Vehicle take rates of automated driving features are steadily rising as consumers purchase new vehicles, with the secondary market recognizing the added value placed on these attributes reflected in resale pricing. While we are still in the early days of understanding how quickly the industry will move through the NHTSA’s Automated Driving System (ADS) taxonomy, recent analysis of VIN configuration data from J.D. Power shows that used-vehicle buyers place high value on these technology features.
Adaptive cruise control features — the most prevalent ADS feature on the market today — are well received by consumers, given the convenience and added safety benefits. A close look at these specific automated driving options — and their value — over the past few years shows a steady rise in their contribution to retained vehicle value.
When isolating our analysis of adaptive cruise control, this attribute maintains 60% of its value 36 months after its original purchase date. That’s impressive.
Interest and adoption is growing
We expect this trend to continue, even as the supply of vehicles with these features rise. This is mainly because there is plenty of room for growth. An analysis of purchasing trends between 2015 and 2019 shows an impressive 12% increase in take rates.
When looking at volume-weighted percentages, the picture is even more impressive. In 2015, roughly 2% of the market adopted this technology. In 2019, that number soared to 37%, with the highest adoption rate (17%) unsurprisingly concentrated to luxury segments. Growth, however, is also manifesting itself rapidly in mainstream models, with 12% adoption rate.
ADS race exposes culture clash between Silicon Valley and automotive incumbents
One of the interesting dynamics surrounding the development and deployment of current and emerging ADS technologies is the creative tension being worked out between the automotive establishment and Silicon Valley players that are flexing their muscles in the mobility sector.
Disruptive technology players are bringing an impressive mindset of innovation and rapid development to the ADS race based on the success that they have experienced in bringing other consumer-facing technologies to market in the cloud, payment systems and personal communications arenas.
The incumbent players have responded to these market pressures impressively but are still placing a high degree of value in the traditional mindset of ensuring that mature, secure and safe platforms are brought to market.
Coming to an optimum balance between these two perspectives will be critical to meeting the rising expectations for new experiences from consumers — especially among younger buyers — while ensuring that strong measures are in place to guard the safety of drivers, pedestrians and the rest of the ecosystem.
Consumers’ trust in their increasingly digital-driven vehicles ultimately will determine the rate of adoption.
Ben Bartosch is manager of forecast analytics at J.D. Power Valuation Services.
He joined the Auto Remarketing Podcast to discuss the impact of ADS features on used-vehicle valuations and more. That episode can be found below.