Deloitte’s 2023 Global Automotive Consumer Study (GACS) indicates that in India, despite the fears of inflation, consumers are opting to pay a premium for purchasing their next vehicle.
About 57% intenders were willing to purchase electric vehicles (EVs) in the range of INR 10-25 lakh, while 20% were keen on EVs in the range of INR 10 lakh and below, the study found. Vehicle intenders in the price bracket of INR 10-25 lakh were around 47%, while in the INR 10 lakh and below category, intenders were 28%.
Rajeev Singh, Partner and Automotive Sector leader, Deloitte Touche Tohmatsu India said there is a clear shift in the Indian consumers’ buying pattern, where an average consumer is prioritising experience over cost.
Traditionally, the Indian consumer has been cost-conscious, and cost vs mileage has been the most important parameter for vehicle purchases. Key factors driving consumers’ decision while moving from one brand to another include product quality (62%), vehicle features (48%), and brand image (46%).
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, Singh said.
Low Fuel Cost Top Reason For Adopting EVs
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.
Half of the surveyed consumers (49%) prefer to pay for 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, said Deloitte.
About 82% of consumers were interested in purchasing insurance directly from the manufacturer citing ‘convenience’ and ‘cost saving’ over the ‘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.
Singh said, “Our consumer study indicates the rising demand and expectation of the Indian consumer, who is not just cost-conscious anymore but is considering more than one pragmatic way of mobility experience. This allows them to balance operating costs, and experience through technology (37) whilst making sustainable choices.
As India sets newer trends, the need of the hour will be for OEMs and ecosystem stakeholders to work in cohesion, he said, and “bring innovative business models that bridge the gap of infrastructural challenges with the power of digital technology.”
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