A study by consumer research agency J D Power has shown that one amongst three car buyers in the market rejected a vehicle of primary choice only because they found a better alternative delivering higher mileage.
Stellar rise in the cost of petrol over the last several months following the government's move to deregulate the fuel coupled with the recent hike in cost of diesel has forced consumers to go for car models with superior fuel economy.
“Repeat (car) buyers tend to shop more than first-time buyers, but this has further increased in 2012 with the launch of several new models in the country,” said Mohit Arora, executive director at J D Power Asia Pacific, Singapore.
In terms of consideration, car market leader Maruti Suzuki continues to be the most considered nameplate among vehicle buyers, despite a decline in consideration rate year over year. Conversely, the consideration rates of such makes as Toyota and Mahindra sharply increased from 2011.
The '2012 India Escaped Shopper Study' of J D Power is based on responses of 7,382 buyers and 2,721 rejecters of new cars and new utility vehicles, who purchased their vehicle between September 2011 and April 2012. The study was fielded from March to July 2012.
Little surprise then that every car maker today is flashing mileage figures of its range of products at almost every promotional campaign, claiming to be amongst the most fuel efficient vehicle making companies in India.
One-third of customers rejected the vehicle they initially considered purchasing because they wanted a vehicle with better fuel economy.
Price continues to be among the major reasons for rejecting a vehicle. However, shoppers cite price less often in 2012 compared with 2011 as buyers increasingly prefer vehicles that provide a cost-of-operation advantage, noted the study.
Though diesel-driven models are more fuel efficient than their petrol counterparts they also usually carry a price premium of more than Rs 1.2 lakh over the petrol-powered variants of the same model.
Mileage figures displayed by car makers today is not enforced by the government but is duly certified in many cases by the vehicle research agency Automotive Research Association of India (ARAI).
Some car makers also use mileage data supplied by automotive magazines.
“Repeat buyers typically have a greater willingness to experiment with new models that are launched in the market. The increase in fuel prices during the past year appear to have a significant impact on vehicle shopping preferences and vehicle-buying decisions,” said Arora.
The study also noted that repeat vehicle buyers show greater involvement in the shopping process and are more likely to visit dealerships and test drive new models before making their final purchase decision.
“Vehicle operating costs are therefore superseding initial acquisition costs in the buying decision process, as shoppers increasingly choose between similar priced vehicles”, added Arora.
The study, which examines the reasons why new-vehicle shoppers consider but ultimately reject certain models in favor of another, finds that 28% of new-vehicle buyers considered one or more vehicles before selecting the vehicle they ultimately purchased, up from 23% in 2011.
The increase in cross-shopping rates is primarily driven by repeat new-vehicle buyers—shoppers, who are either purchasing an additional vehicle or replacing their household vehicle, as more than one-third of repeat buyers considered one or more models during their shopping activity, an increase of nearly 9% from 2011.
The cross-shopping rate among first-time vehicle buyers remains largely unchanged from 2011 at 20%.
