionally 

been thought of as bundles of attributes desired by consumers. 

Consumers tend to differentiate between different makes and 

models by the various attributes they offer. They make choices 

among various makes and models to maximize their utility by 

choosing the make and model considered superior compared to all 

other available choices. 

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Even though there has been a tremendous growth in the number 

of vehicle makes and models that offer a plethora of vehicleattribute combinations to consumers, the most important factors 

that lead consumers to purchase a particular vehicle have remained 

consistent over time. According to Cars Online (Capgemini, 

2009a, 2008, 2007), reliability, safety, price, and fuel economy (not 

necessarily in that order) are the top four factors that consumers 

have consistently stated they focus on when it comes to making 

their final decision about which vehicle to buy. 

a. Vehicle reliability and reliability of brand 

The value that reliability plays to both manufacturers and consumers 

is of interest to both consumer researchers and practitioners. In 

general, consumers consider a vehicle to be reliable if it is likely to 

have fewer problems than other vehicles even as it ages (Consumer 

Report, 2010). Vehicle reliability has been found to have a positive 

impact on the consumers’ likelihood of choosing a vehicle (Woods, 

2010; Scordo, 2009; Dangol, Jitpaiboon & Walters, 2007; Train 

& Winston, 2007). The benefits that consumers see in buying a 

vehicle with high reliability include lower costs of repair and 

higher resale value. Therefore, consumers are likely to be concerned 

about vehicle reliability when researching their upcoming vehicle 

purchase (BuyingAdvice.com, 2007). 

While reliability in simple terms may be thought of as how well a 

vehicle is likely to run without expensive maintenance and repair 

over time, it has far reaching impacts on brand reputation. Based on 

how reliable consumers consider the vehicle model to be, a brand 

halo kicks in whereby consumers build opinions about the vehicle 

make, brand reliability and manufacturer’s reputation. Such a halo 

effect can have serious positive implications for consumers’ future 

vehicle purchase. A recent research study by Capgemini (2009a) 

found that an increasing number of consumers were growing brand 

loyal and were more likely to purchase the same make/brand as 

their current vehicle. 

Research has found that because a new vehicle’s reliability is not 

available at the point of purchase, the reliability history of the 

model (measured based on the number of repairs reported by the 

owners of such model), and brand reputation play an important 

role in consumers’ evaluation of a new vehicle (Betts & Taran, 

2004). Further, when such a reputation is backed by trusted and 

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widely-cited publications such as Consumer Reports, Edmunds 

publications and other reviews, it has a major impact on consumers 

with regard to their purchase decision (Train & Winston, 2007; Betts 

& Taran, 2004). For example, foreign automakers have developed 

a reputation for building highly reliable cars as compared to 

American carmakers (Woods, 2010; Dangol, Jitpaiboon & Walters, 

2007; Train & Winston, 2006; Nichols & Fournier, 1999). This 

has resulted in the declining market share of U.S. automakers who 

have not gained the reputation for improved vehicle reliability as 

compared to Japanese and European manufacturers (BuyingAdvice. 

com, 2007; Train & Winston, 2006). 

b. Safety 

Consumers also continue say that they consider safety to be one 

of the most important considerations in buying a new or used 

vehicle (Consumer Reports, 2010, 2008; Capgemini, 2009a, 

2008, 2007, 2006; Deloitte, 2008; BuyingAdvice.com, 2007) and 

research vehicle safety performance ratings before purchasing a 

vehicle (Harris, 2001). In addition, consumers say that they are 

increasingly seeking safety features in their vehicles (Deloitte, 2010) 

and are willing to pay more for a vehicle to obtain improved safety 

levels (Harris, 2001). A U.S. national automotive consumer study 

of 2,160 respondents (who qualified as future new or used vehicle 

buyers) in 2003 (TRW Automotive, 2003) found that consumers 

had progressively increased their rating of the importance of safety 

features such as smart airbags, vehicle stability control and antirollover systems as compared to how they rated safety systems 

in 1998. Further, findings from a recent Deloitte survey (Deloitte, 

2009) based on 991 U.S.-based Deloitte U.S. employees1 indicated 

that U.S consumers are willing to pay a premium for safety features 

and options such as skid control, telematics, safety devices (such as 

back-up sensing systems, electro-chromatic mirror/auto dimming 

mirrors, energy-absorbing steering system, head restraints, padded 

kneed bolster, etc.), and blind spot mirrors. The Deloitte study also 

predicted that the current economic crisis will leave customers 

to value vehicle safety more than before and seek vehicles with 

enhanced safety features. 

Consumers’ increasing demand for safety has led manufacturers 

to think and develop safety-related innovations and features 

(such as automatic crash notification, emergency assistance, and 

remote vehicle diagnostics) in their recent models (Deloitte, 2009; 

1 Because the study was based 

on a convenience sample of 

Deloitte U.S. employees, it may 

not be representative of the 

U.S. auto consumer population. 

Further, it should be noted 

that intended behavior (i.e., 

consumers’ willingness to pay 

more for safety features) may 

not necessarily translate into 

actual purchase behavior. 

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Dannenberg & Burgard, 2007). Yet, due to cost, many vehicle safety 

improvements were not universally implemented until mandated by 

the U.S. National Highway Traffic Safety Administration (NHTSA). 

Most recently, NHTSA has introduced a proposal to mandate 

Electronic Stability Control (ESC) on all passenger vehicles by the 

2012 model year (Consumer Reports, 2009). According to NHTSA 

(2010), ESC will reduce single-vehicle crashes of passenger cars by 

34% and single vehicle crashes of sport utility vehicles (SUVs) by 

59%, with a much greater reduction of rollover crashes. NHTSA 

also estimated that ESC will save 5,300 to 9,600 lives and prevent 

156,000 to 238,000 injuries in all types of crashes annually once 

all light vehicles on the road are equipped with ESC. 

c. Vehicle price 

Vehicle price is also one of the top considerations that heavily 

impact consumers’ vehicle purchasing decisions (Deloitte, 2009, 

2008; Capgemini, 2009a, 2008; Consumer Reports, 2009). In 

most cases, consumers want to buy a vehicle that they can afford 

without compromising much on other important factors such as 

reliability and safety. They also want a vehicle that fulfills their 

emotional and functional needs. For example, people are drawn 

to the BMW as “the ultimate driving machine,” though they may 

choose a model with a small engine and automatic transmission. 

While previous research has shown that consumers do not always 

seek the absolute lowest price while purchasing a vehicle (Root, 

2008), it is important to remember that the current economic crisis 

has impacted consumer behavior with regard to vehicle pricing. 

Vehicle price has become even more important than before the onset of 

the global recession. Based on a recent survey, Deloitte (2009) predicts 

a critical shift in auto consumers’ purchase priorities as customers 

seek value in the form of cheaper and more efficient vehicles. While 

research is yet to substantiate such a shift, recent studies have found 

another significant shift with regard to vehicle price. Consumers are 

increasingly using the Internet to search for vehicle pricing information 

(Consumer Reports, 2009) and are wanting to buy new vehicles online 

as an alternative to the traditional dealer model (Capgemini, 2009a). 

Research has also shown that the Internet has lowered vehicle 

prices by informing consumers about dealer invoice prices and 

thereby enabled consumers to negotiate lower prices (Zettelmeyer, 

Morton & Silva-Risso, 2005). 

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d. Fuel economy 

Research has shown that fuel economy is one of the top factors that 

consumers report influence which vehicle they choose (Deloitte, 

2009, 2010; Capgemini, 2009a, 2008, 2007). It has become even 

more critical in the minds of U.S. consumers in their final vehicle 

purchase decisions because of the volatile changes in gasoline prices 

in 2007 and 2008 (Deloitte, 2008; Capgemini, 2008). 

Not surprisingly, concern about fuel prices has resulted in 

consumers’ increased interest in more fuel-efficient or alternativefueled cars. Research studies by Capgemini (2009a, 2008, 2007) 

have found that more than environmental concerns, fuel economy 

is the leading driver behind consumers buying fuel-efficient or 

alternative-fuel vehicles, with 83% of respondents reporting fuel 

economy was important/very important in 2007. This figure rose 

to 90% in the 2008 and 2009 surveys. Studies further found that 

women, lower income households, younger consumers, non-white 

purchasers, and buyers in more densely populated areas attached 

more importance to fuel efficiency in vehicles compared to others 

(Deloitte,2008; McCarthy & Tay, 1999). 

While fuel economy has been discussed in the past (especially during 

times of decreased fuel availability such as during the oil crisis of 

1973), only a few studies have attempted to explore it in depth. 

In one such study, based on interviews with 57 U.S. households, 

Turrentine & Kurrani (2006) attempted to determine how U.S. 

consumers think and behave with respect to automotive fuel 

economy. They found that there is no systematic way in which auto 

consumers analyze fuel economy in their automobile or gasoline 

purchases. Most consumers simply look at the cost of their last 

tank of gas and the unit price of gas on that day, and then forget it. 

As a result, they do not optimize their fuel economy decisions, and 

make large errors when asked to estimate their gasoline costs and 

savings over time. 

As the price of gasoline increases, consumers feel the impact on 

the operating cost of their vehicle and look for vehicles that meet 

higher fuel efficiency standards. The more the consumers are 

concerned about fuel efficiency, the more they search for vehicles 

that meet their expected fuel economy expectations (McCarthy & 

Tay, 1999). 

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In addition, there is a body of research that uses vehicle choice 

modeling to help determine the role of fuel economy in consumer 

vehicle purchasing decisions. In Helfand and Wolverton’s 2009 

review of this research, they determined that while this modeling 

is a valuable tool for regulators, there are wide variations in 

how these studies estimate the value that consumers place on 

fuel economy, that consumers tend to under-value the benefits of 

greater fuel economy and that consumer willingness to pay for fuel 

economy does not equal the expected value of the fuel savings. 

They conclude that more research is needed on how to model the 

role of fuel economy on consumer vehicle purchasing decisions 

(Helfand & Wolverton, 2009). 

e. Other vehicle related factors 

Apart from the above discussed factors, studies have documented 

other factors that influence consumers’ vehicle purchase decisions. 

In their 2007 survey, based on 2,600 consumers across five countries 

(United States China, France, Germany, and United Kingdom), 

Capgemini documented the following factors as being very important 

to consumers in their vehicle purchase decisions. Ranked in order of 

stated importance: reliability of brand, safety, price of vehicle, fuel 

economy, quality of interior/style, after-sales service, brand name of 

vehicle, products and services, extra options at no extra cost, vehicle 

availability, sales/delivery date, trade-in value, environmental factors, 

product/feature options, ability to research information on Internet, 

0% or low financing, additional warranty coverage/service credit, and 

cash-back incentives. As a follow-up, Capgemini conducted surveys 

in 2008 (with 3,100 consumers across eight countries- United States, 

Brazil, China, France, Germany, India, Russia, and United Kingdom) 

and 2009 (with 3,000 consumers across the same eight countries) with 

similar results, although there were some minor changes in the order 

in which these factors were rated by respondents. A few novel factors 

did emerge as important in these two surveys, including ‘Hybrid or 

other alternative-fuel cars’ (in the 2008 survey as well as the 2009 

survey), treatment by the manufacturer during my previous ownership 

cycle (in the 2009 survey) and treatment by the dealer during my 

previous ownership cycle (in the 2009 survey). The 2008 and 2009 

surveys revealed that consumers in developing markets (Brazil, China, 

India, and Russia) were more likely than consumers in mature markets 

(France, Germany, United States, and United Kingdom) to rate factors 

such as additional warranty coverage, cash-back incentives, and 

product feature options as important factors in choosing a vehicle. 

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In their 2008 Generation Y study, (based on a random sample 

survey of 1,006 people between the ages of 17 and 28), Deloitte 

reported the following factors to be the most important in 

vehicle purchase decisions (in order ranked most important): gas 

mileage, affordability, performance, leg room, exterior styling, 

low emissions, quiet interior, storage, interior look, ‘company is 

a good corporate citizen’, technology, intelligent settings, wheels, 

horsepower, environment-friendly factory, manual transmission, 

and latest model on the market. 

As a follow-up to their 2008 survey, Deloitte (Deloitte, 2010) 

conducted another survey (based on a similar random sample 

survey of 1,100 people between the ages of 18 and 30 years). This 

survey found the following factors to be the top factors that were 

critical to respondents’ vehicle purchase decisions (in order ranked 

most frequently): gas mileage, affordability, exterior styling, interior 

room, power locks and windows, air conditioning/heat, safety, CD 

player, reliability, and automatic transmission. 

