Since June 2019, the Automobile Industry in India is in the eyeball of everyone including Government, Economists, stakeholders and media. After Loksabha election Government and citizens – the two extreme ends are in worry regarding the country’s economic slowdown and this has been further escalated by the slowdown in various sectors particularly the Automobile industry.
The auto sector is facing the worst crisis. Almost 3.5 lakhs employees are laid off. Nearly half a million passenger vehicles and 3 million units of two-wheelers are lying unsold. Even the festive season could not pick up much and eventually manufactures decided to postpone the production of vehicles.
The major reasons cited by most of the industrialists are liquidity crunch, slow job growth and weak buyer sentiment. Some also stated the reasons like Government Policies on Insurance and safety, effects of demonetization, aftereffects of GST are responsible for the slowdown in auto sales. Natural calamities like 2019 floods in Kerala, Gujarat, and other states are some of the unavoidable factors that we have to compromise with.
The present scenario is showing an acute crisis of consumer’s sentiment. The consumer confidence is at the lowest not only in Auto but even in other sectors. The answer is very simple – “consumer is not spending” but why he/ she is not spending? There are two broad categories – one segment comprises of those who have fund issues (not enough amount of disposable income) and there are others who have funds but still they are escaping from purchase. Owing to such a situation, the role of Market Research and Data Collection agencies have grown. On behalf of designers, developers, manufacturers, marketers and sellers comprising the entire Automobile industry; Market Research and analytics organisations have a bigger responsibility than ever before to not only provide them with data and insights but also suggest best solutions.
Indian Automobile Industry is Fourth largest in the world and experts believe that the sector is changing inside and out. We are optimistic about the situation that it will be just short-lived and will be considered as a revival period of Auto Industry owing to consumers and their changing behaviour. Thus, we as Market Research agency have some immediate functions which are as follows:
The first step will be to Identify the Right Audience. The market mix in the auto industry is undergoing a major change. Recently the automotive market has witnessed the upsurge of second-hand cars too. We need to identify the relevant stakeholders including Consumers, Manufacturers, Dealers, first and second-tier suppliers, and logistics firms whose opinions, feedback and hidden wants and desired can be tapped.
India is watching a sudden change in consumer behaviour since few years. So is it the pricing or the communication or the advent of Electrical Vehicles or implementation of BS VI norms or there are more hidden reasons? To answer such questions on why the consumers are either cancelling or postponing their Car purchases, we have to dig deep into consumer’s psyche. Thus, the next step should be continuous monitoring on overall purchase habits and conducting in-depth qualitative studies of vehicle owners.
Finally, there are lots of communication and news on economic slowdown creating fear among buyers. Thus, presenting the right insights backed with data discovering the strength opportunities of the present situation is also pivotal for research agencies so that Auto marketers can develop result-oriented and impactful communication strategies backed with data to gain consumer trust and confidence of Indian consumers
In a nutshell, the MR industry has a major role in filtering out the strength and opportunities of the present situation along with threats and weaknesses of Auto slowdown in India.