The auto industry might experience an uncertain demand as most people have altered their initial plans due to Covid
The coronavirus-induced economic slowdown impacted many industries and businesses, including the automotive sector. India's second COVID wave might derail the country’s economic recovery, adding to the worries of carmakers. YouGov’s latest study looks into the impact of the pandemic on the auto industry and reveals how car purchase plans have changed post the second wave.
As the vaccination drive began in India and Covid was believed to be under control early this year, three in ten (29%) urban Indians said they were planning to buy a car, the data reveals. However, the second wave of the pandemic has disrupted their planning and only one in five (22%) out of them are likely to go ahead with their plan of buying a car, while some (13%) have completely given up their plan or have switched the category of the vehicle; to a two-wheeler now instead of a car (10).
Others experienced changes in the form of postponement of their plan to buy a car (29%), change in their budget (27%) or change in the car type that they planned to buy (19%). Interestingly, two in five (19%) respondents have shown willingness to buy pre-owned/second-hand cars, which is a positive sign for pre-owned car dealers.
Not only plans, but the second wave of the pandemic has also even disrupted the timelines to buy a car. Initially, almost two in five (37%) consumers were planning to make a purchase within three months. However, with the second wave hitting the country, this number has fallen to 19%.
Most people seem to have pushed their car buying decisions to a later period and are looking to purchase a car somewhere between 4-6 or 7-12 months from now.
Likewise, there have been changes in the car types that people want to purchase now, with many turning towards more value-conscious options. Before the second wave, hatchbacks were the most popular cars people wanted to buy, followed by premium hatch cars.
Preferences have changed post the second wave of the pandemic and entry-level sedans (Dzire, Amaze, Tigor, Altroz, etc) have seen the greatest shift in demand between the two periods. From 13% who were planning to buy this model earlier this year to 21% looking to buy this type of car now. On the other hand, premium sedans have seen a decline (from 11% to 5%).
Premium hatchbacks and MUVs have also seen a growth in preference by 3% each.
Within the SUV segment, the demand for compact (11%) mid (7% vs 6%) & premium SUVs (6%) remained static.
Although people admit to their plans getting affected by the pandemic, their reasons to change their plans vary. A large majority of people are waiting for the situation to improve (43%), hence, delaying their plans to buy a car by few months.
28% have suffered financially (job/health) to stick with their planned purchase while a third are holding back as they want to save money for unforeseen situations
Some (31%) have voiced their inability to use a vehicle because of staying home for an extended period as the reason to change their plan.
Commenting on this, Sanjeev Jha of YouGov India, said, “The pandemic has brought about marked changes in consumers’ car buying plans in India. The outbreak has affected customers’ finances, driving a conservative outlook in them and diverting them to more immediate needs. As consumers wait for the situation to improve, auto manufacturers will have to understand changing consumer preferences and devise innovative strategies to offer cost-effective or better financing options to them.
Regular understanding of the changing plans of customers will help the automakers efficiently plan their production and inventory management at the dealers’ end. The players in the pre-owned car market should reach out to the prospective customers aggressively and offer the safety of a car at a pocket-friendly price.”
YouGov Omnibus data collected online among around 1005 respondents in India between April 27th - 30th, 2021, belonging to majorly NCCSA (90%) category with equal gender split and an age group of 18+. The survey was run using YouGov’s panel in India. A total of 1005 respondents were contacted of which 295 answered regarding the changes in their planned car purchase.