2. The Role of Demographics in Vehicle Purchasing 

Vehicle purchasing decisions are influenced by consumers’ specific 

needs, situations and demographics. Those demographics can 

include age, gender, income, education level, and household size. 

This section presents three examples of how these factors might 

affect vehicle purchases. While they may not be indicative of how 

the overall population makes vehicle purchasing decisions, they do 

show how demographics can influence people’s decisions. 

a. Demographics and vehicle type 

One large study (Choo & Mokhtarian, 2002), based on a randomly 

selected mail survey of 1,904 residents in three neighborhoods in 

the San Francisco area, provides some interesting insights into what 

types of consumers drive what types of vehicles. The neighborhoods 

covered by this survey were both urban and suburban and included 

a variety of ages, income levels, and household sizes. The survey 

specifically asked individuals about the vehicle they primarily drive. 

It found that with all other things being equal, the more a vehicle 

costs, the less likely it is to be purchased. It also found that higher 

income families and individuals are more likely to drive more 

expensive vehicles such as luxury cars and SUVs. In addition, the 

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more members there are in a particular household, the more likely 

that household will drive a larger car. In fact, the greater the number 

of people under the age of 19 in a household the more likely that 

household is to drive a minivan. Yet, there were also some large 

households with lower incomes that drive small cars. 

In terms of age, younger drivers are more likely to drive a small car, 

a sports car, or an SUV. Drivers over the age of 65 are more likely to 

drive a larger luxury car than any other vehicle type. Homemakers 

and retired people tend to drive larger more comfortable cars like 

minivans or luxury cars. In general, pickups and large cars tend to 

be driven by less educated drivers, and females are less likely to 

drive pickups than any other vehicle type. Those that live in urban 

settings are more likely to drive small and luxury cars. 

b. What about Generation Y? 

Much recent research has been conducted by Deloitte on Generation 

Y consumers. This includes those individuals born in the late 

1970s and the 1980s. People included in this generation have lived 

their entire lives during the environmental movement and with 

availability of personal computers. Much of this research is trying 

to address how this particular age group views sustainability and 

gathers information when it comes to purchasing a vehicle. 

One study partially based on this data (Deloitte, 2010) found that 

Generation Y says they consider the impact of their purchases on 

the environment when shopping for a vehicle. However, many stated 

that were not willing to pay a premium for a more environmentally 

friendly vehicle. Therefore, to be successful, manufacturers must 

provide both an economic and environmental value for Generation 

Y consumers to adopt emerging sustainable technologies. Additional 

findings based on these survey results (Deloitte, 2008) found that 

respondents with lower personal or household income were more 

likely to rate gas mileage as an extremely or very important factor. 

Women attached more importance than men to gas mileage, storage 

capacity, and environmentally-friendly production, while men were 

more focused than women on leg room and horsepower. In addition, 

those who had attended college were more likely to say that thinking 

about the economic outlook and the U.S. relationship with oilproducing countries had a strong impact on their purchase decisions. 

From Deloitte’s 2009 survey (Deloitte, 2010), respondents indicated 

that the top three options or features that a vehicle must have and 

Literature Review 31 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

are “critical to your vehicle purchase decision” were: gas mileage, 

affordability/price, and exterior styling/looks. The respondents also 

had some strong feelings about the end of the purchasing process 

and a majority stated that they would prefer to test drive a vehicle 

for 24 hours (69%), know the final price upfront (85%), purchase 

the vehicle without negotiating with a salesperson (60%), and not 

have to haggle over the price of the car (62%). 

c. Needs of older drivers 

Based on U.S. Census data, in 2005 there were 50 million people 

aged 60 and above, and it’s estimated that that amount will increase 

to 75 million by 2020. That translates into one in five people being 

age 60 and above by 2020. This group also has the greatest amount 

of disposable income of any age group. To appeal to this group, 

products need to be designed to address their changing physical 

needs (Deloitte, 2005). For example, when Ford realized that driver 

fatality rates were higher for drivers past 50, they decided to design 

cars that increase occupant safety for older drivers including crash 

avoidance, crashworthiness, and post crash assistance. To help them 

understand the physical limitations and experiences of older drivers 

they designed the Third Age Suit, which engineers can use to evaluate 

mobility strength and vision limitations of someone 50 years and 

older. The suit adds bulk, restricts movement, and includes goggles 

that simulate cataracts. Based on their results, Ford is designing and 

building vehicles for aging customers (Deloitte, 2005). 

3. The Role of Psychographics in Vehicle Purchasing 

In purchasing a vehicle, psychographics help explain how vehicles 

satisfy the emotional needs of the consumers, not just the practical 

needs. It’s about what type of lifestyle you lead, what type of image 

you want to portray, how much and for what reasons you travel 

in the vehicle, and how you view the vehicle as an extension of 

yourself (Assaraf, 2008). This section presents examples of how 

psychographics can influence vehicle purchasing decisions. 

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a. How travel attitude, personality, and lifestyle influence 

vehicle type in the San Francisco Bay Area 

A study (Choo & Mokhtarian, 2002) based on a randomly selected 

mail survey of 1,904 residents in three neighborhoods in the San 

Francisco area specifically looked at how travel attitude, personality, 

lifestyle, and mobility factors influence individual vehicle choice. 

The results of the study were then used to develop a choice model 

based on these factors as well as typical demographic variables. 

The study presents six descriptive attitude clusters for the sampled 

area: 

•	� Affluent professionals - affluent and mobile. This cluster 

eats out a lot, is not family and community oriented and 

usually doesn’t have a large family. They seem to be more 

entertainment oriented than work oriented. 

•	� Transit-using urbanites - Young, urban, highly educated 

and community oriented. This cluster is pro-environment 

and pro-high density (they live in urban areas and like it). 

•	� Homemakers and older workers - Older suburanites who 

focus on family and home and don’t particularly like travel. 

•	� Travel haters – This work-oriented cluster doesn’t like 

travel, does as little travel as possible and wants to do less 

of it. 

•	� Excess travelers - Young, urban, highly educated and 

adventure seeking. This cluster is pro-environment and 

pro-high density, and pro-travel. Not one of the highest 

income groups, perhaps because they are prioritizing their 

adventure time over work time and status-seeking. 

•	� Adventurous and car-oriented suburbanites – Car-bound, 

excess travelers, oldest, organized, status conscious, and 

suburban. 

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In addition, the study presents eleven descriptive personality and 

lifestyle clusters including: 

• New family model – Young families, enjoy traveling for 

fun, but not for work, family/community oriented, but not 

settling down. 

• Homebodies - Not particularly social, don’t really like to 

travel, one of the more neutral in attitudes toward travel 

clusters compared to others. 

• Mobile yuppies – Young, professional, highly educated, 

travel lovers. 

• Transit advocates – Highly educated, environmentally 

sensitive, transit oriented. 

• Assistant VPs – Suburban, auto-oriented (but not 

particularly travel loving), older, least educated, frustrated 

(meaning they feel less in control and less satisfied with 

their lives). 

• Status seeking workaholics - Travel most (miles and 

frequency) for work, auto-bound, enjoy work travel. One 

of the most extreme clusters in regard to attitudes toward 

travel. Most status seeking, workaholic and not calm. 

• Suburban and stationary – Mostly older, suburban women, 

calm, don’t travel a lot. 

• Older and independent – Older, independent, 

unencumbered (most strongly NOT family/community 

oriented), entertainment focused. 

• Middle-of-the-roaders – Most neutral cluster in regard to 

travel attitudes, most strongly family/community oriented. 

• Travel loving transit users – Highly educated urban 

women, middle income, environmentally sensitive, like 

short distance travel by bus, strong excess travelers, highest 

walking share of total miles traveled. 

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•	� Frustrated loners – Most extremely frustrated (group 

with highest level of frustration with their lives), above 

average commutes, somewhat transit oriented (Choo & 

Mokhtarian, 2002). 

The study analyzed vehicle type in relation to these attitude, 

personality, and lifestyle clusters. All vehicle types, except the midsized car group, have distinct characteristics: 

•	� Small car drivers are pro-environment, tend to live in high 

density areas, and do not have a strong travel freedom 

attitude. They tend to be loners and perceive themselves 

as traveling less in a personal vehicle than others. They are 

also less likely to enjoy personal vehicle travel. They tend 

to be female, 40 or younger, have 4-year college degrees, 

and are in clerical or professional jobs. They live in single 

vehicle and single adult households. Higher proportion 

of Transit-using Urbanites, Excess Travelers, Transit 

Advocates, Travel Loving Users, and Frustrated Loners 

clusters. 

•	� Compact car drivers have a weaker travel freedom attitude 

and travel less in their personal vehicles for long-distance 

trips. They tend to perceive themselves as traveling less by 

personal vehicles than others. Like small car drivers, they 

have higher proportions of professional jobs, and single 

vehicle and single adult households. They have middle 

incomes. Higher proportion of Affluent Professionals, 

Transit Advocates, and Suburban and Stationary clusters. 

•	� Mid-sized car drivers have no distinct travel attitude, 

personality, lifestyle, mobility, or travel liking characteristics. 

Demographically they are more likely to be females 

or homemakers, and to have higher incomes or larger 

households. Higher proportion of Affluent Professionals, 

Assistant VPs, and Middle-of-the-roaders clusters. 

•	� Large car drivers tend to not have pro-environmental or 

pro-high density attitudes. They tend to be males, older 

or retired, and part-time employees. They also tend to be 

less educated and have lower incomes. They have more 

than one vehicle, and tend to be older households. Higher 

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proportion of Homemakers and Older Workers, Travel 

Haters, and Adventurous, Car-oriented Suburbanites, and 

higher than average proportions of Homebodies, Assistant 

VPs, Middle-of-the-roaders, and Frustrated Loners clusters. 

• Luxury car drivers are more likely to be status seekers and 

to often travel long distances by plane. They are more likely 

to be male and older or retired. They are highly educated 

and higher income people. They have more than one car 

and live in older adult households. Higher proportion of: 

Travel Haters, Excess Travelers, New Family Model, Status 

Seeking Workaholics, and Older and Independent clusters. 

• Sports car drivers are more likely to be adventure seekers. 

They are more likely than average to have 4-year college 

degrees and lower incomes. They live in two-worker or 

younger adult households. Higher proportion of: Excess 

Travelers, New Family model, Mobile Yuppies, Status 

Seeking Workaholics, and Frustrated Loners clusters. 

• Minivan/Van drivers have a weak pro-high density 

attitude. They perceive that they travel more by personal 

vehicle than do others. They enjoy traveling by personal 

vehicle more than average. They tend to be females and 

homemakers between the ages of 41 and 64. Both higher 

and lower household incomes are represented. They have 

more than one vehicle and larger households with children. 

Overrepresented in Homemakers and Older Workers, 

and Adventurous, Car-oriented Suburbanites; and higher 

than average proportions of Homebodies, Suburban and 

Stationary, Middle-of-the-roaders, and Travel Loving 

Transit Users clusters. 

• Pickup drivers have a weaker pro-high density attitude. 

Their short-distance travel is higher than average, while 

long-distance travel by airplane is lower. They tend to 

have lower education levels, are full-time employees in 

service-related jobs, have middle incomes and two-vehicle 

households. Higher proportions of: Homemakers and 

Older Workers, Adventurous, Car-oriented Suburbanites, 

New Family Model, and Assistant VPs clusters. 

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•	� SUV drivers tend to have a strong travel freedom attitude 

and enjoy traveling short-distances by personal vehicle. 

They are likely to be age 40 or younger and are highly 

educated or high income people. They have a higher than 

average proportion of larger households with children. 

Higher proportions of: Adventurous, Car-oriented 

Suburbanites, New Family Model, Mobile Yuppies, and 

Older and Independent clusters. 

Based on these results, the authors concluded that travel attitudes, 

personality, lifestyle, and mobility factors do affect individual 

vehicle type choices. In regards to attitudes that are proenvironment, those clusters that are pro-environment are those 

that use transit and tend to drive smaller cars. They tend to be more 

affluent and more highly educated and community oriented. The 

authors’ conclusions are based on based on a randomly selected 

mail survey of 1,904 residents in three neighborhoods in the San 

Francisco area and while they provide interesting insights into how 

psychographics can influence which vehicles consumers chose to 

purchase and drive, they are not representative of the overall U.S. 

population. (Choo & Mokhtarian, 2002). 

b. Views of Generation Y 

Deloitte’s 2008 survey of Generation Y, found that a majority of the 

respondents felt that a vehicle reflects a person’s style, status and 

values, but that when considering the purchase of a new car, the 

underlying qualifications were always safety and comfort.Specifically, 

the study found that “roughly two-thirds of the respondents strongly 

or somewhat agreed that a vehicle reflects a person’s taste and status 

and they consider these factors when making a purchase decision.” 

