‘Fuel economy, the top draw for buying cars’

However, small car buyers are increasingly regarding the audio, entertainment, navigation category as key determinants of vehicle appeal, JD Power, the US-based global marketing information services firm, said in its 2017 India Automotive Performance, Execution and Layout (APEAL) study. 

This is also the case for the utility vehicle segment, where these features are gaining relevance over the past five years and is among the top five weighted APEAL categories, the survey revealed. “Although fuel economy continues to be a key driver of overall appeal in India, new-vehicle buyers are increasingly opting for added features that enhance convenience and safety,” Shantanu Nandi Majumdar, Director, JD Power said. The study is based on responses from 8,571 new-vehicle owners who bought their vehicle from November 2016 -July 2017 and includes 83 models from 17 makes. It was carried out from May-Sept 2017 in 40 cities nationally.

With increasing disposable income, some consumers may be willing to trade-off fuel economy for added performance, convenience and safety features, Majumdar said. “Manufacturers that are able to differentiate their products on these key attributes are likely to have a stronger brand connection with consumers in this market,” he added. Vehicles bought as an upgrade to a prior-owned vehicle have an average APEAL score of 880 points (on a 1,000-point scale), which is 14 points higher than the overall industry average. 

Reasons for purchasing such a vehicle include exterior design (57 pc), interior style and comfort (59 pc) and quality of workmanship (36 pc), compared with non-upgraders. It also revealed that airbag and anti-lock braking system (ABS) fitment rates have increased by 12 percentage points and seven percentage points, respectively, from 2016, while attributing the growth to consumer demand. 

In 2017, 63 pc of all new vehicles sold have driver and front passenger airbags, while 57 pc have ABS, it said adding with airbags and ABS fitted into one of every two small cars sold. 

More Indians are now borrowing to purchase cars and the loan ticket sizes are also steadily going up, a report said. The outstanding loan portfolio for passenger cars grew 30 pc over the year to Rs 3.59 lakh cr as of Sept 2017, domestic rating agency Crif Highmark said, even as concerns continue to be voiced over the quality of urban infra and its ability to support vehicles. The average loan size has grown by over 20 pc in the last three years to Rs 5.5 lakh, up from Rs 4.5 lakh three years ago, it said. In 2016-17, 31 lakh cars got financed and 17 lakh cars would be financed in the six months to Sept 2017 alone, it said.