As India approaches its festive season, Way2News, has unveiled its latest report, “Gearing Up: A Look at India’s Car-Buying Mindset.” The report, based on responses from 400,000 participants across South India’s five major states-Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala, reveals significant changes in consumer preferences and behaviours, offering critical insights for automakers during this vital sales period.
Despite the automobile sector celebrating record sales in the 2023 festive season, boosted by a 19% rise driven by pent-up demand, the industry faces a contrasting picture in 2024.
Recent reports show approximately 7 lakh unsold cars, worth nearly Rs 70,000 crores, sitting idle in dealerships across the country. This inventory glut threatens to financially strain dealers unless consumer demand picks up during the upcoming festive period. Traditionally, the months from Navratri to Diwali have been the lifeline for automakers, but this year, it represents a crucial moment for reversing the downward trend in sales.
According to the Way2News survey, 42% of respondents plan to buy or upgrade their car in the next 12 months, offering a glimmer of hope for the sector. Automakers who leverage consumer insights and prioritize strategic marketing could capitalize on this opportunity to reignite demand.
Key Insights from the Report:
1. Safety takes the spotlight
The report highlights a significant shift in buyer priorities, with safety emerging as the top factor for car purchases. 43% of respondents now place safety features like airbags, ABS, and advanced driver assistance systems (ADAS) ahead of traditional considerations such as price or fuel efficiency. This shift reflects an increased awareness of road safety among South Indian consumers, signalling a departure from earlier trends where aesthetics and affordability dominated.
2. SUVs lead the pack
SUVs continue to dominate South India’s car market, with 58% of respondents favouring this category. The SUV craze represents more than just a preference for bigger vehicles; it symbolizes status, comfort, and a lifestyle upgrade for buyers. In contrast, sedan, hatchbacks, and MUVs cater to niche markets but lag significantly in popularity.
3. EVs on the rise
Sustainability is becoming a major driver of purchasing decisions, with 31% of respondents expressing interest in buying electric vehicles (EVs). This trend coincides with the broader push to phase out diesel vehicles and embrace eco-friendly options. With 65% of car buyers prioritizing green choices, the auto industry is likely to see a major shift toward electric mobility in the coming years.
4. Digital platforms influence decisions
The survey underscores the rising influence of digital platforms in car-buying decisions. Over two-thirds of respondents rely on online resources – social media, comparison websites, and reviews – to inform their purchases. This digital-first approach emphasizes the need for automakers and dealerships to build strong online presences and reputations.
5. Financial flexibility becomes crucial
Affordability and financing options have become key considerations, with over half of the respondents opting for car loans or instalment plans. With rising fuel prices and loan interest rates, automakers must offer flexible financing solutions to attract buyers during this festive period.
Raju Vanapala, Founder and CEO of Way2News, highlighted the importance of these findings for the industry: “Safety, SUVs, and sustainability are no longer trends – they are the core drivers of the auto industry in South India as we approach this festive season. Automakers must adapt to these evolving preferences to successfully navigate the market challenges.”
As South India gears up for the festive season, automakers face an opportunity not just to boost sales but to build lasting connections with consumers on safety, sustainability, and lifestyle appeal.