This conclusion was based the results of those that somewhat or 

strongly agreed to the following statements: 

•	� A vehicle says a lot about a person’s taste/sense of style 

(82%) 

•	� When buying a vehicle, I consider how it impacts my 

personal pursuit such as jobs, relationships, and hobbies 

(77%) 

•	� When buying a vehicle, I consider how it reflects who I am 

as a person (67%) 

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• A vehicle says a lot about a person’s status in society (i.e. 

importance or wealth) (65%) 

• A vehicle says a lot about a person’s values (57%) 

When considering purchasing a vehicle, this group responded that 

the most important factors are: gas mileage (92%), affordability 

(91%), performance (90%), leg room (65%), exterior styling (65%), 

and low emissions (58%). However, for this group environmental 

friendliness plays an increasing role in their perception of what is 

‘cool’ in terms of what they drive. The respondents gave as their 

top four reasons that a vehicle is considered ‘cool’ to be: its exterior 

styling (44%), affordability (40%), being environmentally friendly 

(35%), and comfort (33%). Based on these results, Deloitte 

concluded that for Generation Y, environmental friendliness is 

playing an increasing role in their perception of cool. Additionally, 

when asked what broader issues they considered when purchasing 

a new vehicle, 62% responded they considered the environment, 

and 80% of that 62% also responded that they were willing to pay 

more for an environmental friendly vehicle (Deloitte, 2008). 

c. Vehicle choice is often based on emotions 

Based on the results of their 2006 and 2007 surveys, Capgemini 

concluded that consumers are increasingly driven by their hearts as 

well as their heads. They found that although rational factors such as 

safety, price, and reliability play a role in consumer decisions, these 

factors are often overlooked by other more emotional factors. For 

example, when respondents were asked why they had or were going 

to switch vehicles, “fits my needs,” “wanted to try something new,” 

and “enjoyment of the vehicle” scored higher than fuel economy and 

safety. To be successful, manufacturers and dealers have to appeal to 

both rational and emotional aspects of vehicle buying. 

People buy vehicles to make a statement about their personality and 

become emotionally attached to their vehicles. In addition, vehicles 

can say a great deal about the people who drive them. For example, 

the main reason that consumers reported buying one leading 

hybrid vehicle was not because of fuel economy or low emissions, 

but because they saw the car as making ‘a statement about me.’ 

This was especially the case since this particular vehicle was only 

available as a hybrid and so driving it made a clear statement about 

the driver’s priorities. Also important to consumer decision-making 

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are the influences of social norms and the behaviors of those 

around us. What others around us drive may influence what we 

choose to drive and what we view as acceptable to drive (European 

Commission, 2009). 

4. Fuel-Efficient/Low Emission Vehicle Options 

Consumer demand for green products is growing, and the 

automobile industry is no exception. There is growing awareness of 

fuel-efficient and alternative fuel vehicles, and consumer research 

indicates a growing interest in purchasing more fuel efficient and 

low emissions “greener” vehicles. In a 2009 study of consumers 

in eight countries (United States, Brazil, China, France, Germany, 

India, Russia, and United Kingdom) 41% of respondents reported 

currently owning a fuel-efficient or alternative-fuel vehicle, up from 

36% in the prior year’s survey. Another 30% of consumers plan to 

buy a fuel-efficient or alternative fuel vehicle (Capgemini, 2009a). 

Themaintechnologiesavailableforgreenvehiclesincludealternative 

fuels (which include compressed natural gas, second-generation biofuels, and hydrogen), advanced internal-combustion-engine (ICE) 

technologies, and fully electric vehicles (The Boston Consulting 

Group, 2009). One view is that hybrids are serving as a transition 

technology that will aid in the switch to electric vehicles and that 

while hybrids will still outnumber electric vehicles in the year 2020, 

trends point to a fully electric long-term future (Deloitte, 2009). 

Others see more promise in the development of alternative powertrain technologies such as advanced internal combustion engine 

technologies (ICE) and electric as more promising technologies 

than alternative fuels due to the significant investment and further 

technological progress needed to achieve substantial reductions 

in alternative fuel CO2 emissions (The Boston Consulting Group, 

2009). However, there is some indication that natural gas could 

become an important part of the domestic fuel supply, especially 

for fleets (Deloitte, 2009). 

a. Reasons for buying fuel efficient/low emission ‘green’ vehicles 

Despite increasing demand for greener purchase alternatives and 

growing awareness of the environmental impact of automobile use, 

consumer research shows that fuel savings is the primary factor 

influencing decisions to purchase green vehicle with concern about 

environmental impacts showing up as a secondary factor (Ernst and 

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Young, 2010; Capgemini, 2009a; Capgemini, 2008; Capgemini, 

2007). This finding is echoed in focus group research conducted in 

Knoxville and Los Angeles with consumers who were in the market 

for a new or used vehicle. The focus group participants indicated 

that with the exception of fuel economy, environmental concerns 

were not a factor in participants’ decision-making process when 

purchasing a vehicle, and those who do consider fuel economy do 

so primarily for economic rather than environmental reasons (Nye, 

Greene, Hopson, Saulsbury, 2003). 

There is some evidence that concern for environmental impacts has 

a growing influence on vehicle purchase decisions. In Capgemini’s 

2009 survey of potential car buyers, 20% of U.S. respondents said 

that the environment was their primary reason for choosing a 

fuel-efficient or alternative-fuel vehicle, up from 9% the previous 

year (Capgemini, 2009). However, research on the electric vehicle 

market noted that the rising price of fuel is the main factor driving 

interest in electric vehicles, and while concerns about energy security 

and climate change are growing, they are not yet contributing to 

purchase behavior (Ernst and Young, 2010). 

The results of Capgemini’s 2007 survey indicated that older 

consumers are more likely than the younger consumers (defined as 

consumers 18-34 years of age) to identify fuel economy as a primary 

factor for purchasing a fuel-efficient or alternative-fuel vehicle. In 

addition, men are more likely than women to place an emphasis 

on fuel economy, while a higher proportion of women identified 

environmental impact as the primary reason for purchasing a green 

vehicle (Capgemini, 2007). 

A Michigan State University study based on Deloitte’s Generation 

Y survey data similarly found an emphasis on fuel economy. It 

found that miles per gallon, price and brand were determined to 

be the most important product attributes to the Gen Y consumer, 

with environmental concerns taking a secondary role (Deloitte/ 

MSU, 2010). 

A 2008 Deloitte survey analyzing Generation Y’s relationship with 

the automobile demonstrated that while gas mileage, price, and 

performance were rated the most important factors in the decision 

process, low emissions and production in an environmentally 

friendly factory were also rated as important factors. In addition, 

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Generation Y consumers rated environmental-friendliness as one 

of the top three reasons that a vehicle is cool, along with exterior 

styling and affordability (Deloitte, 2008). Deloitte’s 2009 follow 

up survey indicated that 73% of respondents agree that the 

environment is an extremely important factor when purchasing a 

vehicle, while nearly half of respondents agree that the types of 

vehicles they drive directly affect the environment. Additionally, 

nearly 53% of respondents would pay more for an environmentallyfriendly vehicle. Nearly 65% would pay more for a vehicle that is 

better for the environment and saves energy costs. But 45% would 

NOT pay more for a vehicle that did not save money on energy 

costs even if it was better for the environment (Deloitte, 2010). In 

short, a vehicle must provide both environmental and economical 

advantage to the Gen Y consumer. 

Other studies support the idea that although there is a growing 

interest in green vehicles, cost is still an important issue. A 2009 

survey of 3,000 car buyers in Brazil, China, France, Germany, 

India, Russia, the United Kingdom and United States found 

that consumers show some willingness to pay for improved fuel 

efficiency: 70% of respondents said they would pay no more than 

10% extra for a fuel-efficient or alternative-fuel vehicle, and 20% 

were not willing to pay any premium at all (Capgemini, 2009a). 

Another study found that while a majority of U.S. drivers (52%) 

claim a preference for alternative fuel vehicles, only 28% would 

be willing to pay a premium for such vehicles. Most customers, 

it seems, do not feel that the savings at the pump are sufficient 

to offset the higher price of today’s alternatively fueled vehicle 

(Deloitte, 2010). 

One study estimates that a 10% core of possible electric vehicle 

early adopters has formed (Ernst and Young, 2010). A 2004 report 

on the then-emerging gasoline/electric hybrid estimated the natural 

market for gasoline/electric hybrids to be about 15% of the U.S. 

population, further noting that the key to sustainability of the green 

vehicle market is the ability to capture the more than “30 percent 

of the U.S. consumer market that is friendly to green products, but 

unwilling to give up much to embrace it” (Booz & Company Inc., 

2004). In this sense, it appears that while there is increasing interest 

in going green, green vehicles, especially electric vehicles, are still 

considered to be a niche market. 

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b. Barriers to increasing market share of green vehicles 

While much of the literature focuses on the commercial viability 

of electric vehicles, and indicates that electric vehicles will feature 

prominently in the long-term future of the green vehicle industry, 

there are numerous barriers to their widespread adoption. These 

barriers include lack of public awareness, price, need for specialized 

infrastructure, battery performance, and doubts concerning the 

electric car’s ecological value. Despite growing interest in green 

vehicles, for there to be widespread adoption, green vehicles need 

to be seen as a “no compromise” alternative, in that their price 

and performance is at least on par with the traditional or “brown” 

vehicles available on the market (Booz & Company Inc., 2004). 

Public awareness of emerging powertrain technologies is weak in the 

United States. Data from the Deloitte’ Generation Y surveys revealed 

that on average, Generation Y consumers do not feel as though 

they are experts with respect to sustainable vehicle technology, and 

this absence of confidence may represent a significant barrier to 

adoption (Deloitte/MSU, 2010). Thirty percent of U.S. consumers 

are still unaware of hybrid/electric technologies even though those 

vehicles have been on the market for more than ten years. Further, 

few consumers are willing to embrace new technology prior to it 

being well established in the market (Ernst and Young, 2010). 

A report by Price Waterhouse Coopers estimates electric vehicles 

to cost approximately $7,000 - $20,000 more than a traditional 

vehicle depending on the vehicle under consideration, with much of 

the premium attributed to battery cost (Price Waterhouse Cooper, 

2009). Consumer research reveals some willingness to pay a higher 

upfront cost for an electric vehicle, if lower vehicle operating costs 

offset the higher upfront cost over time (The Boston Consulting 

Group, 2009). Another study found that consumers would accept 

a three-year amortization period for the price differential, but 

noted that under current cost conditions, electric vehicles do not 

come close to meeting this time horizon (Price Waterhouse Cooper, 

2009). Other studies show that consumers would be willing to 

pay a premium of 10% for enhanced fuel efficiency (Capgemini, 

2009a) and a 14% premium for an electric vehicle (Wyman, 2009). 

Some experts conclude that a combination of high fuel prices and 

government purchase incentives is needed for electric vehicles to 

make financial sense to the consumer (The Boston Consulting 

Group, 2009, 2010; Price Waterhouse Cooper, 2009; Capgemini, 

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2009b). Analysis by the Boston Consulting Group suggests that 

in order for U.S. electric car purchasers to break even in three 

years, one of three conditions would need to be met, alone or in 

combination: an oil price increase from $100 to $300 per barrel; 

a 200% increase in gasoline prices caused by higher oil prices, 

higher taxes, or both; or $7,500 in government incentives per car 

purchased (Boston Consulting Group, 2010). 

