On a personal mobility drive, first-timers hit motown

Mumbai: Shweta Pandit, a 47-year-old CFO at a financial firm in Mumbai, was hunting for two cars post lockdown — a replacement for her Toyota Corolla and a compact SUV for her daughter who’s starting work soon. She was clear about one thing right from the start — in the post-pandemic world, public transport was a bad option. “Given the woeful public transport in the city, there is no alternative but to look for a personal mobility option...,” she said. As Pandit mulled over her options, several hundred kilometres away in Bijnor, 27-year-old Devendra Singh Pundir was struggling with a somewhat similar problem — reaching office in the absence of public transport in this western UP town. After considering all options, Pundir — a librarian at a secondary school — decided on a two-wheeler. “The cash offers and terms of financing for the salaried class built a strong case to choose personal transport in times of pandemic despite upfront payment of around ₹10,000,” he said. Rising sales of cars and two-wheelers hide an important story about the structural change in the nature of vehicle purchases. From items of conspicuous consumption, cars and bikes have become a necessity as public transport remains shut in large parts of the country and people worry about contracting Covid-19 in buses and trains. The numbers tell the story better.The share of first-time car buyers has hit almost 50% in the first six months of this financial year, a 700 basis points rise compared with FY20. The number of additional car buyers too has gone up by 300 basis points to 33%. In case of two-wheelers, the share of first-time buyers has seen a 500 basis points increase to 75%.78820038‘Buying Behaviour has Changed’At the same time, the share of replacement car buyers has come down from 27% to 19% with disposable incomes getting impacted. The share of fleet or taxi purchases too has fallen to 3-4% from 8-9% earlier.Shashank Srivastava, ED-sales and marketing, Maruti Suzuki, said buying behaviour has definitely changed post-Covid. Some changes may be temporary but others are here to stay."To begin with, conspicuous consumption has shifted to conscious spending. The aversion to public transport and shared mobility coupled with the expected lower income levels has resulted in car buying for functionality and utility with aspirational buying a little muted. This is reflected in a larger share of first-time buyers, salaried buyers and lower share of replacement buying. Also, demand patterns have shifted downwards," added Srivastava.Maruti Suzuki calls this phenomenon ‘telescoping of demand’ and says it should not be confused with the evaporation of demand for any particular segment. The longevity and durability of these demand patterns clearly depend on the Covid time frame, officials said.In June 2020, as India was gradually unlocking economic activity, a team at Hyundai Motor India kicked off a study on how buying behaviour will change post Covid-19.Hyundai was conscious of a fall in disposable income of prospective buyers, but executives were surprised to note another interesting trend —the emergence of a new set of buyers driven by the need to have a personal vehicle. These consumers used public transport such as autos and shared cabs for last-mile connectivity or short rides but had come around to considering buying a vehicle now. The same trend was corroborated by a ‘Turn the Tide’ study conducted by Facebook-Boston Consulting Group between March and May, which covered over 100 cities across a demographic profile, gender, age group. The study showed that almost 51% of participants had preferred public or shared transport for commuting before the onset of Covid-19 lockdown —that number had come down to 30%.The share of potential car buyers who preferred public or shared mobility had also shrunk to 52% from 67% pre-Covid, the study showed.Ravi Bhatia, head of auto consultancy firm Jato Dynamics India, says the virus has altered people’s perception and need for safety and that is likely to attract more current non-users to the automotive industries fold.

from Economic Times https://ift.tt/3mfmZpj