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Indian Consumers Shift Towards New Cars: Here's Why
Deloitte's 2024 Global Automotive Consumer Study (GACS) reveals a significant shift in consumer preferences within India's automotive industry, with a growing inclination towards new cars over used ones.
One of the key findings of the study is the increasing consideration of alternative propulsion technologies among Indian consumers. Nearly half of the respondents are contemplating a move away from internal combustion engine (ICE) technology, with 24 percent expressing interest in hybrid electric vehicles (HEVs) for their next vehicle purchase.
This shift reflects a growing awareness and acceptance of electric and hybrid vehicles in the Indian market. Affordability is a critical factor driving purchasing decisions, with 80 percent of consumers preferring vehicles priced between rupees 5 lakh and rupees 25 lakh.
Interestingly, preferences for both ICE and electric vehicles remain strong within the rupees 10 lakh to rupees 20 lakh price range bracket, indicating a willingness to invest in environmentally friendly options within this price segment.
Environmental consciousness plays a major role in consumer decision-making, with 68 percent of respondents prioritizing eco-friendly options. Reduced fuel expenses also weigh heavily on consumer preferences, with 63 percent seeing this as a key factor. Access to charging infrastructure is crucial, with a majority of consumers preferring fast charging options and simple payment methods such as traditional credit/debit card payments.
The study underscores the importance of responsible battery management, with consumers expecting companies in the automotive industry to lead in collecting, storing, and recycling EV batteries. Despite challenges such as charging infrastructure and battery safety, there is a prevailing preference for hybrid technology among consumers.
Rajeev Singh, partner and consumer industry leader at Deloitte Asia Pacific, highlights the economic growth and evolving consumer preferences driving the shift towards new cars over used ones. He stated that the opportunity for OEMs to grow their consumer retention services by focusing on transparency and connected car offerings.
The study also reveals a growing maturity in automotive brand adoption, with consumers prioritizing qualitative features and environmentally friendly options over cost considerations. OEMs should explore in-house insurance products and the rising popularity of vehicle subscriptions among younger consumers.
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Overall, Deloitte's GACS provides valuable insights into the evolving dynamics of India's automotive market, highlighting the shifting preferences and behaviours of Indian consumers towards new cars and environmentally friendly options
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