DETROIT — Gen Y's strong affinity for hybrid vehicles could make it the "generation that leads us away from traditional gasoline-powered vehicles," reported Craig Giffi, vice chairman and automotive practice leader at Deloitte LLP. His comment was in reference to results of Deloitte's annual survey of Gen Y consumers and what they want in an automobile. 

A strong majority (59%) of Gen Y respondents surveyed prefer an electrified vehicle over any other type of car or truck. Moreover, Gen Y consumers heavily favor hybrid gasoline-electric vehicles (57%) over pure battery electric vehicles (2%) or vehicles with a traditional gasoline-only powertrain (37%).

The annual survey, now in its fourth year, canvassed 1,500 Gen Y, Gen X and baby boomer consumers in the United States, as well as 250 Gen Y consumers in China and 300 Gen Y consumers in Western Europe. Deloitte conducted the survey in September and October 2011, and defines Gen Y consumers as those ranging in age from 19 to 31.

According to Giffi, Gen Y consumers may be the game changers in the United States because, at nearly 80 million strong, they are one of the largest domestic automobile buying segments and the largest consumer segment since the baby boomers. Giffi indicates that, according to projections, one out of four new automobiles sold this year in the United States and 40% of vehicles sold in the next 10 years should be bought by a Gen Y consumer.

Additionally, Giffi found that Gen Y consumers are drawn to hybrids for several reasons, most notably, fuel efficiency. According to the study, 89% of Gen Y consumers are considering buying a vehicle that gets better mileage, especially true when gasoline prices rise above $2.75 per gallon — the median price Gen Y consumers see as “fair.” Further, 49% of Gen Y consumers are willing to pay an additional $300 for each mile per gallon of improvement they can get out of a hybrid — only $50 less than the $350 mile-per-gallon premium that Deloitte estimates a hybrid vehicle currently costs compared to an internal-combustion engine vehicle.

"Gen Y consumers also view hybrid technology as proven and reliable," Giffi said. "Almost 6 in 10 Gen Y respondents prefer a hybrid over any other type of vehicle, while a mere 2 in 100 prefer a pure battery electric vehicle — demonstrating that Gen Y is familiar and comfortable with hybrid technology, but not so much with battery-only technology."

Further, the survey shows that Gen Y respondents are married to the convenience of traditional gasoline-powered automobiles, strongly preferring powertrains that do not require plug-in recharging. Even with their overall preference for hybrids, Gen Y consumers still prefer a non-plug-in hybrid by a margin of more than two-to-one over a plug-in version. 

"Gen Y consumers prefer automobiles that are an extension of their social-media and digital lifestyles," reported Joe Vitale, global automotive sector leader at Deloitte Touche Tohmatsu Limited. "Based on the survey, we found that auto manufacturers may have an opportunity to capitalize on Gen Y's connected lifestyle by developing innovative and low-cost personalization options for this powerful consumer segment.”

In-dash technology is the most important part of a vehicle's interior for a majority (59%) of Gen Y respondents, with almost three-quarters (73%) seeking touchscreen interfaces. Gen Y consumers also rank smartphone applications as highly desirable in a new automobile (72%). In addition, they want to be able to customize their automobile interiors after the initial purchase with embellishments that include technology features, with 77% of respondents indicating they would like to buy additional accessories and upgrades for their automobiles on an ongoing basis.

"Gen Y consumers clearly view their automobiles as more than just a way to get from point A to point B," Vitale said. "They see them as a way to stay connected around the clock, and they're willing to pay it."

On average, Gen Y consumers are willing to spend more than $3,000 for hardware that delivers connectivity.Gen Y consumers also realize that this increased connectivity can create safety issues. The solution is a vehicle that may compensate for the distractions that result from increased connectivity with ramped-up safety features.

"Gen Y consumers are willing to pay for technology that can help them better manage all the distractions created by connectivity," Vitale said. "On average, they will shell out approximately $2,000 for a bundle of safety features like collision-avoidance systems, blind spot detection and sleep alert systems. In fact, Gen Y respondents graded safety bundles as their second most important priority — right behind technology bundles — when ranking their desire to buy additional vehicle features."