Oh, how things change so quickly. Only a couple of months ago, I was sitting down trying to convince myself why I need yet another motorcycle. This was when COVID reports were very few and the world around us normal with a hint of caution. It clearly wasn’t the best time to spend on a new motorcycle with a crisis on the horizon, but then I am not the most rational person.
As part of that caution, I was trying to avoid multiple visits to the dealership. Since it wasn’t exactly a costly machine, the discount unmatched and warranty plenty, I wasn’t too worried about nitpicking everything before proceeding with the purchase. So, I rang up the dealership and asked them for their account details so that everything can be handled beforehand, and my only visit would be to pick it up and ride off.
“Sir, it doesn’t work like this.”
“Sir, you need to visit to book, and then, you can make payment and come tomorrow for paperwork.”
Of course, I followed (because I had successfully convinced myself) and it took a total of three visits to deal with what I wanted to deal with in one.
Fast forward four months and things seem to have changed. Many of you may be aware that giving auto companies your money isn’t enough and you have to part with your personal information as well. And that means I keep getting promotional mailers after making a purchase from the said brand, telling me how I can make a booking and settle the payments, all while sitting in front of a laptop and just have to visit to pick up the vehicle. Sigh.
I wrote all that above to make a simple point, “things will change”. A lot has already been said and written about “How COVID will change car, motorcycle buying behaviour”. Most of them have covered well the changes particular industries will see in terms of numbers, or what thoughts and external factors would drive those changes. However, the nuances, eccentricities, and developments that accompany a major shift like this, particularly in a country like ours, need to be put at front.
Something as seemingly insignificant as online purchase of vehicle actually is a massive transition in a market like India. And as much as we love to talk about car sales, the country moves on two wheels and the footboards of local trains.
Nevertheless, a pandemic like COVID-19 isn’t just a pebble in a pond. It will have ripples that will do a lot more than just get dealerships to not expect a visit for everything. And even though auto companies are, and will continue to, make the process of booking and buying without visiting as seamless and rich as possible, the process of buying may get extended for many.
Brands that wouldn’t update their models to add Bluetooth are suddenly letting shoppers check out the car with augmented reality, but still, reality will hit and budgets will be clipped.
Not everyone has the luxury of buying a new vehicle, and everyone is just seeking an option that reduces the gamble they make on a daily basis with their life without trading away with too much money.
As per a survey by automobile portal CarWale, just over half the respondents indicated a change in their plan to buy a car, and bit over a quarter said that they are reconsidering the budget. The car costs have gone up recently with new emission regulations coming in play, and coupled with the factors created by the current scenario, you can expect a lot of the purchases for existing buyers to be in the same segment, and not the next one as is typically observed with most repeat buyers.
While this would affect the auto industry in general, it would hit the smaller players (in India) more than the top two-three. Automakers like Maruti Suzuki and Hyundai have cultivated a reputation of being reliable options and/or safe bets over the years, and these factors would take a higher priority for buyers in these times.
This means the car companies that survive with market shares in lower single digits might face even more heat and some might even struggle to keep the wheel turning here. Though brands that have products at the low end of the price band might not fare as badly as the ones with handful of products priced above the market average. The same reason might drive volumes in the used car market too.
Historically, financially tough times like these have given birth to budget-friendly cars, but since we have already built, and failed at making any good on it, world’s cheapest car, the chances of happening that again are very rare.
Two-wheeler companies too predict bad times ahead of them. The larger manufacturers expect a hit of almost third of their sales, and as is expected from the four wheelers, the two-wheeler market would also tilt in the direction of budget options from the four largest manufacturers.
But maybe just talking about car and two-wheeler buying behaviour takes the focus away from every other way mobility would change. The current crisis won’t just bring about a change in how people buy cars, motorcycles, or scooters, but rather would trigger a series of mobility upgrades for a lot of us. Everyone would look at the next best option they can afford.
Someone who used to line up in the metro station queue every morning sees a motorcycle taxi as a safer option because it puts one at lesser risk of COVID-19 than their usual option. Not everyone has the luxury of buying a new vehicle, and everyone is just seeking an option that reduces the gamble they make on a daily basis with their life without trading away with too much money.
Shared mobility has had a sudden crash in the current times, and it is likely that the same might continue for a while. Of course, as you would expect, many companies operating in this space quickly started exploring other options to adapt with the changed behaviour of the masses. Won’t take a cab? Let us run your errands for you. There are rumours of the motorcycle taxis expanding to Tier-2 cities, probably as an alternative to overloaded diesel autos and the contraptions called e-rickshaws.
For some of these companies, the changes are even further from their existing models. Since customers are averse of using the same vehicles that others are using, brands are looking at long term rentals or leasing models. Take the scooter for six months and wait for the crisis to blow over, maybe? Of course, many such models existed already but they might find takers now more than ever. How effective the rental plans are for buyers and the brands is a topic for another story.
Between all this, however, I am afraid the long term goals will take a hit. While the market was preparing to welcome electric mobility before this, the buyers’ appetite for experimenting might go away and purchase decisions will be made based on what ticks the most boxes. And since electric cars are costlier than their conventional counterparts, they might see less love for a while.
Apart from that, the investments in the transportation space might also take a hit. The global auto industry wasn’t exactly in a rosy spot for a while before the pandemic hit but at least there was hope on the horizon.
They were spending on mobility solutions for tomorrow, and with bets placed there, were hoping to cash big tomorrow. Now, however, squeezed for money due to drop in sales, the focus for many may shift towards selling as many of existing models and their derivatives as possible to sail through this.
But what do we know really? We are just speculating from behind a keyboard. Regardless of how hard we try, at best we are able to observe and account for a fraction of what is a complicated web of movement. Perhaps, there are better answers to be found just by observing your neighbourhood bus stop.
Cover Image from iStock by Getty Images.
Crafted with brevity for select stories to make certain you see what others don't; sent every Friday
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