Indian consumers are willing to pay a premium for their next car purchase despite inflation fears, with a large chunk of them looking for cars in the Rs 10-25 lakh price category, according to a Deloitte study. They are now prioritizing experience over cost, Deloitte Global Automotive 2023 said, signaling a clear shift in buying pattern with most willing to accept a longer lead time of 4-12 weeks for better experience and selection of preferred vehicles. Consumer Study (GACS).
The study conducted from September 21 to 29, 2022, with a sample of 1003 consumers in India, found that “vehicle intenders in the Rs 10-25 lakh were around 47 percent.”
"For Rs 10 lakh and below, these were 28 percent. About 57 percent of investors were willing to buy Rs 10-25 lakh electric vehicles (EVs) and 20 percent were in the Rs 10 lakh range and below," it said.
The report says there has been a clear shift in the Indian consumer buying pattern, with the average consumer prioritizing experience over cost, adding: "Traditionally, the Indian consumer has been cost conscious and cost versus mileage was the most important factor in purchasing a vehicle."
Rajeev Singh, Partner at Deloitte Touche Tohmatsu India LLP and leader in the automotive sector, said: "Our consumer research indicates growing demand and expectations from the Indian consumer, who is no longer just cost conscious but thinking about a way to more practice of experiencing mobility".
He added that this allows them to balance operating costs with experience through technology (37 percent) while making sustainable decisions.
When it comes to switching from one brand to another, the study found that the average consumer identified key factors such as product quality (62 percent), vehicle features (48 percent) and brand image (46 percent).
"For a better experience and preferred vehicle selection, around 55 percent of consumers were willing to accept a longer delivery time (up to 4-12 weeks). This opens the door for a more 'built-to-build' retail model. order'". Deloitte said.
He added that in terms of electric car adoption, the top three reasons to buy an electric car include lower fuel costs, a better driving experience and less maintenance.
"However, the availability of charging infrastructure, concerns about battery safety, and the price premium required to access electric vehicle technology are remaining challenges," the study said.
He added that consumers of all age groups prefer to pay public electric vehicle fees through payment apps on their smartphones, indicating a need for easy-to-use digital payment tools.
The study found that 49 percent of Indian consumers would prefer to pay upfront for connected car features and technology as part of the purchase price, which "presents a challenge for OEMs looking to generate new revenue streams through monthly digital subscription services.