The country's largest passenger car maker Maruti Suzuki has said that a few days after it started sales after the easing of the lockdown, it is seeing more enquiries for hatchbacks than for sedans or SUVs. The company expects greater offtake by first time buyers seeking functionality than by existing car owners wanting to upgrade, during these difficult times.
While the company used to report bookings of around 4,000-5,000 cars every day prior to the imposition of the lockdown on March 24, following the partial lifting of restrictions, it has received some 6,000 bookings within a week.
The company says that is a positive trend as the number of bookings it gets every day is on the rise. This is in line with its expectations on the revival of consumer confidence. Maruti is going all out to ensure safety at its showrooms, said Shashank Srivastava, Executive Director – Marketing & Sales, Maruti Suzuki India.
The firm opened 1,150 showrooms by middle of this week the and has delivered a little under 3,000 vehicles.
"Going by the trend of enquiries and the bookings, hatches seem to have increased in percentage. Almost 65 per cent of the enquiries are for hatches. The figure was about 55 per cent last year. I am not saying it is a trend--it is very early to say that. But this is the most definitive thing I can say at the moment," Srivastava said.
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While it is too early to make any forecasts at this point in time, three or four trends are expected going forward, These have also been backed by consumer research. One is that people in such situations usually gravitate around the more established and better-known brands, because they become less experimentative when the consumer sentiment is slightly adverse.
Secondly, since car buying is a discretionary purchase, it requires positive sentiment. Sentiments today aren't so positive and the buying for functionality will increase, which means people who have really need a car will probably come out to buy, rather than looking for status or upgrades. Normally the percentage of first-time buyers in this functionality group will be higher than those in the upper segment.
Thirdly, there will be an increase in sales of smaller cars. The fact that people prefer private transport to public transport owing to the pandemic is evident in many surveys, Srivastava said.
The fourth factor that is pushing demand towards the lower segment, is financing. Since the financial position might be tighter for many buyers, they may buy a slightly lower priced car than what they were planning otherwise, which is called transfer demand. This is expected to give a bigger push to the sale of smaller cars than the more expensive ones.
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"These are logical trends backed by consumer interactions. But actually what will happen is to be seen since it has been a very short time since the reopening of the market. The average price at showroom in the Indian market is about Rs 7.7 lakh, it has been going up for the last seven to eight years. For Maruti Suzuki the average would be around Rs 5.5-5.6 lakh or so," he said. He said that it is too early to predict any change in consumer behaviour or profile as of now.
Another trend that has emerged is the increased emphasis on digitalisation. Maruti has earlier identified that there are around 28 touch points between a customer thinks of buying a car to taking the delivery and of this, around 7-21 were already become digital for the company even before the Covid-19.
The online enquiries and bookings seems to have increased post relaxation of lockdown. Most OEMs are trying to digitise the financing part of the sales process. But actual test drive has to be done, though there are some virtual test drive. So the companies are trying to transform the other points are also into digital and Maruti Suzuki is also trying to digitalise these points which are not currently not digitalised, he added.