How the demand for personal vehicles is set to rise in the post covid world

Updated: Aug 14, 2020 11:22 AM

As per a BCG survey, between 40% and 60% of respondents in the US, China and Western Europe said they will be using public transit much less frequently

As India ‘unlocks’ and businesses resume in various parts of the country, people seem reluctant towards public transportAs India ‘unlocks’ and businesses resume in various parts of the country, people seem reluctant towards public transport

By Vivek Srivatsa

COVID-19 has disrupted the way we live and move around, in cities and in society as a whole. A new way of living is expected to emerge. With social distancing being the best line of defence against Covid-19, governments across the world have mandated public transportation and ride-sharing companies to limit the number of passengers per vehicle. Now, as India ‘unlocks’ and businesses resume in various parts of the country, people seem reluctant towards public transport, as their reliance on personal mobility continues to rise.

Fewer takers for public transport

As per a BCG survey, between 40% and 60% of respondents in the US, China and Western Europe said they will be using public transit less or much less frequently, in favour of walking, biking or driving their own car. Therefore, the demand for personal mobility will increase. Other shared mobility modes, such as ride-hailing and car-sharing, will also be used less often, but they won’t experience declines as sharp as that of public transit, according to the survey.

The demand for personal mobility will increase due to the customer’s need to ensure personal safety. Although this increase was earlier influenced by other external factors, these numbers will grow further as the need for social distancing and precautionary measures rise.

Furthermore, due to the impact on economic activity, demand will shift towards affordable vehicles which do not compromise on features and safety, in the personal mobility space. A contributing factor will be that the number of first-time buyers will increase along with the number of functional buyers,who also may lean towards
adoption of personal mobility. Additionally, we foresee that people might also start opting for a second vehicle in the family, which mostly could be a smaller car.

A safety-first approach

To drive demand in today’s rapidly changing environment, automotive manufacturers will have to adapt to the ‘new normal’ by reinforcing the credibility of their offerings. Companies can do this by adopting and publicising a safety-first approach, which can help regain and retain the trust of their customers during such testing times. Several
companies are publicising the safety measures being taken by their dealerships on social media platforms. Manufacturers will not just have to sell products,but also shine the light on how they are catering to evolving customer needs, and provide regular customer service to retain existing customers.

OEMs are also pivoting and taking an online-first approach to selling cars for customer convenience, and to increase demand. Several Indian automotive brands (luxury and commercial) have launched a variety of online sales platforms. This has helped reduce crowding at dealerships.

However, even as there is an increase in demand for personal mobility, residents and policymakers everywhere understand that a well-functioning public transit system, and new and shared forms of mobility are vital to the economic livelihood of their cities. Business models may need to be modified, but user economics, environmental health and general societal interests will push for the reinforcement of a diverse urban mobility ecosystem.

The Indian automobile industry will become transformed once this pandemic is under control, paving the way for an urban mobility ecosystem that will be more versatile and diversified.

The author is head–marketing, passenger vehicle business unit, Tata Motors

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