77% customers in India postponed decision to buy vehicle due to COVID-19: Survey

A majority of respondents opted for nationalised banks as the preferred financing option for purchasing a vehicle, the survey by CarWale revealed.
Cars parked in showroom
Cars parked in showroom
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Against the backdrop of the COVID-19 pandemic, online platforms have emerged as a preferred marketplace to buy vehicles digitally, according to a survey by auto research platform CarWale. The survey found that 60% of its respondents showed a willingness to buy their vehicle online,  with good deals and convenience being the key drivers. The reasons for the popularity of online mediums were better deals (48%), convenience (45%), trust in vehicle manufacturers (27%), followed by transparent purchase process (26%), and fear of hygiene at dealerships (13%), the survey said. On the other hand, the inability to touch and feel the vehicle was cited as the top reason for not opting for an online purchase (65%), followed by better deals offered at dealerships (29%).

“Of the 26 touchpoints from the time a customer intends to purchase a vehicle to actually buying it, 21 of these were digitised before the pandemic. Test drives and showroom visits have become digitised through immersive tech. We are now looking at a ‘phygital’ (physical + digital) way of purchasing,” said Shashank Srivastava, Executive Director (Marketing & Sales), Maruti Suzuki India.

With the objective of understanding vehicle purchase behaviour and changing perceptions in the wake of COVID-19 in India, the Indian Automotive Consumer Canvass (IACC), which garnered a total of 2.02 lakh responses, was released on Wednesday through a virtual panel discussion led by stalwarts of the industry. 

COVID-19 has played a role in influencing buying decisions as an overwhelming 77% of the respondents reported postponing their decision to buy a vehicle due to the outbreak in 2020. But the pandemic notwithstanding, more than half the people surveyed (54%) were keen to buy a vehicle in 2021 as against one-third (34%) of the respondents who decided not to make any such purchases this year. The interest in buying vehicles during the pandemic can be explained by the necessity of personal mobility.

There was an upswing in interest in Electric Vehicles (EV) with a willingness to explore new models in ownership as well as interest in online purchases, the survey said. Interest in EVs showed a sharp rise with 35% of the respondents reporting a willingness to go for an EV as their next vehicle. The rising demand is driven by better product options (55%), attractive technologies (39%), and affordability (31%). However, the lack of infrastructure seems to be the major stumbling block in its wider appeal. Around 50% of the respondents cited lack of charging stations and number of product options as the main reasons for not buying an EV.

The survey revealed the changing mindset of the Indian vehicle buyer as their perception changes from ownership to usership. An estimated 18% of the respondents showed interest in buying pre-owned cars or opting for leasing/subscription models. While purchasing new vehicles was still a dominant feature at 83%, the rising interest in alternate buying options shows an inclination to place usage and functionality above owning a new model, the survey added. 

Explaining the need to bring higher transparency in the pre-owned car segment, Banwari Lal Sharma, CEO of CarWale and BikeWale said, “Trust deficit is one of the biggest threats to the growth of used cars in the country. Everyone from the government to the dealers and companies like CarWale will have to work at it. We are working on contributing vis-à-vis more upfront information.”

A majority of respondents still opted for traditional preferences, when it came to financing options. Nationalised banks (56%) are the most preferred mode of financing new vehicles, followed by private financial institutions (19%), personal savings and liquidity (17%), and exchange with existing vehicles (8%).

In terms of body types most preferred by the surveyed consumers, compact SUVs (21%) witnessed a higher demand as compared to bikes (19%). Hatchbacks were favoured by 17% of the respondents, while 12% of those surveyed opted for scooters.

On the necessity of bringing innovation, Banwari Lal added, “India is one of the toughest markets where it’s difficult to make money. We need improvisations in every aspect in order to adapt the product to the market. We cannot simply transplant international models in the Indian market and expect Indians to buy them. Hence, there is a high need for innovation on all fronts, whether it is online, offline, or at the level of OEMs, dealers, accessories, and component manufacturers, everyone must do a much better job and continue to innovate.”

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