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Old 9th June 2007, 14:54   #1
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Default Understanding the Indian Car Buyer

A lot has been said about the Indian car buyer. Many companies dont include features found on their models abroad in India because they feel that the Indian car buyer just wont appreciate the extra features.Just how different is the Indian car buyer from his/her international counterpart? Here are a few things said about the Indian car buyer below which I have included a brief analysis. Feel free to counter my analysis or add points of your own

1. Indians consider FE to be one of the most important factors while chosing a car.

Who can blame us? We earn a lot less as compared to people abroad yet we have to pay the same amount or sometimes even more for Petrol. Filling up isnt exactly cheap and if a car is more efficient isnt that a good thing?


2. Indians dont consider the number of safety features installed an important factor while chosing a car.

Again companies arent really doing much to promote the safety features or explain their importance. In fact often salesman are against ABS and Airbags. One salesman i spoke to told me about how ittl cost me a lakh and a half to get an airbag replaced and how "aap gaadi toh dhyaan se hi chalaoge na". Others have insisted that ABS and Airbags only work on the highway and are completly useless in the city. Also besides the Swift zxi (which also costs around 6lakhs OTR) there arent too many "cheap" cars with anyof these safety features installed.More needs to be done to make the indian car buyer understand the importance of these safety features

3. Indians consider VFM to be an important factor while chosing a car

This is something I think is really true. Indians really want something thats "vasool". We really want something that we feel is worth every penny and if somthing has good value we dont mind even spending a little more to get it.

4. Indians dont mind settling for a car thats slightly old and phased out in other markets

Well this is slowly becoming false. It was true a couple of years ago but now with the consumer being offered more and mroe choice we are now slowly moving away from cars phased out in other countries and want the latest cars.

5. Indians are brand concious.


We are brand concious but we dont really take the international value of the brand. How else can you explain the success of Skoda and Hyundai in India? However we also fall for brands like Honda and Mercedes and are willing to pay a premium for their cars.

6. Indians wont appreciate the extra cost being paid for features factory installed on cars.

We often feel that we can get something better for our car for a lot less money if bought on our own. A lot of us dont like integrated stereos and prefer to install a stereo from an accessory shop. The same goes for seat covers, alloys wheels, spoilers etc.
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Old 9th June 2007, 16:20   #2
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Default We do appreciate factory installed accessories.

Quote:
Originally Posted by khanak View Post
6. Indians wont appreciate the extra cost being paid for features factory installed on cars.

We often feel that we can get something better for our car for a lot less money if bought on our own. A lot of us dont like integrated stereos and prefer to install a stereo from an accessory shop. The same goes for seat covers, alloys wheels, spoilers etc.
True and false. For one, excise duty on cars is a bit higher, and since factory installed accessories add to the cost of manufacturing the car, impact of excise duties multiply the ex-show room price. For example, a Rs. 1000 widget will cost, say Rs. 1100 from the after market dealer, including installation; but from the factory, the additional burden will be at least 1750 due to the manufacturers' overheads and excise duties.

This is however becoming false because people nowadays opt for variants with factory fitted a/c powerwindow, etc. (powersteering is always better if fitted from factory).
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Old 9th June 2007, 16:24   #3
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1. Indians consider FE to be one of the most important factors while chosing a car.
True.
Another point i would like to add with this is the liking for diesels. Indians are willing to pay a premium for diesel cars, even though their monthly running may not justify that amount.

2. Indians dont consider the number of safety features installed an important factor while chosing a car.
Also true, but it has changed a bit recently. Swift ZXi is not too rare on the roads. But, for small cars, safety doesn't affect the sales numbers.

3. Indians consider VFM to be an important factor while chosing a car
Hard earned money. Who wouldnt want more for less?

4. Indians dont mind settling for a car thats slightly old and phased out in other markets
Times sure are changing.

5. Indians are brand concious.
Skoda and Hyundai were not know much when they came to India. But, their products were suited to Indian conditions. Both the companies didnt have competition from reputed companies. And they could establish themselves in the market.
But, IMHO, i dont agree that skoda and hyundai are respected much (relative- Skoda commands respect as a maker of 10-15L segment cars and not in segments above it) in the market. Hyundai is struggling with all their products in the upper segments, and Skoda hasnt been able to press the Superb well.
Indians do respect international brands. Biggest example is Honda and the premium buyers pay to get the Honda brand.

6. Indians wont appreciate the extra cost being paid for features factory installed on cars.
True- But, i dont think manufactures were offering latest products as offerings. Suzuki has has decent succces with ZXI variants of Swift and SX4. However, if you take other manufacturers, say Honda, the Civic comes with an integrated Stereo, which didnt have an Aux-in, until the 1.8V was launched this week. Company offered leather seats are not always the best available, and usually commands a premium on the price tag too. Guess its the VFM tag that buyers are going for.

Just my humble opinion.
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Old 9th June 2007, 18:48   #4
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Quote:
Originally Posted by khanak View Post
1. Indians consider FE to be one of the most important factors while chosing a car.

absolutely right
2. Indians dont consider the number of safety features installed an important factor while chosing a car.