Battery performance is another key barrier to widespread adoption 

of the electric vehicle. The current driving range of an electric 

vehicle is between 160 to 190 miles on a single charge, with battery 

recharge time of four to eight hours (The Boston Consulting Group, 

2009, 2010). This insufficient driving range is viewed as a barrier to 

widespread commercial acceptance. A 2010 nationwide survey of 

1,000 respondents of driving age (Ernst and Young, 2010) revealed 

that 33% of respondents have daily driving range expectations of 

more than 200 miles. Interestingly, the Ernst and Young survey 

revealed that respondents’ driving range expectation is much higher 

than their actual daily miles driven. While 72% of respondents 

drive less than 30 miles per weekday, 87% of respondents expect 

electric vehicles to have a daily driving range of 50 – 200 miles 

(Ernst and Young, 2010). One study concludes that electric cars 

need to achieve a driving range of approximately 312 miles on a 

single charge (The Boston Consulting Group, 2010 – batteries for 

electric cars). Further, electric cars require a network of charging 

stations, which will be costly to build. Without the necessary 

infrastructure, drivers of electric vehicles will be restricted to short 

commutes (PriceWaterhouseCoopers, 2009a, 2009b; The Boston 

Consulting Group, 2009, 2010; Capgemini, 2009b). However, the 

2010 nationwide consumer survey by Ernst and Young revealed 

some willingness to pay for the infrastructure necessary to support 

electric cars, with 34% of respondents saying that they are willing 

to help pay for charging stations to be installed in their communities 

(Ernst and Young, 2010). 

Finally,thereissomeindicationofdoubtastowhetherelectricvehicles 

are truly “clean vehicles” because in some cases, the electricity used 

to power electric vehicles is generated by high polluting sources such 

as coal power plants (PriceWaterhouseCoopers, 2009; Capgemini, 

2009b). Another potential area of concern is the environmental 

impact of recycling used batteries (Capgemini, 2009b). 

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c. Vehicle choice among green vehicles 

Gas/electric hybrid vehicles such as the Toyota Prius are the primary 

type of advanced technology vehicles that consumers currently 

own or plan to buy. This is likely due to the fact that these cars 

have been on the market the longest, and they run on regular motor 

fuels and leverage existing infrastructure (Capgemini, 2009b; Booz 

& Company Inc., 2004). Further, gas-electric hybrids available 

on the market today are competitive in terms of style, as some 

manufacturers provide hybrid versions of traditional models. In 

addition, initial data indicate that hybrid reliability is on par with 

all-gasoline traditional models, and that the cost and resale value 

of hybrids is typically competitive with that of traditional models 

(Booz & Company Inc., 2004). 

In Deloitte’s 2009 survey of Generation Y consumers, respondents 

were asked to indicate which type of sustainable technologies 

would favorably impact their purchase. Standard gasoline engine 

with high fuel efficiency and hybrid gas/electric engines were citied 

most frequently (23% and 22% respectively). Alternative fuel 

vehicles (ethanol/gasoline engines and clean diesel engines) and 

electric vehicles were each selected by 12-13% of respondents. 

Slightly less than 7% said that sustainable technology does not 

affect their purchase decision in some way (Deloitte, 2010). 

Consumer education is lacking with regard to available green vehicle 

technologies. It seems that consumers do not have the information 

needed to really understand the differences between vehicles to be 

able to make comparisons across brands and types of technology 

(Deloitte/MSU, 2010). Further, as described in the previous section, 

there are several drawbacks to the electric vehicles available on the 

market today that limit them from becoming a realistic choice for 

more than a dedicated group of early adopters. 

5. Importance of Interactions with Customers 

As the global auto industry struggles to deal with the economic 

downturn and American carmakers try to recuperate from a year 

full of bad news, maintaining a strong customer focus becomes 

essential for survival and good performance. As Accenture (2009) 

points out, the key to negotiating the changes in the present market, 

building customer loyalty and ensuring growth in the long-term, 

involves understanding the current customer base, experimenting 

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and expanding to newer customers, developing trust-based 

relationships with customers, and managing customer interactions 

and transactions efficiently. 

Further, the role that manufacturers and dealers play in promoting 

fuel economy among customers is pivotal. Recent pre-group online 

surveys conducted by EPA in collaboration with PRR found that 

over of two-thirds of the respondents looked at manufacturers’ 

websites to search for information on fuel economy. The surveys 

also showed that close to one-third (30%) searched for fuel 

economy information at automobile dealerships. 

a. Customer satisfaction and loyalty 

The previous sections in this literature review explored the vehicle 

buying process and the various vehicle-related demographic and 

psychographic factors that impact current and potential customer 

vehicle choice. This section explores the experiential factors 

that influence consumer loyalty to the dealer and/or brand, their 

satisfaction with the purchase, and their behavior after purchase. 

With the world shrinking into a global village, the Internet 

becoming a passport to almost everywhere, and the offering of 

an assorted range of competing vehicles (models and makes) to 

choose from, consumers are becoming increasingly diverse with 

specialized needs and are more aware than ever of what vehicle 

they want to buy even before they enter the showroom (Capgemini, 

2006a). The customer-dealer relationship has undergone drastic 

transformations in recent times. With customers having access 

to information about the vehicles under consideration, the new 

customer-dealer relationship model is more like an interaction 

between two equal parties. As Capgemini, (2006b) has pointed 

out, the final vehicle purchase decision is a result of a trust-based 

relationship where the dealer is not “selling” but instead enabling 

the customer to buy. 

During the purchasing process, the customer-dealer relationship 

starts about two weeks before the final purchase when the 

customer visits the showroom (Capgemini, 2006b). During this 

entire customer-dealer interaction, the customer goes through 

various emotions; how well the dealer manages these emotions can 

impact the sale, the price a customer pays, and the reputation of 

the manufacturer. In its 2008 study, J.D. Power found that auto 

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consumers attach a great amount of importance to the quality of 

interaction with the dealer and are willing to pay a slightly higher 

price to the dealer who has highly professional staff and provides 

high-quality customer experience and services. Further, the study 

stated that consumers also read online reviews and rankings 

about other shoppers’ experiences at the dealership and use these 

to determine what kind of experience they’re going to have at a 

dealership (Root, 2008). 

In addition to its direct implications (whether or not the customer 

buys the vehicle from that dealer), the customer-dealer relationship 

has far reaching impacts on customer satisfaction and their loyalty 

to a brand and/or manufacturer, which in turn affect brand and/ 

or manufacturer reputation (Car Internet Research Program & 

Capgemini, 2008). As Oracle (2003) explained, a poor dealer 

experience can have a significant negative impact on brand 

perception. Conversely, those who have a good experience and 

feel satisfied are more likely to purchase the same make and/or 

brand from the same dealer in the future. In practice, this requires 

that dealers and manufacturers learn to understand the consumer’s 

universe, the tools at their disposal, and the states of mind they are 

in when deciding to buy a vehicle (Capgemini, 2006b). 

While previous analyses by Oracle (2003) and Capgemini (2006a, 

2008) indicated that the automotive industry had been facing declining 

customer loyalty over time, a slightly more recent survey by Capgemini 

(2009a) found an increase in the number of consumers who have 

become brand and dealer loyal and that consumer satisfaction with 

the buying process has grown in the last year. The study attributed 

this increase to “contraction in the dealer business and improvements 

in quality and service resulting from investments in customer lifecycle 

management systems” (Capgemini, 2009a). In addition, the study 

pointed out that consumers are more loyal to the brand than to 

the dealer. A similar finding was reported in the Dohring Company 

National Automotive Consumer study (1996). The study was based 

on 1,253 respondents who were surveyed across the United States and 

found that more customers are likely to be loyal to a certain make of 

vehicle than to a dealership and that customers primarily associate 

their purchases with the automotive manufacturer rather than the 

particular dealer that they purchase from. 

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III. Consumer Education 

Campaigns Regarding 

Fuel Efficient Vehicles 

A review of literature on the results of education campaigns 

used to encourage consumers to make more fuel efficient vehicle 

choices revealed the following. However, it should be noted that 

the literature review yielded little academic research evaluating the 

effectiveness of these educational campaigns. 

A. Evaluation of Existing Consumer 

Education Campaigns 

Some researchers question the effectiveness of focusing on fuel 

economy as a means to change consumer purchase decisions, instead 

supporting a focus on fuel efficiency and technological advances. 

A 2000 study (Plotkin, 2000) states that education programs 

on fuel economy have limited value when fuel prices are low, 

suggesting that it may be more effective for government-sponsored 

educational programs to encourage consumers to consider green 

technologies. Kurani and Turrentine (2004) concluded that current 

strategies of drawing attention to annual fuel cost savings could 

disappoint buyers, noting that the importance of fuel economy 

comes and goes in the minds of consumers as the price of gasoline 

or household income changes, or as individual drivers go through 

lifestyle changes, such as needing to drive more. The authors 

conclude that educational efforts that focus on fuel efficiency and 

technical advances may be more effective, that consumers “might 

value fuel economy more highly if it were more like shiny paint or 

a bold body style—an attribute with some emotional punch.” 

Literature Review 47 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A 2008 graduate thesis (Bacani, 2008) looked at the effectiveness 

of Maine’s Clean Car Program (described below) in improving 

the likelihood of ownership of vehicles with higher environmental 

performance. Bacani concluded that the campaign did not appear 

to be affecting consumer behavior with regard to purchase of 

environmentally-friendly vehicles, and that Maine consumers are 

buying more environmentally-friendly vehicles simply because 

there are more environmentally-friendly models available in the 

market. However, the study did not look at price, indicating a need 

for further research to verify results. The author suggests public 

education on the importance of the air pollution score and the 

greenhouse gas scores would be helpful when purchasing a vehicle. 

B. Overview of Existing Social Campaigns 

Influencing Perceptions About Vehicles 

Existing campaigns include: 

• www.fueleconomy.gov 

Website provides fuel economy estimates, energy and 

environmental impact ratings, fuel savings tips, and links 

to other information such as links to fuel prices and crash 

ratings. The site also provides a side-by-side comparison 

tool to help consumers choose a fuel efficient vehicle to 

meet their needs. The website is maintained jointly by the 

U.S. Department of Energy’s Office of Energy Efficiency and 

Renewable Energy and the U.S. Environmental Protection 

Agency to help fulfill DOE and EPA’s responsibility under 

the Energy Policy Act (EPAct) of 1992 to provide accurate 

MPG information to consumers. 

• It All Adds Up to Cleaner Air, Federal Highway Administration, 

www.italladdsup.gov 

It All Adds Up to Cleaner Air is a public education and 

partnership-building initiative developed by several federal 

agencies including the Federal Highway Administration, 

Federal Transit Administration, and U.S. Environmental 

Protection Agency for the purpose of informing the public 

about the impact of their transportation choices on traffic 

congestion and air quality. The campaign was developed 

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to help state and local governments meet mobility and 

clean air goals of Transportation Equity Act for the 21st 

Century and the Clean Air Act Amendments. The campaign 

provides state and local agencies free commercial-quality 

promotional materials that emphasize four actions 

people can take to improve air quality and reduce traffic 

congestion: combining errands into a single car trip, 

keeping cars properly maintained, refueling in the evening 

without topping off the gas tank, and choosing alternate 

modes of transportation, such as carpooling, mass transit, 

biking, or walking. 

•	� Planet Polluto, 

www.planetpolluto.com/index1.html 

Planet Polluto is an educational game developed by the 

Sacramento Metropolitan Air Quality Management 

District that teaches children about the causes and effects 

of pollution. 

•	� Cleaner Cars for Maine Program, 

www.maine.gov/dep/air/lev4me/index.html 

The Cleaner Cars for Maine Program is designed to help 

consumers choose low-emission and fuel efficient cars. 

Program strategies include providing a sticker identifying 

green vehicles and consumer education in the form of a 

website, brochures, newspaper and radio advertising to 

educate consumers about Maine’s air quality, green vehicle 

shopping tips, and maintenance tips. 

•	� Pew Campaign for Fuel Efficiency, 

www.pewfuelefficiency.org/index.html 

The Pew Campaign for Fuel Efficiency is a public education 

campaign advocating greater fuel efficiency standards for 

the U.S. car and light truck fleets. The Campaign works 

with a diversity of interests — business, faith, consumer, 

environmental, safety and national security groups — to 

educate the public and inform the national policy debate. 

The campaign focuses on six reasons to increase fuel 

efficiency, including security, savings, power (the ability 

to increase fuel efficiency without sacrificing acceleration 

Literature Review 49 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and other measures of performance), jobs, safety (the 

ability to make cars more fuel efficient without sacrificing 

vehicle size or safety), and lower CO2 emissions. Strategies 

include extensive media outreach, national and local print 

and radio advertisements, and public opinion research. 

