1 in 3 car buyers likely to buy electric vehicle: Survey

As India prepares for the festive season, a period traditionally marked by heightened consumer spending, Way2News, a prominent hyperlocal news platform, has released its latest report titled “Gearing Up: A Look at India’s Car-Buying Mindset.” Based on insights from over 400,000 respondents across the five southern states—Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala—the report offers a detailed examination of evolving preferences and behaviours among car buyers in South India during this key sales period for the automobile industry.

While the 2023 festive season saw record car sales in the Indian market, driven by a 19% increase fuelled by pent-up demand, 2024 presents a different scenario. The Indian automotive sector is currently experiencing a slowdown, with reports suggesting that around 700,000 unsold cars, worth an estimated ₹70,000 crores, are languishing at dealerships across the country. This surplus, if unresolved, could exert considerable financial pressure on dealers. The period from Navratri to Diwali has long been a pivotal one for car manufacturers, with sales typically peaking as buyers time their purchases with auspicious dates. However, in 2024, this window is viewed as critical not just culturally but economically, as experts see it as the industry’s best opportunity to reverse the downward trend and stimulate demand.

The Way2News survey highlights this potential for recovery, revealing that 42% of respondents intend to buy or upgrade their car within the next 12 months, suggesting a possible rebound after a challenging period for the market. Strategic marketing efforts that align with consumer preferences could enable manufacturers to seize this opportunity and drive success.

The report identifies key shifts in consumer preferences, providing insights that could guide automakers in addressing the current market landscape. One notable trend is the growing emphasis on safety features, with 43% of respondents prioritising safety systems such as airbags, ABS, and advanced driver assistance systems (ADAS) over traditional factors like price or fuel efficiency. This focus reflects a heightened awareness of road safety among buyers in South India, a shift from previous years when factors like design and affordability played a more central role in decision-making.

SUVs continue to dominate the market, with 58% of respondents expressing a preference for this category. The rising popularity of SUVs is not merely a trend but indicative of the lifestyle aspirations of modern buyers, who value space, practicality, and comfort. Sedans, hatchbacks, and MUVs account for smaller segments of the market, trailing significantly behind SUVs in consumer preferences.

Another significant finding is the increasing interest in electric vehicles (EVs), with 31% of respondents expressing an interest in purchasing an EV. This shift towards more sustainable options is in line with broader industry trends, including the government’s push to phase out diesel vehicles. The report indicates that the move towards eco-friendly vehicles is not just a temporary trend but a long-term shift that is likely to influence the future of the Indian automotive industry.

The report also highlights the growing role of digital platforms in shaping car-buying decisions. Over two-thirds of respondents now rely on online resources, such as social media, comparison websites, and online reviews, to inform their vehicle choices. This trend underscores the importance of a strong online presence for automakers and dealerships, as digital channels become increasingly central to consumer research and decision-making.

In addition, financing options are becoming a key factor for buyers, with more than half of respondents turning to car loans and instalment plans amidst rising fuel costs and higher interest rates. Flexible financing solutions are likely to play a crucial role in driving sales during the festive season.

Raju Vanapala, Founder and CEO of Way2News, commented on the findings, saying: “The survey results highlight a significant shift in consumer priorities. Safety, SUVs, and sustainability have become the core drivers of the auto industry in South India as we approach the festive season. Understanding these evolving preferences will be key for automakers as they navigate the challenges of the market this year.”

As South India enters the festive season, the focus for automakers is not just on boosting sales but on building trust and connecting with consumers through values such as safety, sustainability, and lifestyle appeal. By strategically leveraging this period, manufacturers may be able to overcome the challenges of a slowing market while fostering a strong brand presence that resonates with modern car buyers. This festive season could prove to be a pivotal moment for the industry, offering the potential for renewed growth and innovation.