Safety is the last priority in Indian markets. So many versions without airbags sell more than their loaded sisters. In a certain Toyota dealership one salesman was overheard explaining to a prospective Innova buyer that even if he buys the car with the airbags what difference will it make to him in a crash as there is only the driver side airbag in the innova. To my surprise, the Guy booked the version without an airbag. According to me , 2 Airbags should be made mandatory in all Indian cars like it is in Japan.
3. Indians consider VFM to be an important factor while chosing a car

Cant get the Indian to not try and squeeze every bit of a deal can we?
4. Indians dont mind settling for a car thats slightly old and phased out in other markets

On the contrary. I think Indians want the latest versions...only they want it cheap

5. Indians are brand concious.


Yes we are, at the higher level of cars, we certainly are


6. Indians wont appreciate the extra cost being paid for features factory installed on cars.

That is slowly changing except in cases where the fitting is available in the open market for much lesser value. Take tyres for instance. I would never suggest to anyone to do a tyre upsize from the dealership. Its atleast 30 percent dearer if not more.
In short the VFM tag is what gets the Indian consumer. Indians by nature are bargain hunters and will want to get the maximum bang out of the buck. Nothing wrong with that but times are changing. With the new generation and awareness of the Indian people, tastes are changing. One can only judge from the Lambos and the Ferraris and the RRs and Bentleys making their foray into our market. Times are changing my man but the bargain hunter mindset is going to be there for ever.
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Old 9th June 2007, 20:34   #5
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Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
True and false.

This is however becoming false because people nowadays opt for variants with factory fitted a/c powerwindow, etc. (powersteering is always better if fitted from factory).
Not exactly...

All those have become part of standard package now, and people have got used to such features in even small cars...

But, when it comes to ICE, Leather seats, alloys etc, many still prefer them done on their own.
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Old 9th June 2007, 23:26   #6
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Nice thread, khanak.



Quote:
Originally Posted by khanak
4. Indians dont mind settling for a car thats slightly old and phased out in other markets
Fortunately, this trend is starting to become the minority ratio.


Quote:
Originally Posted by khanak
5. Indians are brand concious.
Yes and no. Branding becomes crucial as the segment increases. At the segments that the common man looks at, VFM is often the single largest criteria than brand.


Quote:
Originally Posted by khanak
6. Indians wont appreciate the extra cost being paid for features factory installed on cars.
Speaking for myself - I dont mind paying the extra buck for factory fitment- irrespective of VFM status; I associate peace-of-mind with direct factory support and would prefer not to have any after-market shop touch my car. But the biggest peeve currently is desirable features/options not/partially-only available from manufacturers. For e.g, range of upsized wheels and tyres for a model.
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Old 9th June 2007, 23:30   #7
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Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
This is however becoming false because people nowadays opt for variants with factory fitted a/c powerwindow, etc. (powersteering is always better if fitted from factory).
Very right sir but IMHO, gone are the days when a/c was put externally. Those were the days of the fiats and ambassadors when one had no choice. I dont think anyone save a very minscule minority would indulge in this act of getting an a/c put externally. Secondly whoever heard of putting a power steering on a car externally. What i mean is that, yes, it can be done but i dont know a single person who has bought a non power steering variant and got the power steering put externally. This im sure will cost more than getting a variant with the power steering as a factory install. Power window yes, some persons do get an external fitting done but not advisable.
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Old 10th June 2007, 02:17   #8
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Actually let me put it this way most of the points are common amongst consumers globally otherwise the japanese manufacturers would never have become what they are now.Europeans are also in love with diesel.

Its only of late that we have become more mature and we are becoming more and more in line with the global customer.
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Old 10th June 2007, 10:16   #9
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VFM is loosely V/M. V = perceived. The Mercs succeeded when they launched recent iterations, and more models, even tho they came at a higher price. If the V feels high enough, cranking up the M is not an issue either
Of course, the set that defines V is a very different one for the market here. Social image, resale issues, FE rank somewhere in the top 5, usually, even for those buying expensive cars.
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Old 10th June 2007, 19:23   #10
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2. Indians dont consider the number of safety features installed an important factor while chosing a car.

In fact I am guilty of belonging to this category till very recently, as the only blemish in my 8 years of driving is a fender bender on a high speed road, where I could slow down enough to avoid major damage, but not enough to avoid a trip to the body shop. Otherwise the common sense approach of keeping distance, patience in overtaking situations, giving myself enough time to reach the destination, etc., has served me well.

But of late, I have become exceedingly convinced me that you cannot have too much of safety (probably part of the aging process) and it will definitely play a big part when I buy my next car.

Great write-up by the way!!!

Thanks,
Amit.
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Old 24th November 2012, 12:46   #11
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Default Re: Understanding the Indian Car Buyer

Quote:
Originally Posted by khanak View Post

6. Indians wont appreciate the extra cost being paid for features factory installed on cars.

We often feel that we can get something better for our car for a lot less money if bought on our own. A lot of us dont like integrated stereos and prefer to install a stereo from an accessory shop. The same goes for seat covers, alloys wheels, spoilers etc.
I can vouch for this one. Many people that I came across cannot digest the fact that i bought a hatchback for 8 lac rupees (The i20 Diesel Asta). I tell everyone its because of the great set of features and I always consider it as money well spent. But still, the mindset of some people does not change.
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Old 24th November 2012, 16:56   #12
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A buyer in the developed world pays lesser to own the car and lesser on fuel (USA prices). We pay more for electricity too.we pay a lot of tax on our incomes too. People have started spending more for features as the durability of modern cars is more and it is a long term investment /fewer car purchases.

We need to save money for everything! House, kids education, dowry, illness, bribes.

Whereas all the above are taken care of as social security measures in developed countries.

If I need to pay 5 lakhs over 10 years for adequate health cover for my family, I have to buy a segment lower or save money on features on a car purchase.after housing that would be a bigger fixed expense every 5 years!

Manufacturers start pushing higher features /products in developing countries as the per capital GDP tips over a certain point....so with options available intelligent buyers are buying fully loaded hatches instead of an entry level sedan.
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