Deloitte Analysis Reveals Indian Consumers' Rising Preference for Hybrid Electric Vehicles The survey also emphasises the importance of responsible battery management, with customers anticipating proactive measures from vehicle dealers, EV battery manufacturers and battery recycling companies.
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According to Deloitte's most recent Global Automotive Consumer Study (GACS) for 2024 in the Indian automotive industry development, nearly 50 percent of Indian consumers intend to move away from internal combustion engine (ICE) technology to hybrid electric vehicles (HEVs) as their preferred engine in their next vehicle. This change, which is primarily the result of lower fuel costs and environmental concerns, is significant for the Indian auto industry.
Affordability has turned up as a crucial element affecting buying decisions, with 80% of buyers aiming to select a vehicle in the INR 5–25 lakh price range. The preference percentages for ICE and EV engines under INR 10–25 lakh are 59 percent and 58 percent, respectively. Furthermore, 23 percent and 22 percent of consumers preferred ICE and EV automobiles, respectively, in the price range of INR 10 lakh and lower.
Approximately 68% of respondents mentioned their awareness of the environment, while 63% voiced their worries on the decreased cost of fuel. The infrastructure for charging also plays a crucial role, with 66% of drivers planning to charge their vehicles at home and 22% at public charging stations. Fast charging is essential, and the majority of customers prefer straightforward credit/debit card payments.
The study also emphasises the need for responsible battery management, as consumers expect dedicated battery recycling companies, EV battery manufacturers, and vehicle dealers to take the lead in collecting, storing, and recycling EV batteries. According to the survey, most consumers preference hybrid technology when buying a new vehicle, despite ongoing issues with infrastructure availability, battery safety, and charging times.
Rajeev Singh, Partner and Consumer Industry Leader, Deloitte Asia Pacific, stated, "Booming economy and the changing consumer preferences indicate the learning effect of 'New' cars over 'Used' and the willingness to invest more in connected cars. This offers original equipment manufacturers (OEMs) a prime opportunity for enhanced customer retention services. Transparency is the key-consumers are ready to pay more if OEMs guide them transparently.
"Despite a positive trend in EV adoption, infrastructure remains crucial for sustainability. Consumers are eco-conscious and look to OEMs committed to sustainability. The stage is set for OEMs to lead with transparency, innovation, and a green commitment, shaping a future aligned with consumer values," he added.
Apart from the increase in demand for hybrid vehicles, the Deloitte analysis also identifies a number of new trends:
1. In-House Insurance Offerings- By providing In-House Insurance Offerings, OEMs are pursuing new opportunities and indicating a major upheaval in the conventional value chain. About 83 percent of consumers expressed interest in purchasing insurance directly from manufacturers, citing convenience and cost-saving benefits.
2. Connected vehicles- When it comes to connected vehicles, safety is the top priority for Indian consumers. About 71 percent respondents were willing to pay extra for connectivity features, with 88 percent desiring updates for road safety and collision prevention, and another 88 percent seeking maintenance updates and vehicle health reporting/alerts.
3. Preference for New Vehicles- Despite interest in new and used cars, most respondents prefer buying a new car for their next purchase. About 77 percent consumers are willing to switch brands, citing technology features (64 percent) and a desire for something new (50 percent) as primary reasons.
4. OEM commitment to sustainability- The majority of consumers (98%) think vehicle brands should make a commitment to sustainable practices, like employing eco-friendly materials and having a low carbon manufacturing footprint.
5. Rise of Vehicle Subscriptions- Younger consumers are becoming more and more receptive to vehicle subscription services, with nearly 6 out of 10 younger consumers expressing a willingness to give up vehicle ownership for a subscription model. Cost control, convenience, availability of vehicles, and increased flexibility are the main drivers of this trend, especially for consumers between the ages of 18 and 34.
Conducted from October 5th to 12th, 2023, the Deloitte study surveyed 1,000 Indian consumers, providing insightful information about the evolving automotive preferences and behaviours of Indian consumers.