• Drive Smarter Challenge Campaign, 

http://drivesmarterchallenge.org/ 

The Drive Smarter Challenge Campaign is a program of the 

Alliance to Save Energy. The campaign provides a website 

that encourages people to learn about money-saving 

driving and vehicle maintenance tips and take the Drive 

Smarter Challenge by choosing from six fuel efficiency 

actions. The site provides a calculator that computes an 

individual’s savings and keeps a running tally of savings 

by everyone who has taken the challenge and encourages 

people to get friends and family to take the challenge by 

offering discounts on fuel-efficient products. 

• DriveClean.ca.gov, 

www.driveclean.ca.gov/ 

DriveClean.ca.gov is an online buying guide for clean and 

efficient vehicles. The website, run by the California Air 

Resources Board, allows consumers to compare pollution 

levels between vehicles and provides information and 

resources to learn about advanced vehicle technologies and 

fuels.The program provides an Environmental Performance 

Label, a label required on all new cars sold in California 

manufactured after January 1, 2009. The label provides 

a global warming score, which ranks each vehicle’s CO2-

equivalent value on a scale of 1-10 (10 being the cleanest) 

relative to all other vehicles, and a smog score, which tells 

the consumer how much a vehicle pollutes. Similar to the 

global warming score, the smog score uses a scale of 1-10 

with 10 being the cleanest. 

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•	� Don’t Be Fueled! Mothers for Clean and Safe Vehicles, 

www.dontbefueled.org/index.shtml 

Don’t Be Fueled! Is a grassroots campaign initiated by 

parents concerned about the safety and environmental 

soundness of the existing fleet of vehicles. The campaign 

has established a website that serves as an information 

clearinghouse and organizes events. 

•	� Freedom From Oil, 

http://gx.freedomfromoil.org/ 

The Freedom from Oil Campaign is a joint effort of the 

Rainforest Action Network, Global Exchange, and the 

Ruckus Society. The campaign is working to end America’s 

oil dependence, reduce oil related conflicts, and stop 

global climate change by convincing the auto industry 

to dramatically improve fuel efficiency and eliminate 

vehicle greenhouse gas emissions. The campaign focuses 

on supporting grassroots activists by offering materials 

and information, skills training, local organizing, group 

development, and other general support. 

Literature Review 51 
52 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

IV. Summary of Results 

and Conclusions 

The purpose of this literature review was to summarize the 

information on the vehicle buying cycle, the information sources 

used by consumers as they shop for vehicles, what factors influence 

consumer vehicle purchasing decisions, the impact of the increasing 

availability of “greener”vehicles, and information on available public 

education campaigns on the benefits of driving “greener” vehicles. 

The sources used to prepare this literature review were varied 

in their methodologies and carried a variety of methodological 

limitations as to their coverage of the population of U.S. vehicle 

buyers. Attachment I provides a summary of each major source 

used and an explanation of its methodology and limitations. It 

should be noted that in spite of the multiple methods used by 

the major sources, a number of similar and consistent results and 

themes emerged from among them. 

Based on the review, there are a number of key findings have 

implications for the redesign of the fuel economy label, as well as 

the educational campaign designed to aid consumers in identifying 

and choosing more fuel-efficient vehicles. 

•	� The length of the vehicle buying cycle is contracting as 

consumers obtain more information sooner from the 

Internet. By the time U.S. consumers enter a dealership,
�

they are closer to purchasing a vehicle than ever before. The 

Internet has emerged as one of the most important sources 

of information for consumers interested in purchasing a 

vehicle. To gather information they visit manufacturer and 

dealer Web sites and rely on consumer-to-consumer tools 

like reviews and blogs. Consumers are also increasingly 

Literature Review 53 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

interested in purchasing vehicles online. Consequently, the 

information on the redesigned fuel economy label, which is 

intended to inform them about a vehicle’s performance in 

regard to several metrics (such as fuel consumption, cost, 

and environmental impact), should also be available online. 

• Considering that in the consumer surveys reviewed 

consumers consistently stated that the most important 

factors that influence vehicle choice are reliability, safety, 

price, and fuel economy (not necessarily in that order), 

the fuel economy label and educational campaign will 

need to acknowledge the place that fuel economy plays 

in the purchase process and identify ways to ‘be heard’ as 

consumers make their decisions. 

• Consumer vehicle purchasing is also influenced by how a 

vehicle satisfies the practical and emotional needs of the 

consumer. Age, gender, income, household size, urban 

or suburban living, as well as availability of other travel 

options, all play a part in what type of vehicle a consumer 

decides to purchase, as do the psychographic aspects of 

‘what a vehicle says about me.’ This suggests that to be most 

effective, the educational campaign should be tailored to 

specific demographic market segments, while also making 

the purchase of fuel-efficient vehicles a ‘cool’ statement 

about the consumer. Acknowledging what is important 

in the vehicle purchase process to specific demographic 

segments, as well as to what consumers’ think of as ‘cool’, 

can serve as a gateway to getting their attention. Finally, 

demographic and psychographic influences not only help 

in understanding the appeal of particular vehicles, but 

also point the way towards potential messaging to assist 

consumers in identifying fuel-efficient vehicles. 

• A major challenge will be explaining the functioning of 

advanced technology vehicles to consumers. Overall, 

consumers lack information on “green” vehicles and 

technologies to really understand the differences and be 

able to make comparisons across brands, models, and 

technologies. Identifying easy-to-understand ways to 

explain advanced technology vehicles, how they function, 

and the fuel efficiency of such vehicles will need to be 

54 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

determined before an effective educational campaign can 

be designed. The redesigned fuel economy labels will be an 

important starting point for this since it is being designed 

to allow consumers to make informed comparisons among 

vehicle types. 

•	� Lastly, the results of the literature regarding consumer 

education campaigns related to helping consumers 

better understand the benefits of purchasing a more 

environmentally friendly vehicle can serve as an important 

starting point for the agencies’ educational campaign. 

Although it does not appear from the literature that these 

campaigns have evaluated outcomes, they can still provide 

good information, especially if key staff members from 

those campaigns are interviewed to learn about what 

worked and didn’t work from their perspectives. 

Literature Review 55 
56 EPA Fuel Economy Label Redesign 
 

 

Attachment 1 - Summaries 

of Major Studies 

Evidence from the Maine Light-Duty Vehicle Market: Are EcoCampaigns Effective? was prepared by Eleanor Santiago Bacani 

in 2008 as a thesis for a Master of Science in Resource Economics 

and Policy at The University of Maine. The goal of the study was 

to investigate whether eco-marketing campaigns have been effective 

in improving the likelihood of ownership of vehicles with higher 

environmental performance, as well as looking at the effects of 

demographics and gas prices. The study focused on the light duty 

vehicle market in Maine. The researcher conducted regression 

analysis using data from the Maine Vehicle Registration Database 

between 2004 and 2007, data sets from EPA Green Vehicle Guides 

for model years 2004 to 2007 (to obtain environmental information), 

U.S. Census (town-level demographics), and gas price information. 

Results suggest that eco-marketing campaigns do not appear to have 

had a statistically significant effect on the likelihood of owning SUVs 

with higher environmental performance. In addition, the study found 

that households have differing reactions to the various pollutants 

associated with vehicles in some vehicle classes, suggesting that 

policy efforts should be directed at informing the general public 

of air pollution scores and greenhouse gas scores when purchasing 

a vehicle to maximize the effectiveness of future eco-marketing 

initiatives. The general conclusion is that the eco-composition of 

the light-duty vehicle market is improving over time because of 

the increased number of vehicle models with higher environmental 

performance that are available in the market today. The results 

of this study are only relevant to light-duty vehicles purchasers in 

Maine between 2004 and 2007, and the author stated that due to 

sufficient information the findings of this study would need further 

research to be validated. Regardless, it does provide a case study of 

how vehicle purchases are impacted by eco-marketing campaigns. 

These findings were used to support the discussion in this literature 

review report of existing consumer education campaigns. 

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Energy Trends: New Hybrids Breaking Out of the Niche? was 

prepared by Booz & Company in 2004. The report is part of an 

occasional series highlighting emerging trends in the global energy 

sector. The report looks at the emergence of gasoline/electric 

hybrids in their infancy in 2004 and analyzes hurdles to broader 

market acceptance. The article concludes that if long wait times and 

premium prices persist, consumers will walk away from this new 

technology. In addition, new market entrants need to match the 

reliability and performance standards set by hybrid leaders Toyota 

and Honda. However, hybrids serve as one part of the long-term 

trend towards creation of a more efficient vehicle fleet. The results 

of this report provide information relevant to consumer vehicle 

purchasing decisions during the early emergence of gasoline/electric 

hybrid vehicles. The conclusions made in this report were used to 

support the discussion in this literature review report of barriers to 

increasing the market share of green vehicles. 

Batteries for Electric Cars: Challenges, Opportunities, and the 

Outlook to 2020 was prepared by The Boston Consulting Group 

in 2010. The paper looks at the impact of the development and cost 

of various types of batteries on the emerging market for electric 

cars, analyzing the amount of progress anticipated by 2020, and 

the barriers that will need to be overcome in order to achieve 

widespread commercial adoption of electric vehicles. The report 

draws on Boston Consulting Group’s work with automotive OEMs 

(original equipment manufacturers) and suppliers and on a detailed 

analysis of the intellectual property landscape. The researchers also 

created a battery cost model to project future costs and conducted 

50 interviews with battery suppliers, automotive OEMs, university 

researchers, start-up companies working on leading-edge battery 

technologies, and government agencies across Asia, the United 

States, and Western Europe. The paper concludes that long battery 

charging times are a technical challenge and commercial barrier 

that must be addressed and that without a major breakthrough in 

battery technologies, it is unlikely that fully electric vehicles that 

are as convenient as internal combustion engine vehicles (meaning 

that they can travel up to 500 km/312 miles on a single charge 

and can recharge in minutes) will be available for the mass market 

by 2020. Further, the paper concludes that the cost of batteries 

will play a critical role in determining the commercial viability of 

electric cars and that in the short- to medium-term, early adopters 

and government incentives are likely to drive demand for electric 

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vehicles. For mass market adoption, total cost of ownership 

becomes a factor. Consumers will weigh an electric vehicle’s savings 

(generated by lower operating costs relative to gasoline) against 

the higher upfront purchase price. A combination of high fuel 

prices and government purchase incentives is needed for electric 

vehicles to make financial sense to the consumer. The findings in 

this report help explain the current and projected U.S. market for 

electric car batteries. The conclusions made in this paper were used 

to support the discussion in this literature review report of barriers 

to increasing the market share of green vehicles. 

The Comeback of the Electric Car: How Real, How Soon and 

What Must Happen Next? was prepared by the Boston Consulting 

Group in 2009. The paper evaluates the viability of available 

technologies for efficient, low-CO2 emitting power trains and 

presents a view on the most likely market scenarios for 2020, 

with a discussion of the implications for major stakeholders. The 

authors analyzed current scientific findings on energy consumption, 

oil reserves, and CO2 emissions, as well as technological options 

for alternative propulsion concepts in addition to interviewing 

OEMs, suppliers, battery manufacturers, power companies, and 

conducting consumer research. The report concludes that electric 

cars are a critical component of efforts to reduce CO2 emissions 

through increased vehicle efficiency, but a total cost of ownership 

advantage is a prerequisite for widespread adoption of electric 

vehicles. Without government incentives to encourage consumers 

to purchase electric vehicles and power companies and private 

investors to provide the infrastructure needed to support electric 

vehicles at an affordable price, electric vehicles will not succeed 

beyond serving a niche market. This paper represents the views of 

its authors on the electric car market based on a variety of sources 

based on varied methodologies. The conclusions in this paper were 

used to support the discussion in this literature review report of 

fuel-efficient/low emission vehicle options, and the barriers to 

increasing the market share of green vehicles. 

Electric Vehicles: A Force for the Future was prepared by Capgemini 

in 2009. The report explores challenges to widespread acceptance 

of the electric vehicle. An explanation of the methodology used to 

prepare this report is not provided. The report identifies challenges 

to widespread acceptance of the electric vehicle including battery 

performance, recharging infrastructure investment, market 

Literature Review 59 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

acceptance, price, existence of other alternatives, ecological 

value, and technological maturity. The report concludes that 

collaboration is key to electric vehicle development, including 

vehicle manufacturers, suppliers, dealers, other retailers, consumers, 

electric/utility companies, and governments. The conclusions in 

this report were used to support the discussions in this literature 

review report of reasons for buying fuel efficient/low emission 

vehicles, barriers to increasing the market share of green vehicles, 

and vehicle choice among green vehicles. 

