Friday, December 1, 2023

Digitalization: A key enabler of the Indian automotive sector


By Rajeev Singh, Atul Jairaj and Asheesh Shekar

Digitalization has been one of the megatrends disrupting the global auto industry. Indian automotive sector too is no different. The pace of digitalization has been only accelerated by the Covid-19 pandemic.

India is well on its way to becoming a digitally connected society. The country currently has more than 690 million internet subscribers, which is expected to touch 870 million by 2023. The connected reality has fundamentally changed the way Indian customer expects goods and services delivered to him/her.

This has also been accelerated by the Covid-19 pandemic. Automobile OEMs have not been left untouched by this change and many of them are investing heavily in digitalizing the customer journey in order to provide a differentiated experience to their customers.

Importance of a differentiated Customer Experience in the purchase decision

Customer experience often makes or breaks the purchase decision. Customers do not just value the end product, but also value the experience of buying, using, servicing and maintaining the product. A 2020 Forbes Insights global survey found that 77% of consumers surveyed considered customer experience just as important as the quality of its products and services.

Around 65% of the respondents also stated that a positive experience will make them a long-term patron of the brand. Customer experience plays an even more important role in the car purchase journey as it is usually a long-term commitment for most buyers. While the fundamentals of car purchase still stay the same, there is an added component of convenience and connectivity that is playing a role in the car buying process.

Growing customer willingness to purchase online

According to Deloitte’s Global Automotive Customer Study (GACS), 2021, 40% of Indian buyers are willing to acquire their next vehicle virtually. The main reasons behind consumers being willing to opt for a virtual purchase journey are convenience, ease of use, speed and health concerns regarding physical interactions.

It is clear that the brick-and-mortar retail model is getting challenged and this is evidenced by many manufacturers, especially two-wheeler OEMs, today looking at ‘completely online’ sales journeys or at least attempting to cover a large part of the sales journey online. Interestingly, amongst the online shoppers, 60% would prefer to make the purchase from authorized dealerships and 35% directly from the OEM, which indicates that the dealer channel will remain highly relevant, just that the mode of shopping will likely become multi-modal with D2C also gaining prominence

Digitalizing the customer experience

Recognizing this growing willingness to move, at least in part, to a virtual buying process, OEMs have started deploying multiple digi-tech solutions to enhance and personalize the customer journey and to improve sales conversion ratios. We can broadly break this customer journey down to Presales, Sales and After Sales.

Pre-sales Journey

Online has become a primary source of research for new car buyers and they rely on search engine results, online videos, dealer websites, online ads etc. before they pick an OEM and dealership. Realizing this, OEMs are leveraging the power of digital marketing and influential marketing to reach their target customers. Most new product launches by OEMs have a heavy focus on digital marketing campaigns. Data and click analytics help OEMs personalize marketing campaigns.

Automobile dealership

Sales Journey

Dealerships can assess customer needs without initiating the first physical conversation based on data captured from their websites which are powered by Lead Management Systems. Some large OEMs are in the process of deploying virtual showrooms to facilitate customer interactions with Sales Consultants without them having to leave the comfort of their homes.

Solutions like car availability tools can help customers in choosing their preferred model, variant, colour and understand the availability of their preferred car across dealerships. Dealerships can use social profiling tools to curate personalized offers and discounts, thus maximizing the probability of converting the sale. Paperless financing solutions have made car finance more accessible.

Around 2 in 3 consumers surveyed in GACS, 2021 were comfortable with completing the finance transaction via live video on mobile. However, there are certain aspects of the journey which may take longer to get completely digitalized. The GACS, 2021 shows that 44% of the respondents desire a physical test drive before committing to a purchase.

After-sales journey

Over 90% of the consumers surveyed in the Deloitte GACS, 2021 stated that they are willing to explore virtual servicing options and a large proportion of them are willing to pay a reasonable fee for the service. To tap into this demand, OEMs are deploying digital solutions to transform the After Sales journey as well.

Connected car technology can leverage car data to diagnose the servicing needs and then set up an appointment at the appropriate time with the preferred workshop. On a click, digital car service history reports provide workshops and customers with insights into the operational record of the car and provide customized service options. Service cams can provide real-time live updates on the progress of car servicing.

The advent of the pandemic and the significant investments being made by OEMs into innovative digital customer experience solutions will encourage more consumers to explore digital solutions experience in the years to come. OEMs need to gear up and adapt or lose the race for acquiring the new age digital customer.

Also Read: Automotive sector and colossal data: Challenges and way forward

(Rajeev Singh is Partner and Auto Leader, Deloitte India. Atul Jairaj is Director at Deloitte India and Asheesh Shekar is Senior Consultant, Deloitte India.)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


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