“Consumer Attitudes and Perceptions about Safety and Their Preferences and Willingness to Pay for Safety”

Veerender Kaul; Sarwant Singh; Krishnasami Rajagopalan; Michael Coury

doi:10.4271/2010-01-2336

The U.S. National Highway Transportation and Safety Agency's (NHTSA) early estimates of Motor Traffic Fatalities in 2009 in the United States [1] show continuing progress on improving traffic safety on the U.S. roadways. The number of total fatalities and the fatality rate per 100 Million Vehicle Miles (MVM), both show continuing declines. In the 10 year period from 1999 through 2009, the total fatalities have dropped from 41,611 to 33,963 and the fatality rate has dropped from 1.5 fatalities per 100MVM to 1.16 fatalities per 100MVM, a compound annual drop of 2.01% and 2.54% respectively.

The large number of traffic fatalities, and the slowing down of the fatality rate decline, compared to the decade before, continues to remain a cause of concern for regulators. The new Corporate Average Fuel Economy (CAFE) standards requiring vehicle manufacturer to meet a fleet wide fuel economy of 35.5 mpg by 2016, has made it even more challenging to maintain the declining rate of fatalities per 100MVM. Automakers' pursuit of vehicle down-sizing and light-weighting strategies works counter to improving safety, as smaller and lighter vehicles feature lower degree of crashworthiness compared to larger and heavier vehicles (greater track width and wheelbase both have positive impact on vehicle stability and safety).

In Europe, the European Transport Safety Council (ETSC) estimates [2] show that 39,000 people lost their lives in road collisions in 2008 across Europe; 15,400 less than in 2001 but still far from the 27,000 deaths limit which the European Union (EU) set for itself in its 2010 Road Safety Target. The average annual progress since 2001 has been 4.4% instead of the 7.2% needed, which could delay the EU in reaching the 2010 target until 2017. In the EU 79 people are killed per million inhabitants in 2008 compared to 113 in 2001. Disparity in road death rates across Europe has decreased since 2001, and in 2008 there was no longer any EU country with more than 150 road deaths per million inhabitants.

The development of passive safety systems has reached near saturation point and now offers limited potential to reduce fatalities. To reduce fatality rates even further, the focus has shifted to active safety systems and advanced driver assistance systems (ADAS). The recent spate of safety recalls involving electronic malfunctioning is likely to lower consumer confidence in advance safety systems in the short-term and impede the adoption of ADAS systems, as consumers are likely to be less willing to pay extra for ADAS systems.

Even as vehicle makers are finding it hard to meet the stricter and contradictory regulations for safety and fuel efficiency; competitive pressures are forcing them to introduce advanced safety systems to achieve highest safety ratings on their vehicles and to differentiate their products. Such systems include Blind Spot Detection (BSD), Lane Departure Warning (LDW), Adaptive Front Lighting (AFL), Night Vision Systems (NVS), Driver Drowsiness Warning (DDW) and Occupant Monitoring systems.

In today's market environment, where demand is weak and margins tight, it is critical for vehicle manufacturers to offer consumers vehicles with features and functions they value most and avoid costly development and consumer dissatisfaction with implementations.

In this paper, Frost & Sullivan analyzes consumer attitudes towards safety and their preferences and willingness to pay for safety features. The analysis is discussed under the following categories.

1
Consumer attitude and concerns for safety
2
Consumer perceptions toward current active and passive safety systems and collision vulnerability
3
Buyer behavior and the influence of safety in the vehicle purchasing process
4
Safety content and system feature preferences
5
Willingness to pay for safety and optimal safety packages

The analysis is based on an online survey of a sample of vehicle owners across vehicle segments and demographic attributes. The study was conducted by Frost & Sullivan in 2008, in the U.S., and in Europe in 2009.