Cars Online 05/06: Creating Opportunities for Revenue Growth 

and Cost Reduction was prepared by Capgemini in 2005. The 

purpose of the study was to: 1) compare consumers’ automotive 

needs, demands and preferences across the buying cycle; 2) 

explore the factors that drive automotive buying behavior and 

impact consumers’ relationships with manufacturers and dealers; 

3) address lead management, B2C web strategy and aftersales/ 

servicing; and 4) examine the similarities and differences among 

the countries studied in order to provide a picture of the dynamics 

of individual markets. For this study, Capgemini surveyed almost 

2,700 consumers via telephone in five countries: China, France, 

Germany, the United Kingdom and the United States. The 

composition of the consumer sample in each country was based on 

projectable national samples representative of the population from 

the standpoint of region, age and gender. Nearly all consumers 

surveyed were in-market—that is, intending to purchase or lease a 

new or used vehicle in the next 12 months. In addition, almost 230 

dealer interviews were conducted in the five countries along with 

interviews at nearly 25 manufacturer headquarters or national sales 

offices. European, U.S. and Asian brands were represented among 

the consumers, dealers and manufacturers surveyed. Relevant main 

findings of the study included: consumers are becoming more 

sophisticated and are using the Internet to gain more information 

prior to purchasing new vehicles, and demographic differences are 

more significant especially between the youngest and oldest age 

groups of vehicle buyers in terms of what information they use 

to make purchasing decisions, how they obtain this information, 

and how they make their vehicle purchasing decisions. The study 

findings are based on a demographically representative sample of 

consumers planning to purchase a car within the next 12 months. 

While the results are informative, as they include information from 

countries besides the U.S., they are not exclusively representative 

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of the U.S. market. Regardless, the study does provide information 

on trends that is relevant as all countries (except China) are mature 

car purchasing populations. The findings in this study were used 

to support the discussion in this literature review report of the 

emergence of the web as an information source, the vehicle buying 

cycle, and how demographics impact vehicle purchasing decisions. 

Cars Online 06/07: Understanding the Dynamics of Consumer 

Buying Behaviour and Customer Loyalty was prepared by 

Capgemini in 2006. The purpose of the study was to: 1) explore 

the factors that drive automotive buying behavior and impact 

consumers’ relationships with manufacturers and dealers, address 

lead management, B2C Web strategy and consumer loyalty, and 

examine the similarities and differences among studied countries 

to provide a picture of the dynamics of individual markets. For 

this study, Capgemini surveyed more than 2,600 consumers in five 

countries: China, France, Germany, the United Kingdom and the 

United States. The composition of the consumer sample in each 

country was based on projectable national samples representative 

of the population from the standpoint of region, age and gender. All 

consumers surveyed were in-market—that is, intending to purchase 

or lease a new or used vehicle in the next 18 months. The main 

findings of the study included: consumers are increasingly driven 

by their hearts as well as their heads when it comes to vehicle 

purchasing; customer loyalty is decreasing as consumers expect 

more information faster from manufacturers and dealerships; postsales communications is important to repurchase of same brand 

and/or from same dealership; manufacturers and dealers need to 

work together closely to meet consumer needs; and vehicle buyers 

are using the web in a more targeted fashion. The study findings are 

based on a demographically representative sample of consumers 

planning to purchase a car within the next 18 months. While the 

results are informative, as they include information from countries 

besides the U.S., they are not exclusively representative of the U.S. 

market. Regardless, the study does provide information on trends 

that is relevant as all countries (except China) are mature car 

purchasing populations. The results from this study were used to 

support the discussion in this literature review report of the role of 

psychographics and the growing importance of the web in vehicles 

purchasing decisions. 

Literature Review 61 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inside the Customer/Dealer Relationship: A Qualitative Study 

Examining the Shift of Power and the Influence of the Internet on the 

Vehicle Buying Process in Dealerships was prepared by Capgemini 

in 2006. The purpose of the study was to provide a close-up look 

at the relationship between consumers and dealerships and how this 

relationship changes as consumers become better informed through 

use of the Internet. The study was directed at vehicles dealers to help 

them better prepare to serve better informed consumers. The study 

was based on qualitative research, consisting of observations and 

interviews with consumers and dealers, in both North America (U.S., 

Canada) and Europe (France, UK) at car dealerships representing 

12 North American, European and Asian mid-market brands. This 

approach provided the opportunity to observe both what was said 

and what was done in order to understand behavioral trends and 

practices. The main findings of this study were: greater transparency 

is essential to improving the customer/dealer relationship because 

consumers have access to a seeming bottomless well of information 

from the Internet; the more knowledgeable consumers become about 

the vehicle buying process, the more the balance of power shifts in their 

favor; consumers increasingly demand a personalized and customized 

approach during the vehicle buying process; customers want to be seen 

as individuals, as people in their own right who cannot be reduced to 

a box in a grid; and the customer/dealer relationship is not a one-sizefits-all formula , it can vary considerably depending on a consumer’s 

degree of advance knowledge. The results of this qualitative study are 

informative, as they include information from customers and dealers 

in the U.S., Canada, France, and the U.K., but are not representative 

of the U.S. market. Regardless, the study provides information on 

trends related to how consumers gather information to inform their 

vehicle purchasing decisions and consumer/dealer relationships in 

mature car purchasing countries. The findings from this study were 

used to support the discussion in this literature review report of how 

the Internet is being a more important source of information during 

the vehicle purchasing process. 

Cars Online 07/08: Responding to Changing Consumer Trends and 

Buying Behaviour was prepared by Capgemini in 2007.The purpose 

of the study was to provide insights to help vehicle manufacturers 

and dealers develop and execute more effective strategies in sales, 

marketing, advertising, aftersales service, customer relationship 

management, and manufacturer/dealer collaboration. For this 

study, Capgemini surveyed more than 2,600 consumers in five 

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countries: China, France, Germany, the United Kingdom and the 

United States. The composition of the consumer sample in each 

country was based on projectable national samples representative 

of the population from the standpoint of region, age and gender. 

All consumers surveyed were in-market—that is, intending to 

purchase or lease a new or used vehicle in the next 18 months. The 

main findings from this study include: consumer interest in online 

purchasing is growing as consumers become more sophisticated in 

use of the web; online tools such as search engines, blogs, and web 

forums are becoming key information sources for vehicle buyers; 

consumers are more interested in purchasing “green” vehicles; 

vehicle buyers want their information fast, if don’t get it they will 

switch dealers, brands, or both; and personalized communications 

have a significant impact on repurchase decision. The study findings 

are based on a demographically representative sample of consumers 

planning to purchase a car within the next 18 months. While the 

results are informative, as they include information from countries 

besides the U.S., they are not exclusively representative of the U.S. 

market. Regardless, the study does provide great information on 

trends that is relevant as all countries (except China) are mature 

car purchasing populations. Information from this study was 

used to support discussion in this literature review report of the 

vehicle purchasing cycle, information sources and the use of the 

web in vehicle purchasing, how psychographics influence vehicle 

purchases, and other factors that influence vehicle purchase such as 

reliability, safety, price, and fuel economy. 

Cars Online 08/09: 10th Annual Global Automotive Study: 

Tracking Consumer Buying Behavior in Both Mature and 

Emerging Markets was prepared by Capgemini in 2008. The 

purpose of the study was to provide automotive manufacturers 

and dealers with insights into changing consumer dynamics in 

both mature and developing markets, and to help the industry gain 

a better understanding of how to successfully anticipate evolving 

consumer needs and demands. The study was based on a survey 

of more than 3,100 consumers in eight countries: Brazil, China, 

France, Germany, India, Russia, the United Kingdom and the 

United States. The composition of the consumer sample in each 

country was based on projectable national samples representative 

of the population from the standpoint of region, age and gender. 

All consumers surveyed were in-market (20% plan to buy or lease 

a vehicle within three months; 25% in three to six months; 40% in 

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six to 12 months; and 15% in 12 to 18 months). The main findings 

of the study included: fuel economy is as important a factor in a 

consumer’s choice of vehicle as are safety and reliability; consumers’ 

demand for online vehicle buying continues to grow (in 2008, 44% 

of consumers said they were likely or very likely to purchase a 

car entirely over the Internet if that capability were available, up 

from 20% the previous year); consumers are confident in their 

knowledge about green vehicles and are increasingly likely to own 

fuel efficient and alternative-fuel cars, although consumers are not 

prepared to pay a high premium to go green - 85% of respondents 

expect to pay less than 10% extra for a fuel-efficient or alternativefuel car; consumers are increasingly demanding about the speed 

of response they expect from dealers and manufacturers; most 

consumers are satisfied with the vehicle buying process, but they 

see plenty of room for improvement; and consumers said that less 

haggling and pressure by dealer salespeople would increase their 

vehicle buying satisfaction level. The study findings are based on a 

demographically representative sample of consumers planning to 

purchase a car within the next 18 months. While the results are 

informative, as they include information from countries besides the 

U.S., they are not exclusively representative of the U.S. market. 

Regardless, the study does provide great information on trends 

in car purchasing behaviors. Study results were split out between 

those for mature and those for emerging markets. Those mature 

market results were used to support the discussion in this literature 

review report of the growing importance of the Internet in vehicle 

purchasing decisions, and the reasons for buying green vehicles. 

Cars Online 09/10: Understanding Consumer Buying Behavior 

in a Volatile Market was prepared by Capgemini in 2009. The 

purpose of the study was to look at online buying of vehicles 

and parts/accessories, alternative-fuel vehicles, and aftersales/ 

servicing. The study also looked at what consumers saw as the 

biggest changes they expect to make in how they shop for and 

buy vehicles in the coming years. The study was based on a survey 

of more than 3,000 consumers in eight countries: Brazil, China, 

France, Germany, India, Russia, the United Kingdom, and the 

United States. The composition of the consumer sample in each 

country was based on projectable national samples representative 

of the population in terms of region, age and gender. All consumers 

surveyed were in-market (24% plan to buy or lease a vehicle within 

three months; 29% in four to six months; 11% in seven to nine 

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months; and 36% in 10 to 12 months). The main findings of the 

study relevant to this literature review were: usage of the web as a 

key information source during the vehicle buying process continues 

to increase with almost 90% of consumers today (2009) using the 

Internet to research vehicles, up from 61% in 2005; consumers 

want to buy vehicles and parts and accessories online due to lower 

prices and an alternative to the traditional dealer model with 

nearly 40% of respondents saying they would like to buy a car 

over the Internet; green vehicle ownership continues to rise as 

environmental concerns grow, with 41% of consumers saying they 

currently own a fuel-efficient or alternative-fuel vehicle, up from 

36% the year before, and another 30% saying they plan to buy 

a fuel-efficient or alternative-fuel vehicle; as the duration of the 

vehicle buying cycle contracts, automotive companies have less 

time to influence purchases as consumers can quickly and easily 

get vast amounts of information from the Internet; and a number 

of indicators point to a growing desire for improved ease and 

speed of transaction, consumers expect a dealer to be responsive 

and almost one-quarter of respondents point to ease and speed of 

transaction as the key reason for buying a vehicle online, and 30% 

say it is the driving factor behind their desire to purchase parts 

and accessories over the web. The study findings are based on a 

demographically representative sample of consumers planning to 

purchase a car within the next 18 months. While the results are 

informative, as they include information from countries besides the 

U.S., they are not exclusively representative of the U.S. market. 

Regardless, the study does provide great information on trends in 

car purchasing behaviors. The results of this study were used to 

support the discussion in this literature review report of the growing 

importance of the Internet in vehicle purchasing, the vehicle buying 

cycle, the reasons for buying green vehicles. 

The Relationship of Vehicle Type Choice to Personality, Lifestyle, 

Attitudinal, and Demographic Variable was prepared by Choo and 

Mokhtarian in 2002. The purpose of the study was to explore how 

travel attitude, personality, lifestyle, and mobility impact individual 

vehicle type choices. The data is based on a 1998 mail-out/mailback- survey of 1,904 residents of three different neighborhoods 

in the San Francisco Bay area representing suburban and urban 

areas. Based on the data, the authors developed a disaggregate 

discrete choice model to be able to estimate the effect of key 

variables on the probability of choosing vehicle types. The model 

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determined that specific vehicle types have distinct characteristics 

with respect to travel attitude, personality and lifestyle. Based on 

their research, the authors concluded that in addition to traditional 

demographics, travel attitude, personality, lifestyle, and mobility 

factors have significant impact on individual’s vehicles type choices. 

