Due to post-purchase concerns such as battery life, distance traveled, maintenance cost, acceleration, and top speed only 7 percent of Indian vehicle owners are “very likely” to purchase an electric vehicle in the future. Interestingly, Indian vehicle owners are also willing to pay a premium over the base price for an electric vehicle; among all alternate fuel vehicles, the premium for an EV is fairly low.
Currently, nearly all Indian vehicle owners use conventional fuels (petrol or diesel). However, with increased environmental awareness a considerable preference for the use alternative / non-conventional fuels is likely. This is quite significant, given that only 1 percent vehicle owners currently use alternative / non-conventional fuels. However, apprehension related to insufficient fuel stations, battery charging time, etc. persists among Indian vehicle owners who would consider switching to alternative / non-conventional fuels.
Among the alternate Powertrain technologies available, Indian vehicle owners are more aware of LPG, CNG, and to some extent, electric and bio-fuels. The awareness for LPG and CNG is high since commercial vehicles run on either LPG or CNG in most Indian metros. Awareness about alternative technologies varies according to the vehicle segment the owner belongs to. Increasing preference for alternative fuel is seen due to perceived cost savings of around 30 percent as compared to conventional fuels.
The study also revealed that the market for manual transmission vehicles may shift in the future towards automatic transmission vehicles. Specifically, 37 percent of Indian vehicle owners state intentions towards automatic transmission for their next vehicle with higher proportion of males preferring automatic transmission over females. The study captures willingness to pay extra for automatic transmission.
The study captures the Future Purchase Behavior of customers. It analyzes three major factors influencing any vehicle purchase decision and is based on the factor analysis. Amongst these, fuel economy is the most influential factor for engine selection among the majority of Indian vehicle owners. The study also addresses the trends in downsizing of engines based on consumer preferences.
Vehicle financing has become a very lucrative business, as the majority of Indian vehicle owners finance at least some portion of their vehicles. It is expected that roughly 8 out of 10 Indian vehicle owners will purchase a new vehicle within the next 5 years. More specifically, C segment vehicle owners are more likely to purchase a new vehicle within the next 3 years compared to other vehicle owners. Thus, the vehicle financing market in India is likely to run more in tandem with the automotive manufacturing market than in the past.
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