Consumer-oriented strategies in the practice of new car purchasing
Textbox 4.2. Background on Eco Top 10.
4.8 Conclusions and discussion
4.8.1 The ecological modernisation of automotive production-consumption chains The amount of environmental information being produced, and the availability and accessibility of this environmental information have, especially in the Western world, increased to a great extent over the last decades. The quantitative and qualitative increase of environmental information has changed environmental reform to such an extent that scholars even denote that a new mode of environmental governance has materialized (Mol, 2005). While environmental information has always been important as an enabling condition for environmental reform, recently though environmental information has become a constituting and transformative factor (ibid.). It is through the monitoring of environmental flows that ecological concerns become tangible, i.e. monitoring enables the incorporation of ecological concerns into political decision-making processes and industrial design (Van den Burg, 2006). More recent is the change that has taken place in the form and function of environmental monitoring and information. Not only is environmental information used as a tool by governments and industries, environmental monitoring and environmental information are more and more used as tools to inform citizen-consumers (ibid.). At different points in the production-consumption chains environmental information is made visible. At the access points where producers and consumers meet, environmental information is displayed in numerous different ways: on products, on information sheets, on eco-labels or on websites. Also environmental NGOs have found new ways of using environmental monitoring and information to influence production-consumption chains. By using (previously disclosed) information about the environmental performance of car manufacturers and their products, NGOs can exert influence on both ends of the production-consumption chain65.
In this chapter we investigated the role of consumer-oriented informational and fiscal strategies in the practice of new car purchasing. Reverting back to the question posted in the introduction, is the increase in environmental information and monetarisation which were portrayed in this chapter a sign of an increasing ecological rationality in the practice of car purchasing? Are we witnessing an ecological transformation which points to the beginning of the large-scale diffusion of greener vehicles?
According to the theory of ecological modernisation, the ecological transformation of the automotive production-consumption chains (more specifically in this case study the car purchasing practice), can be traced by three consequential steps. First, through environmental monitoring the relevant environmental flows are made visible and tangible. Information about the environmental characteristics of a car can be used by different actors to integrate environmental concerns into various decision-making processes, whether the user is a representative of a car manufacturer (e.g. 65 The case of Transport and Environment provides an interesting example. In the report ‘How clean is your
car brand?’ T&E monitored and revealed the lack of progress in carbon dioxide reductions by the global car industry. While it was fairly common knowledge that car manufacturers would not be able to meet the voluntary agreements made with the European Union, the performance of individual brands was unknown as they were not revealed by the car manufacturing associations (ACEA, JAMA, and KAMA). Transport and Environment were the first to track the progress of individual car brands in reducing emissions, thereby bringing the environmental performance of manufacturers to the forefront and into the spotlight.
Toyota Netherlands where environmental monitoring is used to track the national average of CO2- emissions of Toyota cars), the manager of a lease company (e.g. Leaseplan where environmental monitoring is used to identify a company’s fleet carbon footprint and to provide advisory measures to clients), or an individual consumer (who uses environmental information tools to make sure a fuel-efficient car is purchased). Second, monetarisation is the process where monetary values are being placed on environmental aspects to stimulate and facilitate the incorporation of these aspects in decision-making processes. Finally, substitution is the process where the regular products are gradually replaced by the products with better environmental qualities.
In general, we see that the practice of car purchasing has changed considerably in the last decade. Consumers today are increasingly knowledgeable about (environmentally relevant) vehicle-characteristics and about the practice of car purchasing. This is the result of a strong consumer empowerment which has taken place in the last decade as information has become more accessible. The internet has become one of the most dominant sources of information, and in response the role of car salesmen has shifted from leading to guiding, and from a selling role to advising.
An important outcome of this trend is that the information age has disclosed information about the environmental impact of cars and about alternative vehicles that was until recently inaccessible to consumers. Though mostly initiated by the Dutch government, an increase in the provision of environmental information and fiscal instruments in the practice of car purchasing can be witnessed. In contrast to European-wide conclusions made by ADAC (2005) and TNO (2006) – which mentioned a lack of green car advertisements, and a lack of consumer interests in green cars – in the Netherlands we see different developments. Consumers are asking more and more environmentally related questions in the showroom and car advertisements are actively promoting the environmental aspects of new cars.
