Indian consumer prioritises vehicle experience over the cost has been saved
Indian consumer prioritises vehicle experience over the cost
Deloitte 2023 Global Automotive Consumer Study
National, 17 January 2023: Deloitte’s 2023 Global Automotive Consumer Study (GACS) indicates that in India, despite the fears of inflation, consumers are opting to pay a premium for purchasing their next vehicle. Vehicle intenders in the price bracket INR 10–25 lakh were around 47 percent. For INR 10 lakh and below these were 28 percent. About 57 percent intenders were willing to purchase Electric Vehicles (EVs) from INR 10–25 lakhs and 20 percent in the range of INR 10 lakhs and below.
There is a clear shift in an Indian consumer’s buying pattern, where an average consumer is prioritising experience over cost. Traditionally, the Indian consumer has been cost conscious and cost vs. mileage was the most important parameter for vehicle purchase. The average consumers have defined key factors, such as product quality (62 percent), vehicle features (48 percent), and brand image (46 percent) when moving from one brand to the other.
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.
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’. However, the availability of charging infrastructure, concerns regarding battery safety, and the price premium required to access EV technology are the challenges that remain.
Speaking on the study, Rajeev Singh, Partner and Automotive Sector leader Deloitte Touche Tohmatsu India LLP 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.
As India sets newer trends, the need of the hour will be for Original Equipment Manufacturers (OEMs) and ecosystem stakeholders to work in cohesion and bring innovative business models that bridge the gap of infrastructural challenges with the power of digital technology.”
Other key trends emerging:
- Half of the surveyed consumers (49 percent) prefer to pay for the connected vehicle features and technology upfront as part of the purchase price. This represents a challenge for OEMs looking to build new revenue streams via monthly digital subscription services.
- OEMs are looking to offer in-house insurance products, signaling a significant disruption for the traditional value chain. About 82 percent consumers were interested in purchasing insurance directly from the manufacturer citing ‘convenience’ and ‘cost saving’ over the current provider. Consumers have shown their trust in their servicing dealer (36 percent) and the manufacturer (32 percent), signaling the importance of these stakeholders in the customer relationship.
- Safety is a key priority for India. 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.
- New vehicle vs. used car trend. Per the study, 37 percent consumers want access to cars with the latest technology/features; 22 percent purchased it due to reliability; and 20 percent chose a car due to manufacturer warranty. While opting for a used car, 33 percent consumers preferred it due to cheaper car insurance and 31 percent preferred it due to more value of money.
- 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.
About the study
From 21–29 September 2022, Deloitte surveyed a sample of 1,003 consumers in India. The survey has a margin of error for the entire sample of +/-3.1 percent. The study is fielded using an online panel methodology, where consumers of driving age are invited to complete the questionnaire (translated into local languages) via email.
Note to the editor for reference purposes only:
This press release has been issued by Deloitte Touche Tohmatsu India LLP. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.