Safety, emission norms on top of mind of car buyers, says KPMG report

With rising consumer awareness and regulatory norms likely to get tougher on safety, emission, fuel efficiency, manufacturing defects and product recall for vehicles in India, product lifecycles are getting shortened.

Indian consumers are increasingly giving high consideration to fuel-efficiency and safety innovations while purchasing a car, says the latest global survey by KPMG, adding that quality service experience during purchase is extremely important for Indian consumers.

To match up to consumer needs, Indian auto companies will be investing in two powertrain technologies over the next five years — 33 per cent in downsizing and optimisation of internal combustion engines, and 27 per cent in fuel cell electrical vehicles, says the survey.

In the next three to five years, Brazil, Russia and India are expected to export more than one million vehicles each to other markets.

“There is also going to be a phenomenal growth in the second-hand car market in the country (India) and it will be one of the key success factors for players who enable easy exchange to increase their market share,” said Rajeev Singh, Head of Automotive sector, KPMG India The industry is also likely to see big investments in the next couple of years.

It is one of those distinctive markets where there is a big potential at both ends of the pyramid — small cars and high-end luxury cars.

There is also likelihood of a rise in women customers, he said.

The survey was conducted among 200 senior executives from the world’s leading automotive companies, including automakers, suppliers, dealers, financial services providers, rental companies and mobility solution providers, it said.

It said 34 per cent of the total survey respondents felt the established premium market original equipment manufacturers (OEMs) may continue to dominate the landscape over the next decade.

“OEMs are likely to dominate up to 2025, with a further 48 per cent believing this scenario is somewhat likely.

“Only fewer than 32 per cent report that mass market OEMs are likely to prevail, with 52 per cent confident that this group is somewhat likely to remain on top.

“However, coming in third place are the pure e-car brands/sub brands with 13 per cent saying extremely likely and 54 per cent saying somewhat likely to be a part of the new automotive ecosystem,” the report added.