The findings of this study are based on the three neighborhoods 

surveyed in the San Francisco Bay area, and are therefore not 

representative of the U.S. populations as a whole. Regardless, 

the researchers carefully selected these three neighborhoods to be 

representative of countless other similar neighborhoods in the U.S. 

These findings provide relevant information on how demographics 

influence vehicle choices. These findings were used to support the 

discussion in this literature review report of how psychographics 

impact vehicle purchasing choices. 

Automotive Gen Y Survey Findings was prepared by Deloitte 

in 2008. The goal of the study was to report findings from the 

Connecting with Gen Y: Making Cars Cool Again survey. It 

provides information to prepare the auto industry for Generation Y 

by shedding insight into what captured the automotive imagination 

of this dynamic age group. The information was based on a survey 

administered to a randomly drawn panel of 1,006 individuals in 

the U.S. between the ages of 17 and 28 who had previously agreed 

to participate in online surveys. The sample was evenly dispersed 

across geographic regions. The main findings included: 

• Safety and comfort were the most important considerations 

for the Gen Y respondents when choosing cars. Gas 

mileage, price, and performance were the most important 

factors in the purchase decision. The factors named most 

often as among the top three reasons that a vehicle was 

cool were exterior styling (44%), affordability (40%) and 

being environmentally friendly (35%). 

• Almost two-thirds (63%) perceived the cost of a vehicle as 

an indicator of quality. 

• Close to half (49%) of respondents preferred foreign vehicle 

brands, compared to only one-quarter who preferred U.S. 

brands. 

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•	� Over one-fourth (27%) said that they expected to be driving 

the same brand in five years and stated that their current 

brand had a range of models to accommodate their future 

needs and that it was affordable. Another 27% said that 

they did not expect to be driving the same brand and stated 

that their current vehicle was all they could afford or that 

it had been given to them. Further, 45% reported that they 

were not sure whether they would be driving the same brand, 

and stated that the decision would depend on their personal 

finances, their lifestyle, and the available incentives. 

•	� The majority (80%) said they are willing to pay more for 

a car that is environmentally friendly. Of those, 62% also 

viewed vehicles produced in an environmentally friendly 

factory as a determining factor in their decision. 

These findings are not representative of U.S. population since the 

survey was administered to online panel members between the 

ages of 17 and 28 who had agreed to participate in such online 

surveys. However, the results were used to support the discussion 

in this literature review report of those factors that impact 

vehicle purchasing such as price, fuel economy, demographics, 

psychographics, and the reasons for buying green vehicles. 

Connecting with Gen Y Making the Short List was prepared by 

Deloitte in 2010 as a follow-up to Connecting with Gen Y: Making 

Cars Cool Again. The goal of this study was to take a deeper look 

at Generation Y’s attitudes and perceptions of vehicles and the 

auto industry. It was based on a survey administered to a randomly 

drawn panel of 1,100 individuals in the U.S., between the ages 

of 18 and 30, who had previously agreed to participate in online 

survey. The main findings included: 

•	� Gas mileage and vehicle affordability emerged as the 

most important considerations for the Gen Y respondents 

purchasing cars. 

•	� Over 63% believed that used vehicles were a greater value 

than new vehicles and they were more than three times as 

likely to purchase a used vehicle over a new one. 

Literature Review 67 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• Over half (53%) stated it was important that the vehicle 

be manufactured in an American factory no matter what 

brand it was. 

• Over two-fifths (42%) reported they expected to be driving 

the same vehicle brand five years later. This was a 15% 

increase in brand loyalty from 2008 wherein only 27% 

indicated that they expected to be driving the same brand 

five years later. 

• Over three-fifths (64%) stated that they were willing to 

pay more for a vehicle that was environmentally friendly 

and saves money on energy costs. Close to three-fourths 

(73%) reported that the environment was an extremely 

important factor when purchasing a vehicle. Half (50%) 

believed that the type of vehicle they drove directly affected 

the environment. 

• Close to three-fifths (58%) reported that they did not look 

for advice or information on blogs or social media forums 

before purchasing a vehicle. Further, over three-fifths 

(64%) reported that they did not look for information 

about a brand or model on social networking sites (such as 

Facebook, etc.) when shopping for a vehicle. Instead, the 

majority (80%) tended to turn to on-line search engines 

(Google or Yahoo!) to search for information on vehicles 

and they trusted auto manufacturers’ sites the most. 

• Over three-fifths (62%) reported that they preferred the ‘no 

haggle’ method when purchasing a vehicle. The majority 

(85%) reported that they would prefer to know the final 

selling price upfront (by eliminating vehicle incentives from 

the vehicle purchase equation) and more than 60% stated 

they would prefer to skip pricing negotiations altogether 

with a salesperson. Additionally, they indicated that they 

would prefer to get the information they need over the 

Internet from the dealer rather than having face-to-face 

conversations with salespeople. 

68 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

These findings are not representative of U.S. population since the 

survey was administered to online panel members between the 

ages of 18 and 30 who had agreed to participate in such online 

surveys. However, the results were used to support the discussion 

in this literature review report of those factors that impact 

vehicle purchasing such as price, fuel economy, demographics, 

psychographics, and the reasons for buying green vehicles. 

Gen Y + Sustainability was written by Michigan State University in 

collaboration with Deloitte in 2010. The goal of the paper was to 

provide an understanding of Gen Y’s understanding of sustainable 

technologies, the degree to which Gen Y cares about sustainability 

and if they are willing to pay to embrace these ideas, and the 

“perceived monetary value” of these sustainable technologies. 

The paper used data from the 2009 Deloitte Automotive Group 

Generation Y Survey, focus groups and conjoint analysis (conducted 

on a nationally-representative sample of 200 Gen Y respondents) 

to explain Gen Y’s “green” mindset. The main takeaways from 

this paper were: Gen Y is becoming more stable and homogenous 

as it matures into adulthood (as against the popular belief that 

Gen Y is thought of as autonomous and highly individualistic); 

educating consumers and communicating common industry wide 

sustainability standards is paramount for the auto industry (Gen 

Y lacked clear understanding of the different types of “clean” 

energy); Gen Y’s value of sustainability and green technologies is 

tied to dollar savings (both environmental and economic advantage 

must be communicated whereby environmental logic must have 

economic logic as its backbone); and MPG is not a sustainable 

differentiator of value proposition to differentiate between vehicles 

(small MPG differences between vehicles were of little value to 

consumers). 

These findings are not representative of U.S. population since 

Deloitte’s survey was administered to online panel members 

between the ages of 18 and 30 who had agreed to participate in 

such online surveys. The conclusions in this study were used to 

support the discussion in this literature review report of the role of 

demographics in vehicle choice, reasons for buying green vehicles, 

barriers to increasing market share of green vehicles, and vehicle 

choice among green vehicles. 

Literature Review 69 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A New Era: Accelerating Toward 2020 – An Automotive Industry 

Transformed was prepared by Deloitte in 2009. The goal of the 

report was to offer Deloitte Touche Tohmatsu’s (DTT) senior 

automotive leaders’ perspectives on the structural changes and 

major customer, technology, and people trends expected to 

transform the auto industry over the next decade. The report 

highlighted the following trends in the U.S.: 

• The United States is one of the six markets (others are 

Western Europe, Japan, Korea, China and India) that will 

dominate as the center of design and manufacturing for 

original equipment manufacturers and their suppliers. 

• U.S. auto consumers will be more cost conscious and will 

look for value of money and safety as the most important 

features. 

• The median age of the population in United States will go 

up and car manufacturers will need to address the changing 

priorities of older drivers in order to remain competitive. 

• Environmental considerations will weigh heavily on the 

auto industry toward 2020 and there will be a fierce 

competition to develop and produce electric vehicles 

spurred by both customer demand and government 

incentives. 

This report represents the views of Deloitte’s automotive practice 

based on their work and experience in the field. The conclusions 

in this report were used to support the discussion in this literature 

review report of the vehicle buying cycle, how safety impacts 

vehicle choices, fuel-efficient/low emissions vehicle options, and 

reasons for buying green vehicles. 

Gauging Interest for Plug-In Hybrid and Electric Vehicles in the US 

was prepared by Ernst and Young in 2010. The goal of the survey 

is to understand consumer awareness of electric vehicle technologies 

and reveal the factors that may influence them to purchase an electric 

vehicle. The survey was conducted with 1,000 U.S. licensed drivers 

across all 50 states. The survey found that public awareness of 

emerging powertrain technology remains very weak across the United 

States, and the rising price of fuel is the main factor driving interest 

70 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

in electric vehicles, with concerns about energy security and climate 

change growing in importance. The largest concerns in purchasing an 

electric vehicle are vehicle cost and driving and battery range, although 

most consumers do not need to cover long distances regularly. These 

findings may not be representative of U.S. licensed drivers since the 

report does not clearly indicate how the sample was drawn. They were 

used to support the discussion in this literature review report of the 

reasons for buying fuel efficient/low emission vehicles, and barriers to 

increasing the market share of green vehicles. 

Evaluating the Consumer Response to Fuel Economy: A Review 

of Literature was prepared by Helfand and Wolverton in 2009. 

The purposed of report was to review literature on the role of 

fuel economy in consumer’s vehicle purchasing decisions, review 

consumer vehicle choice models focusing on the role of fuel 

economy, examine consumer and producer behavior in the market 

for fuel economy, and assess the potential contributions of consumer 

vehicle choice modeling to regulatory analysis. The main findings 

of the literature review were: consumer vehicle choice models can 

used to help estimate how regulatory changes will impact consumer 

behavior, however, the literature review also noted the wide variance 

in these models on the value consumers place on fuel economy; 

consumers continue to under-value energy efficiency; producers 

appear to provide less fuel economy than consumers are willing 

to buy; and while consumers pay attention to fuel economy when 

they purchase vehicles, there is more to learn about how to model 

the role of fuel economy in consumers’ decisions. The results of the 

study were based on the authors’ review of relevant literature on fuel 

economy and vehicle choice models. The findings from this literature 

review were used in this literature review report to support the 

discussion of how fuel economy impact vehicle purchasing decisions. 

Providing Consumers with Web-Based Information on the 

Environmental Effects of Automobiles was prepared by Nye, Greene, 

Hopson, and Saulsbury in 2003. Findings are based on focus groups 

conducted in Knoxville, TN and Los Angeles, CA with seven to ten 

participants per group and lasting two hours. The focus groups were 

comprised of respondents between 18 and 64 years of age who (1) 

gathered information using the Internet, (2) participated in one or 

more “environmentally friendly”activities, and (3) were in the market 

for a new or used vehicle within 6 months. The purpose of the focus 

groups was to explore and understand how participants responded 

Literature Review 71 
 

 

 

 

 

 

 

 

 

 

 

to the different ratings and measurements of environmental effects 

provided by four websites: www.fueleconomy.gov, www.epa.gov/ 

greenvehicles, American Council for and Energy Efficient Economy 

(ACEEE) www.greencars.com, and California Air Resources Board 

(CARB), www.arb.ca.gov/msprog/ccbg/ccbg.htm (California group 

only). Participants were asked to view websites prior to the focus 

group. The focus groups revealed that while participants in both 

cities understood some of the environmental effects of producing 

and operating automobiles, they rarely factored these effects into the 

decision process when purchasing a new or used vehicle and until 

consumers understand that the environmental effects are issues that 

affect them personally (such as safety or cost of fuel) they are not 

as likely to factor environmental concerns into the buying equation. 

Most participants would prefer some kind of overall environmental 

score that they could trust, and that would be applicable across the 

country and across all vehicles. There was a great deal of skepticism 

about the motives and actions of the government, auto manufacturers 

and auto dealers. Participants would use environmental information 

if it were readily available (where they normally go for information, 

such as Consumer Reports or other automotive magazines). Website 

content is important, but needs to be simple and quickly accessible, 

i.e., each number or rating system should be fully explained within 

the chart or on the same page. Focus groups provide qualitative data 

based on a structured set of questions.The results become meaningful 

when participants in multiple groups do or do not come to similar 

conclusions. Focus group results can be used to provide qualitative 

insights on particular issues and can not be used to represent the 

views of a larger population demographic and geographic area. The 

conclusions of these focus groups were used to support the discussion 

in this literature review report of the reasons for buying fuel efficient/ 

low emission vehicles. 

