New Delhi: In India, despite fears of inflation, consumers are opting to pay a premium for their next vehicle. Vehicle buyers in the INR 10 lakh–25 lakh price range accounted for approximately 47%. For INR 10 lakh and below, these were 28%. About 57% of intenders were willing to purchase electric vehicles (EVs) between INR 10 lakh and 25 lakh, and 20% in the range of INR 10 lakh and below, according to Deloitte’s 2023 Global Automotive Consumer Study (GACS).
There is a clear shift in an Indian consumer’s buying pattern, where the average consumer is prioritizing experience over cost. Traditionally, the Indian consumer has been cost conscious, and cost vs. mileage has been the most important parameter for vehicle purchase. The average consumer considers key factors, such as product quality (62%), vehicle features (48%), and brand image (46%, when switching from one brand to another.
For a better experience and preferred choice of vehicle, around 55% of 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 favorable 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.
Rajeev Singh, partner and automotive sector leader at 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 any more but is considering more than one pragmatic way of having mobility. This allows them to balance operating costs, and experience through technology (37 percent) while 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.”
The other key emerging trends
1.Half of the surveyed consumers (49%) 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.
2.OEMs are looking to offer in-house insurance products, signaling a significant disruption for the traditional value chain. About 82 percent of consumers were interested in purchasing insurance directly from the manufacturer, citing “convenience” and “cost savings” over their current provider. Consumers have shown their trust in their servicing dealer (36%) and the manufacturer (32%), signalling the importance of these stakeholders in the customer relationship.
3.Safety is a key priority for India. Consumers are willing to share data and/or vehicle or operational data with the manufacturer or a third party to receive the necessary updates for a safer and better driving experience. About 85% of consumers preferred getting updates on safer routes, and 84% preferred getting maintenance updates and vehicle health reporting or alerts along with updates to improve road safety and prevent potential collisions.
4.New vehicle vs. used car trend Per the study, 37% of consumers want access to cars with the latest technology or features; 22% purchase them due to reliability; and 20% choose a car due to the manufacturer’s warranty. While opting for a used car, 33 percent of consumers preferred it due to cheaper car insurance, and 31 percent preferred it due to more value for money.
5.Across all age groups, consumers prefer to pay for public EV charging via payment apps on their smartphones, signalling the need for an easy-to-use digital payment tool.
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The specialty of this fourth EV is that it is an SUV which has been modified into a ‘Follow-Me’ or ‘Apron Control’ vehicle for exclusive use on the airside, giving it the distinction of being among the few airports in India to induct an EV for this express purpose. Airports provide Follow-Me vehicles for convenience, safety or combination of both and act as visual aid to guide aircraft from place to place.