The consumer demand for personal mobility is expected to record strong growth in 2022, post recovering from effects of extended and intermittent lockdowns. Industry and market research estimates indicate and support positive trends.
Citing industry outlook, the country is witnessing pent-up demand leading to long waiting periods as evident from the announcements by various auto makers. Due to health and safety concerns, Indian consumers are expected to invest in personal mobility and affiliated solutions.
Per recent MX survey, the transport expenses have increased significantly for individuals in the post covid era due to intermittent yet consistent increase in the fuel costs, rising cab fares. However, this had negligible impact on the consumption and usage. The society that got attuned to the work from home regime is gradually recovering after an extended hibernation. This is expected to benefit the entire ecosystem that includes modes of personal mobility including personal vehicles and taxi services.
Indian markets are at its cusp of consumerism and are observing keen interest in technically advanced feature rich vehicles. Glocalization has evolved Indian automotive consumers to demand the features at par with vehicles in the developed world. For e.g. vehicle safety enhancement features such as traction control, auto gear shift, ABS, Cruise Control with speed sensitivity are being marketed by various new entrants to stress on the need for safety. There is near parity amongst various players with almost all graduated to the improved hygiene safety parameters in the entire range of vehicles that they offer. In terms of design and genre, there is an emergence of new sub categories such as mini and micro SUVs.
The paradigm shift to keep track of in the automotive sector is the growth in electric vehicle sales. Improvement in battery performance and low cost of ownership makes it conducive for EVs to enter the vehicle consideration set of intenders.
Focus on creating charging infrastructure is the topic of various government and industry forums. This new ecosystem is expected to boost the adoption and usage of EVs. Leading from the front, the Government of India has identified 11 cities in the country for introduction of EVs in their public transport systems. However, the premium currently may be dissuading consumers from purchasing an electric car.
Government initiated programs such as vehicle scrappage policy in the 2019 which had impacted different consumer segments is going to get pursued in 2022. This is expected to reduce pollution and ensure vehicle fitness. Therefore, the need to scrap and phase out old vehicles was concluded in various government and automotive industry forums. In 2022, strong policy implementation and rigor may lead to demand creation, thereby enhancing sales projections for the new vehicles. This policy however is different for gasoline and diesel vehicles.
Covid had impacted manufacturing across all industries including automotive. Modern cars for their strict emission and efficiency norms are depending on cutting edge semiconductor devices to control engines and various other vehicle modules. The lockdown infected industrial production has led to imbalance in the demand supply equation. This misalignment is hitting the industry as well as the conscious consumer. It will be interesting to monitor the recovery of the component supply chain to allow brands to deliver products to the consumers.
Bludgeoning new vehicle sales due to global supply constraints, boosted the used car market. The market witnessed increased uptake of used cars. This category attracted investments from tech led startups with an attempt to organize and enhance the user’s buying and selling experience. Driven by consumer need and fuelled by aggressive communication, used car marketplaces including CARS24, Spinny, Ola cars recorded growth. It would be interesting to track the evolution of used car sales over the next couple of months. The value for money proposition and improved margins are expected to attract investment leading to growth driven by consumer understanding, marketing research and advanced analytics.
From our experience in consumer behaviour, It is safe to infer that consumers get attune to changing environment, emerging opportunities within their market ecosystem. Improvements in public transport infrastructure, availability of tech platform based smart taxi apps does insinuate consumers to evaluate and consume these compelling alternates to the personal vehicle. Further, from research we know that AI based smart taxi platforms are intelligent enough to offer custom experience based on identified consumer segments and their respective characteristics. This disruption has impacted and may lead to an emergence of value conscious uber cool consumers, with eroded need for personal transport.
These emerging codes are being responded by the industry with communication around schemes such as Car Subscription to ensure active engagement for the value conscious consumer. Constrained city infrastructure, cost of vehicle ownership and non-availability of desired product are other areas that may impact the new vehicle consideration.
Author: Ashwani Arora, Executive Director, Market Xcel
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