Capitalizing on Change: The Electric Future of the Automotive 

Industry was prepared by Price Waterhouse Coopers Automotive 

Practice in 2009. The report is part of the Global Automotive 

Perspectives services, which provides an industry analysis of topof-mind issues facing automotive executives. The report analyzes 

the impact of electric vehicles on the automotive industry. The 

report identifies several challenges that may slow and/or impede 

the market penetration of electric vehicles, including limited driving 

ranges, lengthy battery charge times, inadequate infrastructure 

(lack of charging station network), and higher upfront costs. The 

72 EPA Fuel Economy Label Redesign 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

report concludes that short-term gains from incentives combined 

with strategic large-scale investment are required to make electric 

powertrains a viable consumer option and achieve effective cost 

competition with traditional powertrain technology. Current 

business models will adapt to the change, with fleets being the 

likely wide-scale introductory channel. This report is based on the 

work and experience of the PriceWaterhouseCoopers Automotive 

practice, and represents the views of the authors. Its conclusions 

were used to support the discussion in this literature review report 

of the barriers to increasing the market share of green vehicles. 

Technologies and Policies for Controlling Greenhouse Gas 

Emissions from the U.S. Automobile and Light Truck Fleet was 

prepared by Steve Plotkin of the Center for Transportation Research 

at the Argonne National Laboratory. The paper focuses on policies 

and technologies for increasing vehicle energy efficiency, with 

a focus on the light-duty vehicle fleet. The report concludes that 

while it is technologically feasible to improve the fuel efficiency of 

the U.S. auto and light vehicle truck fleets, many of the available 

technologies require trade-offs that manufacturers are unwilling to 

or unable to meet in today’s market and regulatory environment. 

The efficiency of the light-duty vehicle fleet will remain essentially 

stagnant over time in the absence of an unforeseen change in 

market conditions or strong new policy measures, such as more 

stringent CAFE standards, significantly higher gasoline taxes, or 

gasoline price increased caused by sustained increases in world oil 

prices. This paper represents the author’s interpretation of a variety 

of industry and academic sources on this subject. The author’s 

conclusions were used to support the discussion in this literature 

review report of existing consumer education campaigns. 

Automobile Buyer Decisions about Fuel Economy and Fuel 

Efficiency was prepared by Turrentine and Kurani in 2004. The 

methodology used for this study was semi-structured interviews with 

57 households across nine lifestyle sectors, such as hybrid vehicle 

buyers, financial analysts, and off-road enthusiasts. The strongest 

finding from the interviews was that consumers do pay attention to 

the price of fuel on the day they buy it, but do not consider the costs 

of fuel over time. Households interviewed were unable to determine 

the potential fuel savings of buying a more fuel efficient vehicle 

and in most cases overestimated the potential savings thinking 

they could recover an investment of several thousands dollars in 

Literature Review 73 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a couple of years. The authors offer two hypotheses: 1) consumers 

do not pay attention to fuel costs because of the low price of fuel 

and the limited fuel consumption instrumentation; and 2) vehicles 

carry too many other attributes of high value to consumers which 

minimizes the value of fuel efficiency. Overall, the authors conclude 

that consumers do not behave in economic rational way in regards 

to fuel economy. They lack the basic building blocks needed to 

make calculated decision about better fuel economy because they 

do not keep track of fuel costs over time, and do not make vehicle 

purchasing decisions based on potential payback from better fuel 

economy. The results of this study are attributable only to the 57 

interviewed households. They become meaningful and interesting 

when the findings become consistent across multiple households 

and lifestyle sectors. For our purposes, the results provide an 

interesting case study on how households think about fuel economy 

and their own use and the cost of fuel. The study findings were used 

to support the discussion in this literature report of the role of fuel 

economy in vehicle purchasing decisions. 

Car Buyers and Fuel Economy? was prepared by Turrentine and 

Kurani in 2006. The goal of the study was to investigate how U.S. 

consumers thought and behaved with respect to automotive fuel 

economy. It was based on the same information used for their 

2004 study (see above) - Automobile Buyer Decisions about Fuel 

Economy and Fuel Efficiency. The main findings were that none of 

the households analyzed their fuel costs in a systematic way in their 

automobile or gasoline purchases, and almost none of the households 

tracked gasoline costs over time or considered them explicitly in 

household budgets. While many of the households knew the cost of 

their last tank of gasoline and the unit price of gasoline on that day, 

they rapidly forgot such accurate information and replaced it with 

typical information. Such loss of information resulted in the lack 

of basic knowledge needed to make economically rational decisions 

while buying a vehicle. As a result, they made large errors estimating 

gasoline costs and savings over time. In addition, the study found 

that consumers valued fuel economy not only from the cost savings 

perspective but also attached symbolic value to it. The paper is based 

the results of the Turrentine and Kurani 2004 study described above 

and is subject to the same limitations. The conclusions of this paper 

were used to support the discussion in this literature report of how 

fuel economy impacts vehicle purchasing decisions. 

74 EPA Fuel Economy Label Redesign 
 

 

 

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The Boston Consulting Group. (2009). The Comeback of the Electric 

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TRW Automotive. (2003). American consumers placing more 

importance in auto safety systems, according to TRW automotive 

survey. Retrieved from http://www.prnewswire.com/cgi-bin/ 

micro_stories.pl?ACCT=683938&TICK=TRW13&STORY=/ 

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economy? Energy Policy, Volume 35, Issue 2, February 2007, 

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Woods, L. (2010). New Car Reliability Predicted by Consumer 

Reports. Retrieved from http://www.streetdirectory.com/travel_ 

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Additional works read 

Accenture. (2009). New Faces, Places and Spaces: Customercentric principles for acquiring customers in today’s multi-polar 

world. Retrieved from https://www.accenture.com/NR/rdonlyres/ 

C0CE79B5-EEC9-464B-B894-E3C7457E690A/0/Accenture_ 

Customer_Centricity_In_The_Multi_Polar_Worldv5.pdf 

Choo, S., & Mokhtarian, P.(2004). What type of vehicle do people 

drive: The role of attitude and lifestyle in influencing vehicle type 

choice. Transportation Research Part A 38, 201–222. Retrieved 

from http://www.uctc.net/papers/721.pdf 

Flees, L, & Senturia, T. (2008). After-Sales Service Key 

to Retaining Car Buyers. Business Week. Retrieved from 

http://www.businessweek.com/lifestyle/content/sep2008/ 

bw20080923_118246.htm 

Garms, M. (2009). Managing the Lengthening Consumer 

Purchase Cycle. Retrieved from http://www.dealermarketing. 

com/advertising-menu/marketing-solutions/1765-managing-thelengthening-consumer-purchase-cycle.html 

GfK NOP Automotive (2009). LowCVP Car Buyer Attitude 

Survey [PowerPoint slides]. Retrieved from http://www.lowcvp. 

org.uk/assets/reports/LowCVP.pdf 

Jackson, B., & Loehr, J. (2005). Shifting Gears as Gas Prices Drive 

Vehicle Evolution. Retrieved from http://www.boozallen.com/ 

media/file/151593.pdf 

Jager, M., & Wheeler, S. (2005). “I Love What You Do For 

Me”: Enhancing the Automotive Customer Experience through 

Customer-Sensing Capabilities. Booz Allen Hamilton. Retrieved 

from http://www.apprenticesystems.com/Automotive%20 

Customer%20Experience%20LO2.pdf 

Kelley Blue Book. (2008). Leading New-Car Interior and Exterior 

Designs Named in Q2 Brand Watch Study: Brand Perceptions of 

In-Market New-Car Shoppers Revealed in Quarterly Kelley Blue 

Book Marketing Research. Retrieved from http://mediaroom.kbb. 

com/index.php?s=43&item=142 

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Kim, H., Lee, J., & Kim, D. (2006). The Impact of Age and 

Health on Vehicle Choices among Elders. Journal of Family and 

Economic Issues, Volume 27, Number 3. Retrieved from http:// 

www.springerlink.com/content/d6v553654851h755/ 

Madsen, J., Ghiocel, D., Gorsich, D., Lamb, D., & Negrut, D. 

(2009). A Stochastic Approach to Integrated Vehicle Reliability 

Prediction. Proceedings of the ASME 2009 International 

Design Engineering Technical Conferences & 7th International 

Conference on Multibody Systems, Nonlinear Dynamics, and 

Control, IDETC/MSNDC 2009, San Diego, California, USA. 

Retrieved from http://www.ghiocel-tech.com/publications/ 

DETC2009-87487.pdf 

Martin, E. (2009). New Vehicle Choice, Fuel Economy and 

Vehicle Incentives: An Analysis of Hybrid Tax Credits and the 

Gasoline Tax. University of California Transportation Center, 

UCTC Dissertation No. 164. Retrieved from http://www.uctc.net/ 

research/diss164.pdf 

Morgan, C., & Levy, D. (2002). Why marketers fail to understand 

the mature market. Quirk’s Marketing Research Review. 

Retrieved from http://www.quirks.com/articles/a2002/20021205. 

aspx?searchID=70198004&sort=9 

Morgan, C., Levy, D., & Fortin, M. (2002). Psychographic 

segmentation. Communication World. Retrieved from http:// 

goliath.ecnext.com/coms2/gi_0199-921555/Psychographicsegmentation-how-to-increase.html 

Newcomb, K. (2007). Google: Search Key to Auto-Buying Cycle. 

Retrieved from http://blog.searchenginewatch.com/070921-084917 

Noblet,C., Teisl, M., & Rubin, J. (2006). Factors affecting 

consumer assessment of eco-labeled vehicles. Transportation 

Research Part D, Vol. 11, Issue 6. pp. 422–431. Retrieved online 

from http://www.sciencedirect.com/science?_ob=ArticleURL&_ 

udi=B6VH8-4M0S3GF-1&_user=5636254&_rdoc=1&_ 

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Pellon, M., Eppstein, M., Besaw, L., Grover, D., Rizzo, D., 

& Marshall, J. (2010). An agent-based model for estimating 

consumer adoption of PHEV technology. TRB 2010 Annual 

Meeting. Retrieved from http://www.uvm.edu/~transctr/ 

publications/TRB_2010/10-3303.pdf 

Saad, L. (2009). “Buy American” Feeling Grows as Automakers 

Struggle. Retrieved from http://www.gallup.com/poll/116356/buyamerican-feeling-grows-automakers-struggle.aspx 

Saruk, G. (2010). What were you thinking? Understanding Cognition 

and Brand Behavior. Alert Magazine, Vol. 50, No. 2, pp. 24-26. 

Spalding, Stephen R. and King, Mark J. (2006) Motor Vehicle 

Safety Levels - Considerations for Consumers in Used Vehicle 

Purchasing Decisions. In: Australasian Road Safety Research, 

Policing and Education Conference, 25-27 October 2007, Surfers 

Paradise, Qld. Retrieved from http://eprints.qut.edu.au/9999/ 

Teisl, M., Rubin, J., Noblet, C., Cayting, L., Morrill, M., Brown, 

T., & Jones, S. (2004). Designing effective environmental labels 

for passenger vehicle sales in Maine: results of focus group 

research. Maine Agricultural Experiment Station, Report 

434. Retrieved from http://www.umaine.edu/mafes/elec_pubs/ 

miscrepts/mr434.pdf 

The Boston Consulting Group. (2007).Shifting Battlegrounds in 

the Passenger Car Market. Retrieved from http://www.bcg.com/ 

documents/file15072.pdf 

The Boston Consulting Group. (2008).Envisioning an Uncertain 

Future: Scenarios for Passenger Car Markets in 2020. Retrieved 

from http://www.bcg.com/documents/file15266.pdf 

The Dohring Company. (2003).The 2003 National Automotive 

Consumer Study [PowerPoint Slides]. Retrieved from http://www. 

dohring.com/studies/pdf/2003NatStudy.pdf 

Turrentine, T., Kurani, K., & Heffner, R. (2008). Fuel Economy: 

What Drives Consumer Choice? Access Magazine, 31, pp. 14 –19. 

Retrieved online from http://pubs.its.ucdavis.edu/download_pdf. 

php?id=1159 

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Viswanathan,S., Kuruzovich, J., Gosain, S., & Agarwal, R. (2005). 

Online Infomediaries and Price Discrimination: Evidence from 

the Auto-Retailing Sector. Journal of Marketing, Vol. 71, Issue 3, 

pp. 89-107. Retrieved online from http://www.stern.nyu.edu/ciio/ 

WorkOnline/IS0607/102606.pdf 

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