Deloitte’s 2024 GACS reveals a shift as 50% of Indian consumers move from ICE to favor Hybrid Electric Vehicles (HEVs) for their next cars.
The Influence of Affordability
Affordability emerges as a pivotal factor, with a whopping 80 percent of consumers targeting vehicles within the INR 5–25 lakh price range.
The study indicates that 59–58 percent of consumers favor ICE and Electric Vehicles (EVs) in the INR 10–25 lakh range. For the more budget-conscious, 23 percent lean towards ICE, while 22 percent show interest in EVs in the INR 10 lakh and below category.
Environmental Consciousness Takes Center Stage
Approximately 68 percent of respondents highlight environmental consciousness as a significant motivator, while 63 percent express concerns about reducing fuel expenses.
Charging infrastructure plays a crucial role, with 66 percent planning to charge at home and 22 percent at public stations. The study underscores the importance of fast charging and the preference for familiar payment methods, such as traditional credit/debit card payments.
Battery Management
While challenges like charging time and infrastructure persist, consumers expect responsible battery management. 68 percent look to dedicated battery recycling companies, EV battery manufacturers, and vehicle dealers to lead in collecting, storing, and recycling EV batteries. Despite challenges, the study indicates a growing preference for hybrid technology in the next vehicle purchase.
Insights from Deloitte’s Rajeev Singh
Rajeev Singh, Partner and Consumer Industry Leader at Deloitte Asia Pacific, emphasizes the evolving consumer preferences.
He notes the inclination towards ‘New’ cars over ‘Used’ ones, driven by a booming economy and changing consumer attitudes.
Singh underscores the need for transparency, with consumers willing to invest more if guided transparently.
Emerging Trends in the Automotive Sector
1. OEMs Disrupting the Insurance Landscape
OEMs are exploring in-house insurance products, disrupting the traditional value chain. An impressive 83 percent of consumers express interest in purchasing insurance directly from manufacturers, citing convenience and cost savings.
2. Connected Vehicles
Safety is paramount for Indian consumers in connected vehicles. 71 percent are willing to pay extra for connectivity features, with a strong desire for updates related to road safety, collision prevention, maintenance, and vehicle health.
3. New Vehicle vs. Used Car Trend
Despite interest in both, 77 percent of consumers prefer buying new cars for their next vehicle. Technology features (64 percent) and the desire for something new (50 percent) drive this preference.
4. OEM’s Commitment to Sustainability
A striking 98 percent of consumers believe that vehicle brands must commit to sustainable practices, including environmentally friendly materials and a low carbon manufacturing footprint.
5. Younger Consumers and Vehicle Subscriptions
Younger consumers are steering the interest in vehicle subscriptions, with 60 percent open to giving up vehicle ownership for subscription services. Key factors include cost control, convenience, availability, and flexibility.