There is a clear shift in what the Indian automotive consumers are looking for while buying their next car. Cost is no longer the primary determinant. That’s according to Deloitte’s 2023 Global Automotive Consumer Study. An average consumer is prioritising experience over cost. Product quality, vehicle features and brand image are now key considerations, as per the study.
Safety is another key priority for Indian consumers now. The study shows that consumers are willing to share data and/or vehicle/operational data with the manufacturer or a third party to receive the necessary updates to have a better and safer driving experience. About 85 percent consumers preferred getting updates on safer routes and 84 percent preferred getting maintenance updates and vehicle health reporting/alerts along with updates to improve road safety and prevent potential collisions.
Traditionally, the Indian consumer has been cost conscious and cost vs. mileage was the most important parameter for vehicle purchase. But now, the study shows consumers are opting to pay a premium for buying their next vehicle.
EVs gaining traction
Vehicle intenders in the price bracket Rs 10–25 lakh were around 47 percent. For cars worth Rs 10 lakh and below, the percentage of buyers was down to 28 percent. About 57 percent intenders were willing to buy electric vehicles ranging between Rs 10–25 lakh and 20 percent in the range of Rs 10 lakhs and below.
With favourable policies on climate change and self-reliance, consumer interest in EVs is growing as they look to lower their operating costs. The top three reasons for purchasing an EV, included ‘low fuel costs’, ‘better driving experience’, and ‘less maintenance’.
Across all age groups, consumers prefer to pay for public EV charging via payment apps on their smartphones, signaling the need for easy-to-use digital payment tools. However, the availability of charging infrastructure, concerns regarding battery safety and the price premium required to access EV technology are the challenges that remain.
For a better experience and preferred choice of vehicle, around 55 percent consumers were willing to accept a longer delivery time (up to 4–12 weeks). This opens the door to a more ‘build to order’ retail paradigm.
Speaking on the study, Rajeev Singh, Partner and Automotive Sector leader, Deloitte Touche Tohmatsu India said “Our consumer study indicates the rising demand and expectation of the Indian consumer, who is not just cost conscious anymore but is considering more than one pragmatic way of mobility experience. This allows them to balance operating costs, and experience through technology (37 percent) whilst making sustainable choices.”
The other interesting trends identified by the Deloitte study indicated that –
-Half of the surveyed consumers (49 percent) prefer to pay for the connected vehicle features and technology upfront as part of the purchase price.
-OEMs are looking to offer in-house insurance products, signaling a significant disruption for the traditional value chain
Nearly 37 percent consumers want access to cars with the latest technology/features while 22 percent purchased it due to reliability and 20 percent chose a car due to manufacturer warranty. Interestingly while opting for a used car, the study also highlighted that 33 percent consumers preferred it due to cheaper car insurance and 31 percent preferred it due to more value of money.