First-time car buying in India has improved by a huge margin from what it was back in 2012. A survey conducted by J.D. Power Asia Pacific 2014 India Escaped Shopper StudySM (ESS) shows that first-time new-vehicle buyers in India are considering more vehicles during the shopping process. They no longer find themselves limited to the two or three cars they began their research with.
This would not be a surprising find as the development of technology, advance of digital media and more factors have helped facilitate this result. The 2014 ESS is based on the responses from 8,499 buyers and 3,448 rejecters of new cars and new utility vehicles who purchased their vehicle between September 2013 and April 2014. The study, which examines the reasons why new-vehicle shoppers consider but ultimately reject certain models in favor of another, was fielded from March through July 2014.
The study found that 27 per cent of first-time new-vehicle buyers in India seriously considered a model other than the one they purchased while shopping in 2014, up from 20 per cent in 2012. One of the key aspects driving the increase in cross-shopping is the proportion of first-time new-vehicle buyers who finance their purchase through a car loan. Nearly three-fourths (73 per cent) of first-time buyers finance their vehicle in 2014, up from 64 per cent in 2012. Furthermore, 35 per cent first-time vehicle buyers have a monthly household income of Rs 50,000 or more in 2014, up from 18 per cent in 2012, which enhances their credit worthiness and enables them to qualify for a higher loan amount.
As it is commonly known, any first-time car buyer would want his/her purchase to be a profitable one and therefore will look for the best of all features available in their car in their budget. It was revealed in one of the findings by the study that new-vehicle shoppers are increasingly placing greater importance on a vehicle’s interior in their selection process and as a result research has also increased. Among shoppers, 15 per cent indicate the vehicle interior is the primary reason they rejected a vehicle in 2014, an increase from four per cent in 2012. Thirty-five per cent indicate they researched the vehicle they purchased before visiting the dealership in 2014, up from 26 per cent in 2012.
Issues such as interior styling, driver’s seat and rear-seat comfort are among the top interior-related reasons cited for rejecting a vehicle. This factor has been taken seriously by car manufacturers as well before launching a new product in the market. Increasingly, foreign car companies are conducting and requesting feedback from customers so that improvements can be made to their products to make it appealing for the Indian customer needs. Apart from the ‘kitna deti hai’ question, car buyers have now graduated to demanding premium quality interior, rear AC vents, airbags and more even if they were looking at a base model of a car.
Also the new-age customer is not one that can be duped into buying any car easily. He/she now has a plethora of mediums available for research on their purchase. While earlier it was limited to word of mouth or what friends and the dealer told them, now there are various websites, magazines and other online forums which cater to a curious buyer’s queries.
Coming to customer service, this also plays a major role in deciding a purchase. Ford, Honda and Hyundai have improved their customer retention rates the most year over year. Maruti Suzuki is the most considered nameplate among new-vehicle shoppers for the 10th consecutive year, with 41 percent of all shoppers eventually purchasing one of its models. New-vehicle buyers who purchase Volkswagen, Ford and Renault models shop the most before purchasing their vehicle, while buyers of Mahindra, Maruti Suzuki, Tata and Toyota models shop the least often before purchasing.
We, at CarWale have also collated a list to help first-time car buyers in their quest for their grand purchase. Since this is the festive season, we give you a guide to help understand and conduct this purchase in a more informed manner. Do check out our Car Buying Guide for the Festive Season.