- Strong willingness to opt for electric vehicles
- Over 54 per cent of buyers are thinking of buying a vehicle in 2021
- Nearly 60 per cent of respondents will consider online purchases
The automotive industry is one of the sectors that have been largely affected by the Coronavirus (COVID-19) pandemic. In an effort to map the road ahead for the sector, CarWale, India’s largest auto media has released the country’s largest, most widespread, and deep-rooted survey of the potential four-wheeler and two-wheeler customers. The Indian Automotive Consumer Canvass (IACC), supported by CEAT Tyres, IndusInd Bank, and Frost & Sullivan had garnered a total of 2,02,334 responses over the survey period. The following are the findings from the IACC survey 2021.
Strong interest in electric vehicles
The survey findings show a sharp rise in interest for the electric vehicles (EVs), wherein 35 per cent of the respondents are willing to go for an EV as their next vehicle. The rise in demand is attributed to the following reasons - better product options (55 per cent), attractive technologies (39 per cent), and affordability (31 per cent). However, the lack of adequate infrastructure has been dissuading the potential buyers. About 50 per cent of the respondents cited lack of charging stations and number of product options as the main reasons for not buying an EV.
Growing demand for used cars
Under the current uncertain market condition, the change in the mindset of Indian car buyers is quite evident with perception changes from ownership to usership. About 18 per cent of the respondents have shown interest in buying pre-owned cars or opting for leasing/subscription models. While purchasing new vehicles was still a dominant feature at 83 per cent; the rising interest in alternate buying options shows a propensity to place usage and functionality above owning a new model.
The pandemic has changed the world and online platforms have emerged as the preferred marketplace. Our survey findings reveal that 60 per cent of the prospective buyers have shown a willingness to buy the vehicle digitally. Some of the main reasons are – better deals (48 per cent), convenience (45 per cent), and trust in vehicle manufacturers (27 per cent). Moreover, 26 per cent will opt for an online platform due to the transparent purchase process, and 13 per cent due to hygiene at dealerships.
On the other hand, 65 per cent of the respondents will not opt for an online platform due to lack of touch and feel of the vehicle, while 29 per cent of users believe that better deals are offered at the dealership.
Poor consumer sentiments and uncertain market conditions have influenced the buyer decision, wherein 77 per cent of the respondents have decided to postpone their decision to buy a vehicle in the 2020. Starting 2021, with the introduction of the COVID-19 vaccine, improvement in buyer sentiments, and the need for personal mobility, about 54 per cent of the potential buyers were keen to buy a vehicle in 2021, while 34 per cent of the respondents have decided to not purchase a vehicle this year. Interestingly, only nine per cent of the respondents are willing to travel by a public transport.
The respondents have traditional preferences, wherein 56 per cent buyers will opt for nationalised banks, followed by 19 per cent opting for private financial institutions. The study further reveals that 17 per cent of the buyers will prefer personal savings and liquidity, while eight per cent will exchange with existing vehicles. Given the current volatile market condition, buyers are taking the risk-calculative approach to vehicle financing.
In terms of body types, 21 per cent of the respondents have opted for the compact SUVs, while there was 19 per cent demand for the bikes. About 17 per cent of the respondents have voted for the hatchbacks while 12 per cent have opted for scooters.
Commenting on the survey insights, Banwari Lal Sharma, CEO of CarWale and BikeWale said, “The survey indicates a positive sentiment and reiterates the findings of CarWale’s first survey in April last year, where we predicted that the last quarter of the last financial year will be the demand-driving period. While the impact on the supply chain and OEMs was unexpectedly severe, fortunately, we are now seeing a changing pattern. We have demand on our side and the rest can be taken care of. One of the most heartening aspects of the survey is the revelation of 60 per cent of the respondents willing to go for online purchases. Today Indians are predominantly online savvy, utilising the internet for more than email or web browsing. So, it’s not surprising when 60 per cent of them show a willingness to buy online. For most first-time car or bike buyers, the process can be quite cumbersome. Hence, companies across the board are putting the effort into making the process digital and hence, more convenient.”
On the necessity of bringing innovation, he further added, “India is one of the toughest markets where it’s difficult to make money. We need improvisations in every aspect in order to adapt the product to the market. We cannot simply transplant international models in the Indian market and expect Indians to buy them. Hence, there is a high need for innovation on all fronts, whether it is online, offline, or at the level of OEMs, dealers, accessories, and component manufacturers, everyone must do a much better job and continue to innovate.”
A special round of thanks for the key members that have joined us on the panel - Shashank Srivastava, Executive Director (Marketing & Sales), Maruti Suzuki India; Ramashankar Pandey, Managing Director, Hella India Lighting and Chairman, Aftermarket Committee, ACMA; Vinkesh Gulati, President, Federation of Indian Automobile Dealers (FADA); Arnab Banerjee, Chief Operating Officer, CEAT Tyres; T A Rajagopallan, Executive Vice President, Consumer Finance Division, IndusInd Bank; Kaushik Madhavan, Vice President, Mobility, Frost & Sullivan South Asia; Banwari Lal Sharma, CEO, CarWale; and Deepangshu Dev Sarmah, Editor, Mobility Outlook, CarWale.