Car-buying sentiments remain strong among Indians

2020 might be a year that history students will be loathe to turn back to, but it’s not all gloom and doom. One of the unintended consequences of the pandemic has been that personal mobility, and the nature of it, has come sharply under the scanner. People now view public transport means with a wary eye, and this is expected to give a fillip to car sales due to concerns over hygiene and distancing. Just as entire industries have been upended by the pandemic, so too have our behaviours.

However, Indian consumers might still provide cause for cheer to automakers. As per a survey conducted by Capgemini Research Institute, about 57 per cent of Indian consumers are considering purchasing a car in 2020. This compares more than favourably to the global average of 35%, and ironically the only country to be more bullish than India are the Chinese.

                                    Source: Capgemini

The survey also revealed that almost 44% of consumers say that they will use their car more often and public transport less often and at least 40 per cent say they will make less use of ride-hailing and ride-sharing services. The key reason behind this shift is concern over health and safety. Notably, 66% of potential buyers are looking for health and wellness features, such as air conditioning with germ filters, and, 59% of potential buyers are willing to pay a premium for health and wellness features.

The survey was done in 11 different countries and collected responses of over 11,000 consumers, representing about 62 per cent of global annual vehicle sales and found that health and safety concerns will continue to shape consumer behavior even after this crisis subsides. The year really has proven to be quite an epochal one.

The numbers attest to it as well; commenting on the October 2020 data, which saw Auto sales up 36%, and PV sales grow 14%, Rajesh Menon, Director General, SIAM, said, “The month of October saw continuity in sales growth trajectory, drawing on from the previous month. There were marked improvements witnessed across certain segments due to very good festive demand. The sale of Passenger vehicles went up by 14.19% and that of two- wheelers, grew by 16.88%, compared to October last year. Three wheelers saw a slight improvement in sales, compared to the last month, however, it has still registered de-growth of (-)60.91 %, over the corresponding month of last year.”

Not just new cars, it’s a shift across the board

With public transport still viewed with suspicion, used cars have witnessed a huge uptake, as also the subscription model. In fact, car rental and subscription company Zoomcar saw a 400% rise in demand and it expects this to settle down at 200-300% in the months to come.

Key to the success of both these models is the cheaper price tag for used cards, and the short-term nature of subscriptions that allows flexibility and mobility. A recent survey by OLX, a popular consumer-to-consumer marketplace for pre-owned items, found that 55% of respondents wanted to use personal vehicle in the next 6 months and non-metros are likely to drive the demand. It seems the green shoots of recovery for the auto sector might well be on show.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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