Hyderabad, India – As the Indian auto market enters the highly anticipated festive season, a period traditionally linked with a surge in car sales, a new report from Way2News signals a significant transformation in the way consumers approach car buying. The report, titled “Gearing Up: A Look at India’s Car-Buying Mindset,” surveyed over 400,000 respondents across the five southern states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala, revealing critical insights that could reshape the auto industry.
From Peaks to Plateaus: The Changing Market Landscape
While the 2023 festive season witnessed record-breaking sales in the Indian auto industry with a 19% spike, 2024 tells a different story. The slowdown in the market has been stark, with an estimated 7 lakh unsold vehicles clogging dealership inventories across the country, worth approximately ₹70,000 crores. This glut in unsold cars highlights the urgent need for automakers to find innovative solutions to revitalize consumer interest.
With the festive season offering a prime opportunity to reverse this slowdown, the Way2News report offers optimism. The survey reveals that 42% of respondents intend to buy or upgrade their vehicle within the next 12 months. This could signal a resurgence in demand, provided automakers tap into the changing preferences and values of today’s consumers.
Safety First: The New Non-Negotiable
The Way2News survey uncovers a striking shift in priorities. Safety features have emerged as the top concern for 43% of car buyers, outpacing traditional factors such as price or fuel efficiency. Buyers are increasingly demanding advanced safety technologies like airbags, ABS, and driver assistance systems, reflecting a heightened awareness of road safety issues in South India. This shift could be attributed to both growing consumer education and government-led safety initiatives.
Safety’s rise to prominence marks a departure from the era when aesthetics and affordability dominated car-buying decisions. Automakers must now focus on integrating robust safety features across vehicle categories to capture this growing demand.
SUVs Reign Supreme: A Status Symbol
In another significant finding, 58% of respondents expressed a preference for SUVs, cementing their dominance in the market. For today’s buyers, SUVs are not just vehicles; they symbolize status, power, and lifestyle aspirations. Buyers are prioritizing space, durability, and comfort, making SUVs the go-to choice for families and professionals alike.
While SUVs continue to dominate, sedans (20%), hatchbacks (14%), and MUVs (8%) have largely become niche products, appealing to more specific consumer groups. The preference for SUVs aligns with a broader global trend, where the utility, higher seating position, and premium image of SUVs make them particularly appealing to modern car buyers.
The Green Revolution: Electric Vehicles Gain Traction
One of the most surprising revelations of the report is the growing interest in electric vehicles (EVs). A significant 31% of respondents expressed intent to purchase an EV in the near future. As global conversations around sustainability intensify, consumers in South India are also reflecting this shift, with 65% prioritizing eco-friendly options.
Union Minister Nitin Gadkari’s recent push to phase out diesel vehicles has also played a role in nudging consumers towards cleaner alternatives. The industry is witnessing a shift from merely seeing electric vehicles as an experiment to recognizing them as the future of mobility.
The Digital Influence: A New Frontier in Car Sales
The car-buying journey in South India is increasingly being shaped by digital platforms. Over two-thirds of respondents rely on online resources such as social media, comparison websites, and online reviews to make informed decisions. The survey found that 43% of respondents discovered new car models through digital media, and social media influences 37% of buyers.
This shift emphasizes the growing importance of a strong digital presence for automakers. With word-of-mouth now taking a back seat, car brands must invest in building engaging digital ecosystems and ensuring a seamless online-to-offline buying experience.
The Power of Flexibility: Financing & Affordability
In the face of rising interest rates and fuel costs, financing has become a key consideration for buyers. The report found that 36% of respondents are opting for car loans, and another 33% are using installment plans, indicating a growing reliance on flexible payment options. Cash payments, once the traditional mode of car purchases, have fallen to 29%, underscoring the demand for budget-friendly financing solutions.
Pre-Owned Cars: The Smart Choice
A noteworthy trend in the report is the increasing popularity of pre-owned vehicles. A full 51% of respondents indicated that they are open to buying second-hand cars, highlighting a practical shift towards value and reliability. Moreover, 49% of buyers expressed interest in exchange offers, demonstrating a willingness to trade in old cars to secure better deals on newer models.
After-Sales Services: A Deal-Maker
After-sales services, such as maintenance packages and free servicing, are becoming critical to customer satisfaction. With 38% of respondents prioritizing maintenance options, the focus has shifted from simply buying a car to ensuring its long-term reliability. For automakers, offering compelling after-sales services could be the key to retaining loyal customers.
A Perfect Storm for Automakers
As the 2024 festive season unfolds, the Indian auto market is standing at a crossroads. While traditional factors like affordability and aesthetics still hold some sway, the survey shows that safety, sustainability, and digital conveniences are now the true game-changers. This season represents more than just a sales opportunity—it’s a critical moment to adapt to the new consumer mindset.
Brands that recognize these shifting preferences and align themselves with modern buyer values are likely to emerge as winners in this evolving landscape. From prioritizing electric vehicles to embracing digital strategies and offering flexible financing options, automakers can use the festive season as a launchpad to not only drive sales but to build lasting connections with today’s discerning buyers.
A Time of Transformation
The festive season, often seen as a peak time for car sales in India, now carries with it the weight of transformation. Automakers who navigate these emerging trends—prioritizing safety, eco-friendly options, and digital engagement—will set the pace for the future of the Indian auto industry. As consumer preferences evolve, so too must the industry, and this festive period could well be the inflection point for a new era in South Indian car buying.
