69% consumers in India keen for subscription-based vehicle ownership: Deloitte Global Automotive Study

• 65% consumers intend to acquire a less expensive vehicle
• While 38% of consumers intend to postpone the vehicle purchase an equal number of consumers also intend to preschedule their vehicle purchase indicating demand prevail
• Digital tech adoption increases as 81% consumers feel that increased vehicle connectivity will be beneficial
• 27% consumers are willing to purchase their next vehicle through a fully virtual route and 40% respondents are willing to pay a reasonable fee for virtual servicing

National, 21 January 2021: Deloitte Global Automotive Consumer Study 2021 highlights 69% Indian consumers are willing to try subscription-based ownership and servicing of different models from the same brand. The emerging trend, at the back of the pandemic which has left them more cost conscious, is seen the highest among Indian consumers, followed by China and the Republic of Korea. With 37% consumers planning to buy a car in India much earlier than planned, the subscription model is a viable option for the consumer, OEMs as well as distributors indicating a greater demand to mobility option in the marketplace.

The 2021 Global Automotive Consumer Study, aims to provide important insights that can help companies prioritise and better position their business strategies and investments in the years to come.

The study, in its 12th year, provides insights from 24,000 consumers across 23 countries on how they feel about electric vehicles, vehicle purchasing, financing, and more. According to the study, Indian consumers have altered their timeline for acquiring new vehicle, and are willing to consider more affordable options.

Shift in consumer mindset

· Shifts in consumer mindset shows them rethinking about not only their next vehicle purchase, but also what type of vehicle they will buy next. Timelines for acquiring their next vehicle varies greatly across the world and approximately one-third of consumers in India (38%) plan on delaying their next vehicle purchase and 65% consumers intend to acquire a less expensive vehicle indicating a downside demand risk in the country.

· Newer financing options emerging and over 50% of Indian consumers would like to go for early termination as an option for vehicle finance accounts.

Significant uptick on technology adoption:

· Indian consumers show a strong inclination towards digital and technology adoption as 81% of them prefer connected cars, owing to the benefits and convenience that comes through smart phone connectivity.

· There is also a conscious approach seen towards data sharing, as 66% Indians fear data theft and hacking into their connected car. Indian respondents have shown willingness to pay up to Rs 25,000 more for a vehicle with advanced technologies.

Commenting on the launch of the report, Rajeev Singh, Partner and Automotive Leader, Deloitte India said, “The automotive industry took COVID-19 pandemic as an opportunity to open up a new world of possibilities whilst delivering the message that technology and personalization will play a critical role to facilitate topnotch products and after sales service with an advanced customer experience being at the core of strategies.

Our survey report shows newer alternatives of vehicle ownership including 48% of consumers interested in paying a reasonable fee for virtual servicing. The change in consumer preference has also enabled auto players to invest in advanced vehicular technologies.”

Other trends from the report:

· While there will be virtual vehicle sales, Indians still want an in-person experience: Even though COVID-19 has propelled sale of vehicles virtually and India is leading the chart amongst other countries in this regard, 60% of respondents still wanted to have the look and feel of the vehicle before making the buying decision

· EV adoption still warming up and hybrid or ICE still the preference for Indian consumers

Another interesting trend emerging in the survey is that, though there has been a longer-term trend toward EVs (electric vehicles), 68% of Indian respondents still prefer gasoline/diesel and internal combustion engine powertrain for their next vehicle, as they look for more familiarity and affordability in the face of near-term uncertainty.

The top concern about EVs in India is majorly due to lack of charging infrastructure (26%), followed by safety concerns (25%), whereas the major concern in developed economies like US and Germany is the battery range.

· Brands are leading their way in building relationship with their consumers: Consumers across geographies feel most connected to either the brand of vehicle they currently own or the dealer where they bought it from. While 55% Indians have a trusted relationship with the brand, 28% Indians also share a trusted relationship with their purchasing dealer.

Notes to the editor for reference purposes only:

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

Deloitte India herein refers to Deloitte Touche Tohmatsu India LLP.