COVID-19 has not just disrupted the way the world was working before 2019, but it has done impactful and permanent changes to consumer behaviour, giving birth to new auto retail model, apart from speeding up the digitisation efforts of the automakers, said top experts at The Future Retailer, organised by Mobility Outlook on 23rd and 24th September 2021.
In the two-day event, industry experts from across passenger vehicles, two-wheelers, commercial vehicles, after-sales, dealers and luxury vehicle manufacturers participated and deliberated on the most pressing topic of the present time as the significant shift is happening across the functions of automotive retail.
On Day 1, experts emphasised the importance of physical dealerships while the auto manufacturers and dealers moved towards the digital ecosystem. Moreover, the special focus was on creating a seamless experience for customers between the physical and digital world to create efficiencies and productivity.
While the Day-1 dealt with the mass car market, two-wheelers and commercial vehicles, the Day-2 of The Future Retailer brought some of the most critical topics of new business models, after-sales & service, used car market and why the luxury car market has not been able to reach its full potential despite India being among top countries where HNIs reside.
In the first panel discussion, ‘Realigning strategies to meet future retail challenges in the automotive value chain,’ Kaushik Madhvan, Vice-President - Mobility, Frost and Sullivan said, be it digital or physical ease and convenience for customers to avail services from auto retail shops should be of prime importance. Moreover, dealer partners should look for new value-added services to get repeat customers.
However, with the changing technology and emergence of electronics in vehicles, major upskilling and reskilling is required in auto retail, said Arindam Lahiri, CEO, Automotive Skills Development Council (ASDC).
He further pointed out that with changing technology, customer’s instant gratification needs are changing more rapidly. Internet consumers are impatient, and brands need to be proactive. These fundamental shifts in behaviour in customers should be addressed by brands and prioritise their responses.
Mihir Mohan, CEO, PitStop, said pedigree of mechanics is vital in the current scenario. In addition, empowering mechanics is essential in changing the scenario from mechanical-oriented to electronics-oriented work. Mechanics' career growth path needs to be defined to attract people to this profession, he said. The key challenge is the availability of parts on time as today's tech-savvy and social media-oriented customers do not want to wait as they used to be in the olden days.
Afdhel Wahaab, Founder, Indus Go, said it is challenging for the new-age mechanics due to disruption in the service centres. However, organisations like ASDC can play a huge role in addressing these issues, he added.
Speaking at the panel discussion on 'Unravelling the luxury vehicle market potential,' Santosh Iyer, VP (Sales & Marketing), Mercedes-Benz India, said business professionals nowadays travel intracity by road than taking flights. Hence the need for personal mobility has increased more than ever. 'At present, we are in a situation where demand is more than supply. If we compare quarter-on-quarter, we are doing the same number of pre-COVID times. So there are customers who are now ready to wait till February of next year to get their cars,' he said.
He added, “About 20% of customers are transacting online on our platform. This is the right time to challenge old business models of billing dealer partners and loading them with the inventory. We have come up with a direct to customer model, but dealers have to play a very important role. However, it will crease out issues such as undercutting price, inventory cost and better availability of products for customers.”
Another interesting trend pointed out by Amit Garg, Director, Shiva Group, is that customers today have moved to higher ticket sizes. The customers have moved from INR 60 lakh - 70 lakh cars to over INR1 crore. Therefore, though the sales numbers remain the same, the profitability has increased, he said.
Utkarsh Singhania, Director, Titania Autobike, said that diverting the marketing budget from the conventional to digital helped reach larger geography and a more extensive customer base.
Despite luxury vehicles selling like hot cakes in these times, it hasn’t reached its full potential yet, due to fundamental issues such as high taxation, said panellists. However, spotting the silver lining experts said, the speed at which infrastructure is building up is fueling the growth of the luxury automobile market, and standard electric vehicle policies are also aiding this.
Moderating the session, Avik Chattopadhyay, Co-Founder, Expereal, said the experience to the customers of today should be omnichannel. There is a heightened use of digital not only to enhance reach but also to support and create awareness. Owning luxury cars was the destination earlier, but it is part of the journey, he added.
In the last panel on 'Addressing the rapid growth of the Indian pre-owned vehicle market,' Amar Sheth, Managing Director, Shaman Group and Mihir Nanavati, Director, Nanavati group discussed the importance of physical dealerships as customers are aware of the need for rigorous check and testing in the used cars, unlike the new ones.
Arindam Lahiri, delivering the valedictory address on behalf of Nikunj Sanghi, Chairman, Automotive Skills Development Council, said training dealerships' staff is essential, and the leaders have to invest in equipment and tools to match the modern-day needs. ASDC is working on a new training module combining digital and physical elements, he concluded.