In addition, the car salesmen made the comparison between environmental information tools and the NCAP measurement of car safety. The focus groups show the importance currently being attached to car safety, the result of an emancipation process of the social dimension of automotive production-consumption chains which was initiated in the late 1960s. By comparing the environmental dimension with the social dimension the car salesmen reveal a gradual emancipation of ecological concerns in the automotive production-consumption chain.
4.8.2 Societal embedding of environmental information
The role of environmental information provision as a tool to influence the car purchase practice has received much attention over the last five years. For example, the transport advisory council indicates that it is crucial that consumers, at the moment of purchase, have sufficient access to environmental information (Raad Verkeer en Waterstaat et al., 2008). However, this same advisory council also notes that the policies aiming to stimulate the purchase of fuel efficient vehicles (education, information provision, training, and fiscal measures) have achieved only limited success (ibid.). Similarly, in the car market analysis it was mentioned how various reports indicate that the consumer-oriented strategies only had a limited effect on stimulating fuel efficiency in the automotive sector (Ecorys, 2011b).
Two important points can be made about this conclusion. First, this chapter has pointed out the importance of the social context in which environmental information is provided. The social shaping of access indicates that one cannot assume that consumers are empowered with information solely by increasing the amount of environmental information (Van den Burg, 2006). We showed that it is worthwhile to analyse specifically what environmental information is provided, via which structures of provisions and how they are meaningful supported at important sites of the consumption junction. For instance, the focus groups show that current information tools have not successfully assisted in reducing the complexity of the environmental information. Furthermore, as this research shows, these processes do not end once a label is introduced; in the actual practice of purchasing a car, the meaning of the energy efficiency label is also contested by car-salesmen. Furthermore, whether or not environmental information tools exert influence depends on the embedding in automotive production-consumption chains. The notion of embedding refers to the number of societal actors who use the label, and the number of instances in which the label is used because, by doing so, the label is reproduced and justified. In the first years of its existence, all legal requirements were fulfilled but not many additional organisations used it (Nijhuis & Van den Burg, 2009). Therefore the energy efficiency label was present in the showroom, but exerted little influence. In recent years, the label can be found more often, for example on automotive websites, but it is also more clearly linked to other policy measures, particularly financial incentives.
The second point is that the impact of consumer-oriented strategies and the correlating consumer purchase practice is greater than the direct environmental change. The success of a label not only depends on the question whether or not it is taken into consideration by consumers. To understand the impact of a label one should investigate how it is developed, how consumers’ interests are articulated, the extent to which the label is contested and the ways in which it is embedded in society. Once a label is successfully embedded, it exerts power through various mechanisms. The fuel efficiency label has put a spotlight on the issue of fuel efficiency in the automotive sector. As such, labelling also exerts influence prior to consumer choice by directing corporations to develop and market different products. Therefore the strict distinction which evaluative reports often make between autonomous improvement in fuel efficiency of new cars due to technological developments, the additional effect of consumer-oriented strategies, and the changing car preferences of consumers is a dubious one as these aspects are clearly interrelated. The case of the European fuel efficiency label has shown that the introduction of the label not only means that consumers make different choices; it also means that producers make different choices. A structural effect of labelling was that car manufacturers brought fuel-efficient models on the Dutch market that had not been for sale beforehand (Nijhuis & Van den Burg, 2009; Van den Burg, 2006).
4.8.3 The system of provision structures consumer-oriented strategies
Another point for discussion is that there seems to be an unequal development in the ecological modernisation within the four systems of provision. In Paragraph 4.2, four different routes for acquiring a new or a used car have been portrayed. In this chapter we have focused on the practice of new car purchasing only.
