'Word of mouth' key influencer in new car purchase - IAB Report

26/12/2014 - 16:31 Maruti Swift, Industry News Anjan Ravi

50% of buyers spent more than 10 hours researching online.

Deloitte India conducted a survey on potential new car buyers and released a report on the topic “Driving Through the Consumer's Mind: Steps in the buying process”. This report looks into details of purchase behavior of Indian car buyers. It also elaborates on various stages which a consumer goes through in the process, from information search and interaction at dealerships to endorsing and recommending products to others.

Sundaram Motors Madurai Mercedes-Benz dealership — 70% of buyers visiting a dealership take a test drive.

The findings of this report are based on a survey conducted by Deloitte out of 1,813 respondents in India, 59% of the survey population belong to Gen Y (19-36 years), 22% belong to Gen X (37-48 years) and 16% belong to the Baby Boomers (49-67 years) segment. The car owners also show a similar age profile.

The report reveals that word-of-mouth and car reviews are big influencers in the purchase process whereas dealerships and social media are the least important information sources. While test drives remain a highly important aspect of the customers’ research, a majority of them do not prefer spending more than 45 minutes at the dealership, including the time on test drives.

Honda City front at the 2014 Nepal Auto Show — Price and value are key parameters for Indians.

Price/value and features of a vehicle are key research parameters especially for the Indian car buyer and people recommend cars to potential customers regardless of whether they own it themselves or not. Which means that manufacturers need to continuously engage with customers beyond sale of vehicles to create a positive buyer-seller relationship.

Several factors trigger people to decide and purchase a particular car. For first time car buyers, family needs is 8 times more important than better brand image. However, in case of repeat buyers, technology and need for more comfort are 3 times more important than better brand image.

50% of car buyers, spend more than 10 hours researching online from reviews and comparisons about possible vehicles they can buy and male buyers tend to spend more time compared to female buyers.

70% of buyers visiting dealerships take a test drive, indicating that test drive is a key activity to help making the decision whereas 50% customers spend less than 45 minutes for dealership visit and test drive. It indicates that bulk of the information gathering is done outside the dealerships.

Maruti Ciaz tail lamp — At least four brands are considered by 50 percent of the respondents.

50% of respondents considering 4 or more brands recommend at least 1 brand and 40% of respondents considering 3 brands recommend at least 1 brand to others which is different from the brand that they own. This highlights the importance of lost customers and their enthusiasm to endorse products and the importance of word-of-mouth in the buying process.

Further details can be found in the press release below.