Deloitte Study Unveils Surging Demand for Hybrid Vehicles Among Indian Consumers

Deloitte's latest Global Automotive Consumer Study (GACS) for 2024 has unveiled a significant trend in the Indian automotive sector: nearly half of Indian consumers are making a decisive shift towards Hybrid Electric Vehicles (HEVs) while moving away from traditional Internal Combustion Engine (ICE) technology. This shift, driven primarily by environmental concerns and reduced fuel expenses, marks a pivotal moment in India's automotive landscape.

Affordability has emerged as a crucial factor influencing purchasing decisions, with a staggering 80 percent of consumers aiming to purchase vehicles priced within the INR 5–25 lakh range. Notably, preferences for both ICE and Electric Vehicle (EV) engines remain strong across various price brackets, with 59–58 percent favoring ICE engines and 58–57 percent showing interest in EVs.

Environmental consciousness plays a significant role, with 68 percent of respondents citing it as a primary consideration. The importance of charging infrastructure cannot be understated, with 66 percent of consumers planning to charge their vehicles at home and 22 percent preferring public charging stations. Moreover, fast charging capabilities and straightforward payment methods, such as credit/debit card transactions, are favored by most consumers.

The study also underscores the need for responsible battery management, with consumers expecting proactive efforts from battery recycling companies, EV battery manufacturers, and vehicle dealers. While challenges such as charging time, infrastructure availability, and battery safety persist, the study indicates a clear preference for hybrid technology in future vehicle purchases.

Rajeev Singh, Partner and Consumer Industry Leader at Deloitte Asia Pacific, emphasized the shifting consumer landscape, stating, "The evolving consumer preferences highlight a growing affinity towards new, connected, and environmentally sustainable vehicles. This presents an opportunity for OEMs to enhance customer retention services through transparent engagement."

In addition to the surge in hybrid vehicle demand, the Deloitte study also highlights several emerging trends:

In-House Insurance Offerings: OEMs are exploring new avenues by offering in-house insurance products, signaling a significant disruption in the traditional value chain. About 83 percent of consumers expressed interest in purchasing insurance directly from manufacturers, citing convenience and cost-saving benefits.

Connected Vehicles Prioritize Safety: Safety remains a top priority for Indian consumers when it comes to connected vehicles. Approximately 71 percent of respondents were willing to pay extra for connectivity features, with a strong desire for updates related to road safety, collision prevention, maintenance, and vehicle health reporting/alerts.

Preference for New Vehicles: Despite interest in both new and used cars, the majority of consumers (77 percent) prefer purchasing new vehicles for their next purchase. This preference is driven by factors such as access to new technology/features and a desire for something new.

OEM Commitment to Sustainability: A staggering 98 percent of consumers believe that vehicle brands must commit to sustainable practices, including the use of environmentally friendly materials and low carbon manufacturing processes.

Rise of Vehicle Subscriptions: Younger consumers are increasingly inclined towards vehicle subscription services, with nearly 6 in 10 expressing a willingness to give up vehicle ownership for a subscription model. Factors such as cost control, convenience, availability of vehicles, and increased flexibility are driving this trend, particularly among consumers aged 18–34.

Conducted from October 5th to 12th, 2023, the Deloitte study surveyed 1,000 Indian consumers, offering valuable insights into the evolving automotive preferences and behaviors of Indian consumers.

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