Half of India's car buyers research over 10 hours before purchase decision

Deloitte in India has released a report titled ‘Driving through the consumer’s mind: Steps in the buying process’, which sheds light on the process Indian car buyers go through when buying a vehicle. It elaborates on the information buyers look for, before making a purchase the time they spend researching, their choice of information sources, interactions with dealers and their openness to recommend products to others.

According to the report, social media and dealerships are the least important information sources for potential car buyers; word-of-mouth and car reviews are bigger influencers in the purchase process. Price / value and features of a vehicle are key research parameters in the purchase process. While test drives remain a highly important aspect of the customers’ research, a majority of them do not prefer spending more than 45 minutes at the dealership, including the time on test drives.

The report also reveals that people recommend cars to potential customers regardless of whether they own it themselves or not; implying that manufacturers need to continuously engage with customers beyond sale of vehicles to create a positive buyer-seller relationship.

According to Kumar Kandaswami, senior director, Deloitte Touche Tohmatsu India, “In this report, we have tried to draw insights on factors that manufacturers need to consider in order to reach out to the potential customers in the most efficient way, at the most appropriate time with the most relevant information. The report delves deep into consumer behaviour patterns and analyses their information consumption patterns when it comes to buying a vehicle and influencers that create purchase triggers for these car buyers.”

Among the purchase triggers for first-time car buyers, family needs is rated as the top trigger in purchase decision and is eight times more important as a trigger than better brand image. However, in case of repeat buyers, technology and need for more space are rated as the top triggers and are three times more important as a trigger than better brand image.

Having made a purchase decision, this report covers the nature of information the buyer seeks to collect to come to a decision on the final purchase. While social media strategy is high up in the priority list for manufacturers, customers seem to attach the least importance to what they get out of the social networking sites. Fifty percent of car buyers, across age, gender and location, spend more than 10 hours researching about possible vehicles they can buy. Of note is that male buyers tend to spend more time compared to female buyers. And, more than 50 percent of people considering three or lesser brands for purchase do not research for even a single car brand. This would seem to suggest that these groups of buyers are reasonably clear about what they are considering and also have information on those brand options.

On the dealership-customer engagement front, while buyers don’t reach out to the manufacturers or dealers for information through their websites, they tend to visit dealerships to validate their findings from the research. Deloitte India’s research says over 70 percent of buyers visiting dealerships take a test drive, indicating that test drive is a key activity in the dealerships to facilitate the decision making. More than 50 percent customers desire to spend less than 45 minutes for a dealership visit and test drive. It indicates that bulk of the information gathering is done outside the dealerships

Another finding is that customers seem to recommend products as they go through or complete their buying process. They seem to recommend products that they did not buy for themselves too. This highlights the importance of lost customers – both from their enthusiasm to endorse products and given the importance of word-of-mouth in the buying process. More than 50 percent of respondents who consider four or more brands recommend at least one brand; and more than 40 percent of respondents considering three brands recommend at least one brand to others which is different from the brand that they own

The research findings of this report are based on a survey conducted by Deloitte from 1,813 respondents in India, of which 1,066 respondents comprising 59 percent of the survey population belong to Gen Y (19-36 years), while 22 percent belong to Gen X (37-48 years) and 16 percent belong to the Baby Boomers (49-67 years) segment. The four-wheeler owners also show a similar age profile.

In the overall population, almost 79 percent had purchased new vehicle during their last purchase. In the sample related to car owners, 91 percent had purchased a new car during their last purchase.