However, each of the four described routes for acquiring a car is structured by a different system of provision with different participating actors. In line with the social practices approach it is suggested that the structuration of the system of provision heavily influences the way information is provided and accessed by consumers. In general one could say that the systems of provision for new cars and lease cars are much more structured when compared to the systems of provision of used cars, whether these used cars are sold by private consumers or not. It is also clear that the spread of environmental monitoring and monetarisation is not the same in the four different routes for acquiring a car that have been described in this chapter. While gradually environmental information about new cars is becoming more widely available, for used cars this information was until recently almost completely absent. Though used car websites provide very detailed information about car characteristics which allow consumers to specify one’s car search, in 2006 environmental aspects were not one of these characteristics to choose from. Only since a few years these options have been made available. Furthermore, for used-car dealers environmental aspects are currently not high on the agenda. Therefore, car salesmen are in general very ill informed about the environmental aspects of used cars; also no information tools are available to help consumers or car salesmen to point out the environmental aspects of the potential car. Lacking a clear system of provision, needless to say there is little or no information available for consumer-to-consumer sales of used cars. Only an intensive search on car review websites will provide the potential buyer with information about the environmental characteristics of the used car.
Finally, for lease cars, the system of provision is completely different. The provision of lease cars is highly structured by lease companies and the fleet owners of employers. In the last five years a major transformation has taken place in the leasing branch. In the Netherlands attention and interest of the leasing branch for environmental aspects of car leasing is quickly increasing. Lease companies through various mechanisms are undertaking environmental initiatives. Through monitoring leasing companies make information available about the environmental performance of actors and car fleets. Analyses of emissions and fuel consumption is made available to fleet owners and individual car drivers, and in a significant number of cases this is complemented with advise on the possibilities of emission reduction, both at the level of the company’s fleet and at the level of the individual driver (see Appendix A). Thus, brought back to its essence these lease companies have taken up a facilitating and advisory role in promoting green leasing. The provision of lease cars is also structured to a large extent by the company and its fleet owner. The company’s environmental goals, expressed in green procurement as part of the corporate social responsibility programme, can influence the types of car on offer for the lease driver.
Finally, the difference in ecological modernisation between the four different ideal-typically routes are also reflected in the fiscal incentives provided by the Dutch national government. Currently, no direct financial incentives are present which stimulate consumers to take environmental considerations into account during the purchase of a second-hand car. The massive subsidies that have been introduced for the purchase of new cars are therefore in sharp contrast with the lack of incentives for used cars.
4.8.4 Changing consumer attitudes?
The improvement in the eco-efficiency of consumer vehicles in the Netherlands, surging roughly from 2010 onwards, had taken many by surprise. The commonly held perspective has always been that ‘consumers are just not interested in eco-efficient vehicles’. A more fundamental question is therefore whether or not this recent phenomenon truly reflects a structural change in the consumer demand for eco-efficient vehicles (see also Dijk et al., 2012).
The dominant view among policy-makers and industry representatives has always been that environmental considerations play a very minor role in decisions on car purchasing. Type, price, colour, distinction and so on are all considered to be more important. On the one hand, this is confirmed by the consumer focus group, where consumers first mentioned these aspects as being most important. Only a small niche exists for consumers who purchase environmentally friendly cars mainly because of environmental performance of these cars. On the other hand, we see that through various mechanisms an ecological rationality has slowly but gradually permeated the practice of new car purchasing.
Whether or not a structural shift in consumer preferences for alternative vehicles will take place also depends on the ways that car producers and environmental policies are able to connect to the everyday life world perspective of car purchasers. Research by Dijk (2011) indicates that car consumers consist roughly of three sub-groups with regard to engine preferences: one group for which engine price is most important (35%), one group for which engine size is most important (60%), and a green car segment (5%). It is likely that the strong focus of the Dutch government on fiscal strategies has appealed to the first consumer group thereby broadening the market of fuel efficient vehicles from the green car segment only, to the more price aware consumer.
However, these fiscal strategies have also placed a strong economic burden on the Dutch government66. To maintain the strong environmental improvement of the last few years in
the future a more structural connection must be made with the values and preferences of the car purchasers as it is unlikely that the massive subsidies will be maintained. Environmental information tools and fiscal measures are consumer-oriented strategies which aim to influence car purchase decisions at a rather rational and cognitive level. Chapter 3, however, showed the enormous importance of symbolic meanings attached to the car. Car companies, as the main providers of green cars, are crucial for the success of that incorporation process of environmental aspects and the life world of car consumers.
66 In 2010 the reduced governmental income due to the taxation strategies for green new cars was approximately