Greater Noida: With buyers in India becoming more rational while buying cars, manufacturers can no longer take brand loyalty for granted and they need to ensure quality of service, product reliability and re-sale value, according to a report by Deloitte.
Factors such as fuel economy is no longer a main criteria that influences buying decision, the report said.
"The reasons for customers to buy a car have changed from the past when it was more connected with status symbol, brand association or emotional connect. Today, they are buying for more practical reasons," Deloitte Touche Tohmatsu India Senior Director Kumar Kandaswami said.
There are very practical reasons to buy a car -? space, need of the family or to upgrade to a higher quality of vehicle, the report said.
Unlike developed markets where a car is bought to cater to an individual's requirement, the first-time car buyer in India looks to purchase a car for the family purpose, it said.
Given that the first-time buyer has really no comparable reference, it is natural that this buying decision is not influenced by the 'improvement of fuel efficiency' factor, the report added.
"Once the decision to buy is made, the study reveals that the first-time buyers use reliability, the dealer services and resale value as filters while making brand choices," it said.
As is the case of first-time buyers, the repeat buyers also go for reliability, dealer services and resale value as filters to making brand choices, the report said.
However, unlike the first time buyer, the primary focus of a repeat buyer remains on upgrading to a more sophisticated product.
Worryingly for manufacturers, customers are not necessarily driven by brands, according to the report.
"Most of the car buyers ? both first time and repeat ? consider 3?5 brands from which they make their final selection ... As the buyers go through the repeat purchase, they don?t necessarily behave any different from the first time buyer in shopping around. It does not seem to be a case where they identify themselves with a brand in terms of personality or performance," it said.
Kandaswami said this is a trend observed not only in mass market customers but also even in the luxury segment.
"Brand loyalty cannot be taken for granted," he said adding companies would need to manage expectations of the customers appropriately through the life cycle of the product to be in a position to be considered favourably for the next purchase.
Only a small portion of consumers are loyal to a brand and not complaining should not be misunderstood as satisfaction and brand loyalty, he added.
The Deloitte report is based on response from 1,800 people in India in 2013 as a part of its global initiative where the survey covered over 23,000 people in 19 countries.
First Published: Friday, February 7, 2014, 17:47