Capgemini, the global consulting, technology and outsourcing services firm, has found some interesting insights about Indian consumers in its annual survey of key automotive markets.
If the findings of Capgemini's annual Cars Online survey are any indication of the marketplace, then carmakers, more so a market leader like Maruti Suzuki India, cannot afford to rest on their laurels. Brand loyalty among car owners is on a decline, as the propensity to change is on the rise. In the study conducted across eight countries (US, Brazil, India, China, UK, Italy, France and Germany) involving over 8,000 respondents, 50 percent would change brand anyway, while 30 percent owners would change if they have bad service experiences. In India, the loyalty factor was found to be lesser than the global average. Ten percent of overseas respondents said they would be loyal to a particular brand while in India the number was five. "In 2017, there were a lot of people who said they would be wanting to change brands just for the sake of changing almost. So there was again a feeling of, I suppose, experimentation," Nick Gill, chairman – Automotive Practice, Capgemini, told Autocar Professional. Sixty-four percent of Indian respondents said they would shift as they just want to change. In matured markets, 49 percent of respondents cited the same reason to shift to another car brand. One of the reasons, Gill says, is younger consumers don’t have the same brand affinity that the older generation seem to have.
The competition in the near future may not be limited to conventional car brands. Majority of respondents said they are likely to switch from their current brand to a car by a technology company. Interestingly, 83 percent of the Indian respondents answered in the positive when asked if they would switch, given a choice, to a car produced by a technology company (Apple, Google, for example). In the overall respondents group, 57 percent answered in the affirmative.
C(ONNECTED) A(UTONOMOUS) S(HARED) E(LECTRIC)
Gill says that in the survey Chinese and Indian respondents came across as the most extreme, in terms of their responses. Indian car buyers are also becoming increasingly tech-savvy. "What you see in India, especially with younger people in the age group of 18-35 years, is a desire to do things differently. So if you ask about mobility services, car sharing, ride sharing, all of them globally are a major trend. In India it's even more of a trend. If you ask about connectivity everybody wants it, but in India they want it more," says Gill.
Even as it may seem surprising, connected services was not found to be a compelling factor in choosing a car. That explains why most respondents wanted to have the features but not pay for them. They, however, are ready to pay more for cars with autonomous driving features. Capgemini says that autonomous driving is seen as a compelling issue. Increased safety, less stress and faster mobility are the top three reasons cited by the respondents. Seventy-two percent of Indian respondents cited safety as a reason why they would pay more for autonomous driving features.
Consumers interviewed during the Cars Online story told that they are interested in electric vehicles, but are not passionate. Forty-three percent of respondents in India said that they would buy an electric car if the recharging time is as quick as refueling their cars with diesel/petrol and if the price of an electric car becomes comparable to cars with an internal combustion engine. The third reason cited was that current driving range of EVs should be significantly increased.
Capgemini found that most consumers consider mobility services complementary to owning a car. So, it says, participating in the mobility market is a way for an OEM or dealer to introduce drivers to new makes and models. Some consumers will use a mobility service to ‘test drive’ a car before making a purchase, while others want to experiment with ‘something new’. Either way, 66 percent of the surveyed respondents say that the brand is an important factor in the mobility decision.
According to the study report, more than a third of car buyers (34 percent) now see ride sharing and tap and ride services as a genuine alternative to car ownership. While sales of new cars are continuing to grow significantly, the new data from Capgemini echoes a shift in the strategy of some OEMs who are already investing in car sharing services through launches, acquisitions or partnerships, to adjust to the shifting attitudes of consumers. More than half of the respondents see car hailing and ride-sharing services such as Uber, Didi and BlaBlaCar as complementary to buying a new car (56 percent).
The Capgemini report showed that the percentage of those who see mobility services as complementary to buying a car increases when looking at younger car buyers aged 18-34 (64 percent) and those based in emerging markets China (77 percent) and India (63 percent).
The significance of the investments by major manufacturers in car sharing schemes is confirmed by the fact that two-thirds of consumers (66 percent) state that car brands are an important factor in their choice of car-sharing program, indicating that these schemes could become an important part of the new car sales cycle.
Kai Grambow, Global Head of Automotive at Capgemini, says, “We are currently experiencing a golden age of car sales. However, it’s clear that this won’t last forever in its current form. Car brands are realising they need to react to changing consumer habits to sustain growth. Becoming leaders in car sharing and the broader mobility space will not just create new revenue streams for car manufacturers, but will also allow brands to raise awareness and establish a new kind of relationship with consumers as they decide on their next model to purchase.”
CYBER SECURITY AS AN INFLUENCER
With the overall environment getting increasingly digital, consumers are also giving more importance on cyber security. As cars become more laden with technology – either because they are connected or autonomous – they become more vulnerable to hacking in one form or another.
Given the anxiety surrounding data theft in every aspect of modern life, it is only natural that car owners would be concerned about the cyber security of their vehicles. A significant majority of the survey respondents say that a vehicle’s cyber security would influence their purchasing decision. While they are willing to share the data generated by the cyber-secure cars, consumers would like more transparency, as well as more control over which data are collected, transmitted, and used. Very few consumers are not concerned about cyber security.
Sixty-eight percent of the survey respondents said that a vehicle’s cyber security would influence their purchasing decision. In India, 40 percent of respondents said that cyber resilience would be a key factor influencing the decision to buy a car.
The Capgemini study also found that dealers' influence on buying decision is weakening. Dealerships are losing their importance as sources of information. The independent press is the most favored resource, with 50 percent of the consumers using it for their research. The impact of social media is also significant. It is more in India than the other markets, according to Gill. Social media has a strong influence on the purchase decision of Indian consumers. Sixty-one percent Indians refer to a dealer or manufacturer social media site when researching car purchase online. According to the study report, the appetite for online sales continues to grow. Over 32 percent Indians are very likely to purchase their next car over the internet.
Gill also has a message for OEMs who would like to "experiment and push things". "You are better to be experimenting in India than specially in doing it in some western countries, where there is a lot more history and reluctance. The Indian customer seems to be very open to change."
(This article was first published in the September 1, 2017 print edition of Autocar Professional)