Mileage to features, the evolving needs and dreams of the Indian car buyer


The preference of Indian car buyers in selecting new vehicles are being influenced by various interesting elements over the last one decade, which inc

The preference of Indian car buyers in selecting new vehicles are being influenced by various interesting elements over the last one decade, which include safety and digitalisation. (Representational image)

Remember the time when cars used to be seen as a rich man’s product? Gone are the days. With the increased expenditure capability, easier and wider availability of financing and rapidly growing consumer aspirations, personal cars have become more than just a tool for commuting from one point to another. Instead, they have become a lifestyle necessary product.

In the last decade, the Indian auto industry has witnessed a multidimensional and profound transformation with various automakers continuously introducing products that are either premium or aspire to be premium and come with the same or near same quality as their global counterparts. Consumer behaviour in the Indian market has been undergoing a significant shift when it comes to making car-purchasing decisions. As the Indian economy is growing, consumer aspirations and capability of expenditure are growing. Eventually, the evolving consumer preferences are shaping the market.

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Fuel efficiency no more a key deciding factor

Good fuel efficiency has always been considered as one of the key elements when it comes to deciding a passenger vehicle’s comprehensive value for money factor taking the cost of ownership into account. This is one of the reasons why Indian consumers have traditionally leaned towards small cars over bigger vehicles that gobble up more fuel. However, fuel efficiency is no longer a key deciding factor for Indian consumers and that too in an era when petrol sells at an average cost of above 100 a litre across the country and the average cost of diesel is above 90 a litre.

Safety matters

Cars in India are not any more just tin cans anymore. The modern passenger vehicles in India come well equipped with a plethora of active and passive safety features aided by advanced technology. The build quality of modern cars in India has improved drastically. In a nutshell, the modern cars in India come with similar safety features and build quality as their global counterparts sold in other developed markets like Europe and the US.

McKinsey’s Automotive Consumer Survey highlights that approximately 78 per cent of Indian car buyers now prioritize safety features, which is a significant shift of consumer preference even a decade ago when safety was not considered a pivotal factor in the purchase decision-making process. The government’s continuous push for safer mobility and increased awareness about road safety among consumers has made way for cars in India to come equipped with key safety features like multiple airbags, ABS, EBD, and ESC as standard in a majority of the mass-market cars. In a nutshell, safety features are gaining significant attention and influencing consumers’ purchase decisions like never before.

From retail to ownership: Digitalisation playing a crucial role

In the era of digitalisation, the auto industry too is witnessing an ever-increasing penetration of digital technology, be it in the retail segment or consumers’ ownership. According to a McKinsey study, approximately 70 per cent of Indian consumers consider connectivity features like smartphone integration, Bluetooth connectivity, and in-car WiFi essential features when selecting a car. Modern Indian car buyers seek seamless connectivity and advanced infotainment systems in their vehicles, which is in sync with the global consumer behaviour trend.

Buoyed by this evolving consumer demand, automakers are emphasising on offering advanced infotainment systems, voice recognition technology and personalized user interfaces in their respective vehicles in an attempt to make them distinctive from others. This shift in consumer preference is completely different from what it was a decade ago when car buyers used to focus on the hardware of the vehicles, not on the software-driven features.

What’s driving this evolution?

No wonder, the consumer preference in the Indian passenger vehicle market has witnessed a tectonic shift from what it was a decade ago. Speaking about this shift of consumer preference, Puneet Gupta, Director of S&P Global Mobility told HT Auto that modern Indian car buyers are progressing beyond mere considerations of fuel efficiency and price, seeking aspirational experiences and embracing the latest technological features when purchasing cars. “With the average car price now nearly three times what it was a decade ago, manufacturers are compelled to integrate more advanced features to meet evolving consumer demands,” he further added.

Avik Chattopadhyay, former Head of Marketing, Product Planning and PR at Volkswagen India, thinks otherwise. He believes that it is a fallacy that economy car buyers have moved upmarket. “The target segment for economy cars either cannot afford to buy a new car or buys a used car as a more economical option. The ones buying upmarket cars are just about two million odd individuals who anyway make up the upper middle class of India,” Chattopadhyay said, further adding that out of the over 40 lakh new cars sold in India last year, one should find out the split between individual and institutional sales – the latter is slowly going up. However, he admitted that the consumers going upmarket, are looking at safety and ownership costs as the two most important factors.

First Published Date: 16 May 2024, 07:07 AM IST


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