Indian car buyers becoming more digital savvy

Mumbai, August 22, 2013: If the findings of the annual Capgemini global automotive study ‘Cars Online 12/13’ are anything to go by, then passenger car OEMs in India have something to thank their dealers for. They, however, also need to draw up new strategies to be more competitive in the increasingly digital world. The findings of the survey reveal that the influence of dealers over buyers’ purchase decisions has increased over the last couple of years. In 2012, this has risen to 52 percent, compared to 33 percent in 2010. According to the study, dealers are now influencing purchase decisions as much as family and friends of customers.

The study also shows that the willingness of Indian customers to shop for vehicles online, if given that choice, has been increasing (52 percent). The average of customers shopping vehicles online in developing markets, excluding India, stands at 46 percent. When it comes to purchasing parts and accessories online, 59 percent of the respondents (25 percent in 2011) say they are likely to purchase vehicle parts online, as they expect to get discounts on them.

In another parameter, the study finds that most of the customers make their first visit to a dealer only two months prior to buying a car. “The window for dealers to convert a lead to an actual transaction has shrunk compared to what it was a few years earlier,” says Vikas Kumar, automotive lead consulting, Capgemini India.

The global survey was conducted among 8,000 consumers comprising of two categories -- developing markets like India, China, Brazil and Russia and mature markets including France, Germany, UK and US. “It studies online behaviour of passenger car buyers,” says Anish Sarkar, senior VP and head of consulting, Capgemini India. Indian consumers, who accounted for nearly 25 percent of overall developing market respondents, highlighted the following:

Web usage focuses on supporting the purchase decision: Demand for user-generated content has been growing significantly. Primarily visiting OEM and dealer websites, customers opt for core buying functionalities. 72 percent of Indian customers expect high quality and fast responses to their requests from dealers and manufacturers or they will look elsewhere.

Dealers play a crucial part in a seamless digital purchase experience: Dealers increase influence on purchase decision significantly (33 percent in 2010, up to 52 percent in 2012) and are now as important as opinions of family and friends. 70 percent make first dealer visit two months before purchase. Customers expect new ‘digital’ features in the dealer showroom (eg, interactive touchscreens, 51 percent).

Demand for alternative mobility solutions is significantly higher in India: (70 percent) than in other developing markets (57 percent), flexibility (28 percent) and availability (21 percent) are the main drivers for adoption of alternative mobility solutions.

High importance of service contracts for customer loyalty: Brand and dealer loyalty are on a high level in India and have increased moderately. Indian customers prefer manufacturer websites for online purchases. Contract design influences the purchasing decision of customers (India: 87 percent) and is a critical success factor for customer loyalty.

Adjustment of post-sale communication to customer demand: Traditional post-sale communication does not support sales. Communication needs to be targeted. Smartphone apps offer opportunity for personalised communication.

Still strong, but decreasing enthusiasm for e-vehicles: 60 percent of customers (compared to 66 percent last year) expect full e-vehicles to become a viable option within two years. Customers clearly prefer other alternatives, such as alternative fuel (24 percent) or hybrid vehicles (17 percent).

Market potential for Connected Car services: Customers seek enhanced safety and an improved driving experience. They also show a high willingness to share data.

SUMANTRA BAROOAH